Published Oct. 6, 2026, 4:18 p.m. EDT. The Federal Reserve is beginning a structural overhaul of bank supervision that will organize the system into five regions, each led by an official accountable for supervisory activity in that region.
Vice Chair for Supervision Michelle Bowman announced the change Tuesday in a speech at the Community Banking Research Conference in St. Louis. She said examiners will remain at existing Reserve Bank locations while leadership and decision-making are realigned around state boundaries.
Why the Fed says it is changing the structure
Bowman said the current system’s committees and divided responsibilities can delay action and blur accountability. She linked the restructuring to an independent review of supervision before the failure of Silicon Valley Bank, which identified a mismatch between authority and responsibility.
Under the initial five-region model, regional leaders will be responsible for supervisory activity across their territories. The Fed says following state lines should improve coordination with state and federal banking regulators while preserving local examination teams.
Asset thresholds also under review
The speech outlined additional changes still under consideration. Later in 2026, the Board is expected to consider increasing fixed-dollar asset thresholds to reflect inflation and economic growth, with a mechanism to update them every five years.
The Fed also plans to consider broader reforms to supervisory portfolios defined by bank size and the large-bank tailoring framework. Bowman argued that a fixed $10 billion definition of a community bank can push relatively simple institutions into a higher tier designed for more complex firms.
Those items are future policy proposals, not final rules. The five-region supervisory realignment, by contrast, is beginning now, according to the speech.
What it could mean for banks
The changes are intended to focus examinations on risks capable of causing material financial harm, give examiners clearer authority and reduce inconsistent supervision. Community banks could eventually face different reporting, merger-review and supervisory thresholds if the Board adopts the related proposals.
Any formal rule changes would follow the applicable federal process, including public proposals and comment periods. Follow AskNovus Finance for confirmed regulatory decisions and economic releases.
Featured image: Chicago Federal Reserve Bank building. Photo by Joshua Woroniecki on Unsplash.