US Fed plans to raise bank oversight thresholds, sources say
KRE•The Federal Reserve is expected to propose reindexing bank oversight thresholds, potentially later this year. The changes could raise the $700 billion threshold to around $960 billion and the threshold for some additional requirements to roughly $150 billion.
1. Threshold changes under review
The Fed is working on a plan to raise asset thresholds that trigger stricter oversight, four people familiar with the matter said. Current thresholds are $100 billion, $250 billion and $700 billion; the Fed is considering moving the highest closer to $1 trillion and the lower threshold for some requirements closer to $150 billion.
2. Potential effects on banks
U.S. Bancorp, Capital One, PNC Financial and Truist are among the lenders closest to the $700 billion threshold. Western Alliance, Zions and other banks could grow beyond $100 billion without facing all current requirements, while Pinnacle Financial Partners and some other lenders between $100 billion and $150 billion could shed some requirements.
3. Possible deal activity
The people said the changes could encourage consolidation among mid-size lenders that have held off on deals for fear of crossing thresholds. Banks with $50 billion to $700 billion in assets announced 33 bank and thrift acquisitions over the past decade, including seven last year.
