Page 9 - February 20, 2025 Bulletin

aRTiCLeS

The third working group, led by Sen. Thom Tillis (R-N.C.), will and mandate.” The Federal Reserve has also pulled out of the
explore ways to address regulatory transparency, efficacy and coalition.
“reduce onerous or duplicative regulatory burdens,” according to Read more: https://www.fdic.gov/news/press-releases/2025/
a committee statement.
statement-acting-chairman-travis-hill
Read more: https://www.banking.senate.gov/newsroom/majority/
scott-announces-banking-committee-working-groups Trump Revokes Biden Orders on AI,

FDIC’s Hill Outlines Agency Priorities Climate-Related Financial Risks
in New Administration As part of a sweeping action revoking multiple Biden-era policies,
President Trump has rescinded a 2023 executive order directing
Acting FDIC Chairman Travis Hill has released a list of priorities federal agencies to review and possibly draft new rules governing
for the agency in coming months, promising to revisit the FDIC’s the use of artificial intelligence across multiple sectors of the
process for reviewing proposed bank mergers, to take a more economy, including financial services. Trump also rescinded a
“open-minded” approach to bank adoption of technology and to 2021 executive order seeking more disclosure of financial risks
rescind “problematic” Biden-era proposed rules, such as those on linked to climate change.
brokered deposits and corporate governance.
Among other things, the order by former President Biden
President Trump designed Hill as acting chairman following encouraged agencies to use their authority to address financial
the departure of former FDIC Chairman Martin Gruenberg. stability risks posed by AI. It also required the developers of
In announcing the list of priorities, Hill said the FDIC “always many AI systems to share their safety test results and other critical
will fulfill our mandate to promote a safe, sound and resilient information with the U.S. government, set standards and best
banking system.” practices for detecting AI-generated content as a tool for fighting
consumer fraud, and establish an “advanced” cybersecurity
Hill said the FDIC will conduct a wholesale review of
regulations, guidance and manuals “to ensure our rules and program to develop AI tools to find and fix vulnerabilities in
approach promote a vibrant, growing economy.” Among the critical software.
items targeted for review is a 2024 statement on bank merger Some parts of the Biden-era order have already been completed.
policy that Hill opposed as FDIC vice chairman. Among other For example, it directed the Treasury Department to submit
things, the policy revised the FDIC merger review process to a report on best practices for financial institutions to manage
consider concentrations on products and services beyond those cybersecurity risks posed by AI. The report was released in 2024.
based on deposits, such as the volume of small business or Trump did not revoke a more recent order by Biden directing
residential loan originations. government agencies to update their IT and cloud services
policies to strengthen cybersecurity.
Hill said the FDIC will replace the policy “to ensure that merger
transactions that satisfy the Bank Merger Act are approved in a The 2021 order on climate change directed government agencies
timely way.” As for technology adoption, he said the agency will to push for “accurate disclosure of climate-related financial risk,”
embrace a more transparent approach to fintech partnerships and directed financial regulators to consider measures to enhance
and to digital assets and tokenization. It will also work to climate-related disclosures.
address the growing technology costs of community banks.

Other FDIC priorities include withdrawing proposed rules Survey: Many Americans Do Not
on brokered deposits and corporate governance, directing Have Emergency Funds
supervisors to focus more on core financial risks, re-evaluating
the supervisory appeals process, modernizing implementation of More than two in five Americans – and nearly half of women
the Bank Secrecy Act, and studying deposit behavior “to develop – do not have emergency savings funds, according to a recent
a more sophisticated understanding of the relative stability of survey by U.S. News and World Report. The survey also found
different types of deposits and depositors.” that 40% of Americans couldn’t cover a $1,000 emergency
expense with cash or savings, although 60% of respondents said
In related news, the FDIC has announced that it has withdrawn they had an unexpected expense pop up in the past year.
from the Network of Central Banks and Supervisors for
Greening the Financial System, which was launched to tackle Forty-nine percent of women do not have emergency funds
climate change risk in the financial sector. The FDIC said the compared to 36% of men, according to the report. The median
work of the coalition “is not within the FDIC’s authorities balance for people who had emergency funds was $6,500 among
women and $11,000 for men.

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