Bowman, Opening Remarks

Opening remarks by Vice Chair for Supervision Bowman at the Federal Reserve Bank of Kansas City’s 2026 Future of Banking Conference - Federal Reserve Board Skip to main content An official website of the United States Government Here's how you know Official websites use .gov A .gov website belongs to an official government organization in the United States. Secure .gov websites use HTTPS A lock ( Lock Locked padlock icon ) or https:// means you've safely connected to the .gov website. Share sensitive information only on official, secure websites. Back to Home Board of Governors of the Federal Reserve System Stay Connected Federal Reserve Facebook Page Federal Reserve Instagram Page Federal Reserve YouTube Page Federal Reserve Flickr Page Federal Reserve LinkedIn Page Federal Reserve Threads Page Federal Reserve X Page Federal Reserve Bluesky Page Subscribe to RSS Subscribe to Email Recent Postings Calendar Publications Site Map A-Z index Careers FAQs Videos Contact Search Submit Search Button Advanced Toggle Dropdown Menu Board of Governors of the Federal Reserve System The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. Main Menu Toggle Button Sections Search Toggle Button Search Search Submit Button Submit About the Fed Structure of the Federal Reserve System The Fed Explained Board Members Advisory Councils Federal Reserve Banks Federal Reserve Bank and Branch Directors Federal Reserve Act Currency Board Meetings Board Votes Careers Do Business with the Board Holidays Observed - K.8 Ethics & Values Contact Requesting Information (FOIA) FAQs Economic Education Fed Financial Statements Financial Innovation News & Events Press Releases Speeches & Testimony Calendar Videos Photo Gallery Conferences Monetary Policy Federal Open Market Committee About the FOMC Meeting calendars and information Transcripts and other historical materials FAQs Monetary Policy Principles and Practice Notes Policy Implementation Policy Normalization Policy Tools Reports Monetary Policy Report Beige Book Federal Reserve Balance Sheet Developments Review of Monetary Policy Strategy, Tools, and Communications Overview Supervision & Regulation Supervision Community Banks Regional Banks and Foreign Banks with U.S. Assets Large Banks and Large Foreign Banks Global Systemically Important Banks Financial Market Utilities Consumer Compliance Resources for Supervised Institutions Reports Federal Reserve Supervision and Regulation Report Reporting Forms Recent Reporting Form Updates Information Collections Under Review Financial Statements Securities Exchange Act of 1934 Applications/Structure Change FFIEC Municipal and Government Securities Activities Monitoring Micro Data Reference Manual Legal Developments Enforcement Actions and Legal Developments Mergers, Acquisitions, and Other Applications Process Filing Information Board and Reserve Bank Actions Supervision and Regulation Letters By Year By Topic Regulatory and Policy Resources Federal Reserve Act Bank Holding Company Act Regulations Supervision Manuals Federal Reserve Regulatory Service Disaster Preparedness and Recovery Resources Banking and Data Structure Beneficial Ownership Reports U.S. Domestically Chartered Commercial Banks Minority Depository Institutions U.S. Offices of Foreign Entities Financial Holding Companies Interstate Branching Securities Underwriting and Dealing Subsidiaries State Member Banks Supervised by the Federal Reserve Financial Stability Financial Stability Assessments About Financial Stability Types of Financial System Vulnerabilities & Risks Monitoring Risk Across the Financial System Proactive Monitoring of Markets & Institutions Financial Stability & Stress Testing Financial Stability Coordination & Actions Responding to Financial System Emergencies Cooperation on Financial Stability Reports Financial Stability Report Payment Systems Regulations & Statutes Regulation CC (Availability of Funds and Collection of Checks) Regulation II (Debit Card Interchange Fees and Routing) Regulation HH (Financial Market Utilities) Other Regulations and Statutes Payment Policies Federal Reserve's Key Policies for the Provision of Financial Services Guidelines for Evaluating Joint Account Requests Overnight Overdrafts Payment System Risk Sponsorship for Priority Telecommunication Services Reserve Bank Payment Services & Data Automated Clearinghouse Services Check Services Currency and Coin Services Daylight Overdrafts and Fees FedNow ® Service Fedwire Funds Services Fedwire Securities Services Fiscal Agency Services Master Account and Services Database National Settlement Service Financial Market Utilities & Infrastructures Supervision & Oversight of Financial Market Infrastructures Designated Financial Market Utilities