Senate Democrats Question Removal of Bank Examiners

Senate Democrats accused Federal Reserve Vice Chair for Supervision Michelle Bowman of weakening bank oversight by removing examiners from their positions following industry complaints.

In the letter, the Senators expressed concern that examiners are being "sidelined or taken off the job" based on industry pressure. They highlighted a pattern, pointing to Ms. Bowman's October announcement of a 30 percent reduction in the Division of Supervision and Regulation staff and new limitations on examiners’ oversight tools. The lawmakers asserted that removing personnel at the request of banks would create a "chilling effect" across the workforce, preventing them from evaluating safety and soundness "without fear or favor." They warned that prioritizing bank appeasement over vigorous enforcement leaves the system vulnerable to crashes and future bailouts that would harm American families.

The Senators also criticized what they termed a "toxic mix of actions" intended to relax oversight, citing reports of a "combative relationship" between Ms. Bowman and Fed staff. They noted that some examiners now interpret Ms. Bowman’s policies as a signal to "refrain from being tough" on the institutions they oversee. The Senators requested that Ms. Bowman provide specific answers regarding (i) whether she has ever removed an examiner based on a bank's complaint; (ii) the names and titles of any bank employees who levied such complaints; and (iii) whether she has engaged in conduct contributing to a hostile work environment, such as berating staff.

The Senators asked Ms. Bowman to provide responses to these inquiries by February 25, 2026.