Federal Reserve Governor Michelle Bowman today urged the Fed board to reconsider its approach to adverse comments in bank applications, pointing to a recent example of a branch approval that was delayed by months because of a single comment.
The Fed approved an application by California-based Commonwealth Business Bank to establish a branch in New Jersey. In comments accompanying the announcement, Bowman said she supported the approval but noted that because the Fed received a single adverse comment, the application had to go before the full Fed board for review and vote. “Instead of being acted upon by the Reserve Bank under delegated authority within approximately 30 days, this application has only just been presented to the board for action nearly six months later,” she said.
“This case is emblematic of the current deficient approach to processing applications in cases where a member of the public has made an adverse comment, particularly when the recent supervisory record addresses the concerns raised and is consistent with approval,” Bowman said. “It is time for the board to revisit its current approach to adverse comments.”
In a post on X, the American Bankers Association said it supports Bowman’s call for timely action on bank applications. “Streamlining the process will promote transparency, support forward-looking management, and strengthen safety and soundness,” the association said.
Bowman was nominated by President Trump this week to become the Fed’s next vice chair for supervision. She has been critical of some of the policies pursued by bank regulators in recent years and has called for several reforms, including a return to regulatory tailoring.