International Standards for Financial Market Infrastructures Research, Reports, & Committees Federal Reserve Payments Study (FRPS) Payments Research Reports Payments System Policy Advisory Committee Economic Research Meet the Researchers Working Papers and Notes Finance and Economics Discussion Series (FEDS) FEDS Notes International Finance Discussion Papers (IFDP) Data, Models and Tools Economic Research Data FRB/US Model Estimated Dynamic Optimization (EDO) Model Survey of Consumer Finances (SCF) Data Data Download Program Bank Assets and Liabilities Aggregate Reserves of Depository Institutions and the Monetary Base - H.3 Assets and Liabilities of Commercial Banks in the U.S. - H.8 Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks Charge-Off and Delinquency Rates on Loans and Leases at Commercial Banks Senior Financial Officer Survey Senior Loan Officer Opinion Survey on Bank Lending Practices Bank Structure Data U.S. Domestically Chartered Commercial Banks Minority Depository Institutions Structure and Share Data for the U.S. Offices of Foreign Banks Business Finance Commercial Paper Finance Companies - G.20 New Security Issues, State and Local Governments New Security Issues, U.S. Corporations Dealer Financing Terms Senior Credit Officer Opinion Survey on Dealer Financing Terms Exchange Rates and International Data Foreign Exchange Rates - H.10/G.5 International Summary Statistics Securities Holdings and Transactions Statistics Reported by Banks and Other Financial Firms in the United States Structure and Share Data for U.S. Offices of Foreign Banks Financial Accounts Financial Accounts of the United States - Z.1 Household Finance Consumer Credit - G.19 Household Debt Service Ratios Mortgage Debt Outstanding Survey of Consumer Finances (SCF) Survey of Household Economics and Decisionmaking Industrial Activity Industrial Production and Capacity Utilization - G.17 Interest Rates Selected Interest Rates - H.15 Micro Data Reference Manual (MDRM) Micro and Macro Data Collections Money Stock and Reserve Balances Factors Affecting Reserve Balances - H.4.1 Money Stock Measures - H.6 Other Yield Curve Models and Data Consumers & Communities Regulations Community Reinvestment Act (CRA) All Regulations Supervision & Enforcement CA Letters Enforcement Actions Independent Foreclosure Review Community Development Housing and Neighborhood Revitalization Small Business and Entrepreneurship Employment and Workforce Development Community Development Finance Rural Community and Economic Development Conferences Research & Analysis Survey of Household Economics and Decisionmaking Research Publications & Data Analysis Community Advisory Council Resources for Consumers Frauds and Scams Mortgage and Foreclosure Resources Federal Reserve Community Development Resources Home News & Events Speeches Speech PDF May 14, 2026 Opening Remarks Vice Chair for Supervision Michelle W. Bowman At the Federal Reserve Bank of Kansas City 2026 Future of Banking Conference: Powering Progress, Protecting Trust, Kansas City, Missouri (via pre-recorded video) Share Accessible Keys for Video [Space Bar] toggles play/pause; [Right/Left Arrows] seeks the video forwards and back (5 sec ); [Up/Down Arrows] increase/decrease volume; [M] toggles mute on/off; [F] toggles fullscreen on/off (Except IE 11); The [Tab] key may be used in combination with the [Enter/Return] key to navigate and activate control buttons, such as caption on/off. Introduction Thank you, President Schmid, for the invitation to join you today, and thanks also to the Federal Reserve Bank of Kansas City for hosting this conference for community bankers on the future of banking. While I am not able to be with you in person today, I appreciate being able to join you virtually. As many of you know, this is my hometown Reserve Bank. Visiting the KC Fed is a little bit of a homecoming for me because Kansas is where I began my banking career at my family's rural community bank, and where I learned the lessons as a banker and as a state bank commissioner that continue to shape my perspective as a Governor and now as the Vice Chair for Supervision. Personal connections in the community create deep local knowledge, enabling lending decisions based not solely on credit scores, but on relationships, history, and character—elements that no algorithm can replicate. While my regulatory perspective has broadened over the years, the fundamental lessons from community banking—relationship focus, community stewardship, and practical risk management—remain central to how I approach supervision and regulation. They also fundamentally inform how I think about tailoring. Six hundred thirty-nine community banks call the 10th District home. Not only does it have the second-largest