Bowman confirmed as top regulator at Fed

WASHINGTON — Michelle Bowman has been confirmed by the U.S. Senate to be the Federal Reserve vice chair for supervision. 

The Senate confirmed Bowman’s nomination in a 48-46 vote, split along party lines. Once she is sworn in, Bowman will serve as the top bank regulator at the Fed, wielding considerable influence over key banking agenda items, including retooling the 2023 Basel III endgame capital proposal and broader deregulation of the industry. 

The tight vote for Bowman’s nomination was unexpected. Bowman is a favorite of the banking industry — and community banking sector in particular, having been a community banker herself. Moderate Democrats on banking issues would typically be relied upon to shore up the votes in favor of her nomination. The nomination and confirmation process, however, has been less bipartisan under the Trump administration as it pursues sweeping changes that Democrats argue undercuts the function of government and regulatory independence — a particular point of interest at the Fed. 

Bowman, for her part, promised to protect political independence at the Fed for monetary policy, but not specifically for bank regulation. 

“It is important that we maintain our independence with respect to monetary policy and the responsibilities that we have that are related to the economy,” she said at her confirmation hearing earlier this year. 

Sen. Mark Warner, D-Va., who ended up voting against her nomination, asked at the confirmation hearing what would happen if the Office of Management and Budget would implement a rule saying that the Fed had to check in on bank regulation rules with the White House. 

“I hope you would say that would be inappropriate,” Warner said. 

“We haven’t seen that happen at this point … ,” Bowman said.

“The key word … in that sentence is ‘at this point,'” Warner interrupted.

“But I appreciate that concern,” Bowman said. “I agree with the principles of cost-benefit analysis and ensuring that we’ve identified a problem that needs to be solved and we need to provide an analysis that supports rulemakings that we put forward. So I wouldn’t think we would have challenges with any rulemaking that we might want to engage in.”

Banking and industry groups applauded Bowman’s confirmation. 

“Sound banking regulation and supervision are crucial for maintaining a safe and robust financial system,” the Financial Services Forum president and CEO Kevin Fromer said in a statement. “As Vice Chair for Supervision, Governor Bowman will be instrumental in shaping policies and practices that affect the ability of banks to support our economy and promote financial stability. America’s leading banks look forward to working with Vice Chair Bowman to advance effective regulatory and supervisory policies that benefit the broader U.S. economy.”

“With her deep experience as a federal regulator, state regulator and community banker, Governor Bowman understands the real-world impact U.S. banking rules can have on the economy and consumers,” said Rob Nichols, American Bankers Association president and CEO in a statement. “We applaud the president for nominating her and look forward to working together to develop a rational bank regulatory framework that preserves the commitment to safety and soundness that we all share, while giving banks of all sizes the chance to support their customers and communities and drive the U.S. economy forward.” 

The credit union industry group also lauded her confirmation. 

“She brings strong financial services experience and expertise to the role as a former community banker and has met with credit union organizations many times through the years,” said Jim Nussle, America’s Credit Unions president and CEO in a statement. “Bowman is a strong ally for credit unions and our issues and agrees with our concern with the Fed’s proposal to cap debit interchange fees. Her role as Vice Chair for Supervision gives credit unions a stronger voice in financial regulation. We thank the Senate for moving quickly on her confirmation.”

Consumer groups and Democratic lawmakers have argued that Bowman’s promised deregulation could hurt consumers. 

“Trump has nominated Fed Gov. Michelle Bowman to become one of the most important financial regulators in the US and the world, the Vice Chair for Supervision at the Fed,” said Dennis Kelleher, president and CEO of Better Markets, in a statement. “Her job will be to protect the jobs, homes and savings of hardworking Main Street Americans from the profit-maximizing risks created by Wall Street’s biggest, most dangerous megabanks. Unfortunately, Bowman has the opposite views: while claiming to care about Main Street, she enthusiastically and unequivocally supports those banks’ priority of deep, broad and mindless deregulation, which will no doubt contribute to another horrific crash.”