In response to shifting market dynamics and increasing competition in the financial services industry, the Federal Reserve is contemplating changes to its framework for antitrust analysis, Fed Governor Michelle Bowman told attendees at the American Bankers Association’s virtual Conference for Community Bankers today.
She noted that such changes should “better reflect the competition that smaller banks face in an industry quickly being transformed by technology and non-bank financial companies,” and that the Fed is already in the process of gathering feedback from community bankers on the framework “and its impact on their business strategies and long-term growth plans.” She added that as the Fed reviews this feedback, it will be “specifically considering the unique market dynamics faced by small community banks in rural and underserved areas.”
Bowman also discussed several Fed initiatives in progress that are aimed facilitating innovation and technology integration, including “clearer guidance on third-party risk management, a guide on sound due diligence practices, and a paper on fintech-community bank partnerships and related considerations.”
In a question and answer session with ABA President and CEO Rob Nichols following her remarks, Bowman also praised the community banking industry’s response to the COVID-19 pandemic—particularly the execution of the Paycheck Protection Program, which she called the “backbone of our economic recovery.”
“Community banks under $10 billion in assets distributed 60% of the first round of PPP loans,” Bowman said. “Banks under $1 billion in assets distributed 20% of funds throughout the program. That’s a completely outsized participation throughout the financial services industry.”