geographic area under Fed supervision, but more than half of the District's banks are headquartered in rural areas. Its area is significant—and it is a microcosm for understanding the future of community banking across America. In this District, banks serve distant rural communities alongside concentrated urban centers. They navigate commodity price volatility that can transform local economies in a single growing season. They compete against financial institutions that are well-funded but have no physical branches. Yet these community banks are remarkably resilient. They have developed specialized lending expertise that larger institutions simply cannot replicate. They create deep customer relationships that transcend transactional banking. Many have partnered strategically with fintechs rather than viewing them solely as competitors and have continued to profitably serve communities providing essential financial services. The business model works when it is executed with skill and commitment. Innovations created in this District often become standard practice nationwide. Many agriculture banks created mobile banking solutions to serve their customers, many of whom are farmers, spread across large geographic areas making accessing brick-and-mortar locations significantly challenging while tending to their daily operations. Similarly, an Oklahoma bank created a mobile banking application focused on the financial well-being of our military service members. This bank has demonstrated commitment toward modernizing the banking experience for members of the U.S. military, offering checking, savings, and mortgage products. That's why the theme of this conference, the "Future of Banking," is particularly fitting. In so many ways, 10th District banks are already building that future. Our renewed regulatory and supervisory approach implementing tailored requirements and expectations focused on material financial risks is designed to support that future. The Challenge: One-Size-Fits-All Since the global financial crisis, the regulatory and supervisory approaches designed for large institutions have often been pushed down to community banks. That one-size-fits-all approach creates an unlevel playing field for community banks in an increasingly competitive environment with evolving customer needs. While there are many examples, I will focus on two that will clearly explain the one-size-fits-all problem. The current expected credit loss (CECL) accounting framework requires sophisticated modeling that is more appropriate for large complex institutions. The resources, specialized staff, extensive data sets, and auditing associated with complex lifetime loss forecasting creates an ongoing cost and compliance burden that provides no meaningful benefit for community banks that rely on straightforward lending practices and close relationships with borrowers. Similarly, Regulation O, while important for preventing conflicts of interest, imposes disproportionate burdens on community banks where local board members often have the deepest understanding of local credit conditions. In some rural communities, local business leaders are not willing to serve on a community bank board because they would lose the ability to obtain credit cards or lines of credit from the bank or be forced to bank outside the local rural community. The supervisory approach to Regulation O compliance appears to have evolved in a manner that can treat minor technical violations and inadvertent errors with a degree of severity more comparable to substantive violations. In some cases, examiners have issued matters requiring attention and other supervisory criticisms, including enforcement actions for menial, unintentional Regulation O issues that do not trigger the rule's concern about preferential treatment. As a result, a significant number of banks have determined that the compliance risk associated with extending credit to their officers and directors exceeds any business justification for doing so. These banks have adopted blanket policies prohibiting all extensions of credit to insiders, including routine consumer products like credit cards, overdraft facilities, and residential mortgage loans. Consequently, senior officers and directors cannot rely solely on their local bank but must establish banking relationships with another bank. The same principle of appropriate tailoring that applies to regulations must also include supervision. Traditional supervisory approaches often ask, "Why should we allow this?" rather than "Why shouldn't we?"