Public engagement is useful when crafting regulation, but when banking agencies overwhelm the process “by publishing thousands of pages of rulemakings in a short period of time,” the ability for the public to provide meaningful comment is compromised, Federal Reserve Governor Michelle Bowman said today.
During a speech in Florida, Bowman reiterated her concerns about the volume of rules being proposed by regulators, particularly the proposed Basel III endgame capital requirements. Many came after the failure of Silicon Valley Bank in 2023, yet that crisis should not represent “a regulatory blank check,” she said.
“In some ways, it presents heightened risks that should prompt us to show our work even more carefully,” Bowman said. “A deliberate, transparent and fact-based approach to pursuing statutory objectives also serves the goal of avoiding the impression of pursuing unrelated policy goals, particularly those that venture into political concerns outside of an agency’s purposes or functions.”
Bowman said that last year alone, regulators published more than 5,000 pages of rules and proposals. That volume harms the ability of the public to analyze and provide feedback, but even when provided, “regulators often ignore this constructive feedback and move forward to publish final rules with minimal or no changes relative to their proposals, as with the Community Reinvestment Act rule.”
“When agencies prioritize the creation of new regulation in the absence of a statutory mandate, harmful and unintended consequences can result,” Bowman said.
