A Vision for Banking Policy Reform: Insights from FDIC Vice Chairman Travis Hill

As the FDIC transitions to new leadership, Vice Chairman Travis Hill has outlined significant policy priorities to enhance supervision, foster innovation, and address emerging challenges in banking. Here’s a breakdown of his vision for the agency.

Current banking oversight often emphasizes procedural compliance over core financial risks. Hill advocates revisiting the CAMELS rating system and improving examiner training to prioritize risk management and bank solvency over process minutiae.

To keep pace with technological advancements, the FDIC plans to rejuvenate its innovation lab, FDiTech, and streamline the integration of fintech, AI, and digital assets. This includes creating clear, transparent guidelines for bank-fintech partnerships and reconsidering restrictive policies around digital asset engagement.

Hill calls for an end to unjustified account closures, particularly for law-abiding customers in politically sensitive industries. He emphasizes balancing Bank Secrecy Act compliance with the fundamental need for equitable access to banking services.

While acknowledging the impact of natural disasters, Hill argues that climate-related risks should not be a central focus for the FDIC and urges a withdrawal from international "greening the financial system" initiatives.

Hill envisions a recalibration of U.S. capital standards, aligning them more closely with global frameworks while addressing industry feedback to reduce unnecessary complexity.