—a posture that disadvantages banks seeking to adapt to market changes and customer needs. To address this, we published supervisory operating principles to govern our supervisory activities. These principles appropriately focus our supervision on material financial risks. This isn't about lowering standards; it's about focusing supervisory attention on what matters most—what leads a bank to fail—and identifying as early as possible significant threats to safety and soundness. Clarifying standards for issuing Matters Requiring Attention (MRAs) supports this approach. In the past, banks received MRAs for procedural matters or for deviating from best practices—an approach that inherently favored established processes over innovation and focused examiner attention on form over substance. Our new approach establishes a clear standard for MRAs and Matters Requiring Immediate Attention (MRIAs) to be issued to address deficiencies that could lead to a material impact on a bank's financial condition—not procedural or documentation shortcoming that poses no genuine threat to safety and soundness. Under this approach, an MRA or MRIA will be issued for an unsafe or unsound condition when a deficiency, if left unaddressed, would create a significant probability of significant harm to the bank's financial condition, or has already caused significant actual harm. To be clear, prioritizing material risks does not mean overlooking threats to critical operations. Cybersecurity and operational resilience remain essential supervisory concerns. Banks must maintain robust defenses against these evolving threats. Preserving safety and soundness remains a priority. But our framework should distinguish between material risks that genuinely threaten bank safety and soundness and procedural variations that are effective, but that simply differ from convention or supervisory expectations. Additionally, together, the federal banking agencies finalized an update to the community bank leverage ratio. These changes offer enhanced flexibility without compromising robust capital standards, better positioning community banks to focus on their primary mission to serve the businesses and families in their communities. An effective regulatory framework should enable well-managed institutions to grow, reach underserved markets, and adapt to changing conditions—all while preserving the safety and soundness that protects depositors and maintains public confidence in our banking system. Turning to emerging challenges like artificial intelligence, custody of digital assets, and evolving payment systems, the Fed's role is to understand and encourage risk management of the use of these technologies. Genuine collaboration is critically important—where supervisors bring risk-management perspective and regulatory expertise, and bankers bring market knowledge and a deep understanding of customer needs. This conference, and events like it, are essential to this process. They enable us to hear directly from you, understand the realities you face, and adjust our approach accordingly. Closing Thoughts The future of community banking relies on each of the banks participating in this conference. Demand for local knowledge, a trusted relationship focus, creative problem-solving, and an unwavering commitment to your community are what will enable your success in evolving markets. Regulatory frameworks that support rather than constrain your efforts are also required. The past 15 years have demanded your remarkable resilience and adaptability. Thank you for thriving in the face of adversity. As a former banker, state bank regulator, governor and now Vice Chair for Supervision, I am committed to ensuring that both regulation and supervision are appropriately tailored to bank size, complexity, risk and business model while encouraging responsible innovation and strategic adaptation to meet the expectations of the evolving financial market. President Schmid, thank you for hosting this event, and for your leadership of the 10th District. I look forward to seeing you again soon. Last Update: May 14, 2026 Back to Top Board of Governors of the Federal Reserve System About the Fed News & Events Monetary Policy Supervision & Regulation Financial Stability Payment Systems Economic Research Data Consumers & Communities Connect with the Board Tools and Information Contact Publications Freedom of Information (FOIA) Office of Inspector General Budget & Performance | Audit No FEAR Act Español Website Policies | Privacy Program Accessibility Stay Connected Federal Reserve Facebook Page Federal Reserve Instagram Page Federal Reserve YouTube Page Federal Reserve Flickr Page Federal Reserve LinkedIn Page Federal Reserve Threads Page Link to Federal Reserve X Page Link to Federal Reserve Bluesky Page Subscribe to RSS Subscribe to Email Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue N.W., Washington, DC 20551

Nøglefraser.

Fuld tekst.