Fed Drafts Plan to Lift Bank Oversight Thresholds Toward $1 Trillion Under Trump Push

The Federal Reserve is drafting a plan that would let America's biggest regional banks grow a lot larger before facing its toughest rules. Four people with knowledge of the work told Reuters the Fed wants to raise the asset cutoffs that trigger stress tests, liquidity and capital requirements, and heavier reporting.

Three of them expect a formal proposal later this year. A Fed spokesperson declined to comment.

The lines that decide how a bank is treated

Today's cutoffs date to 2019. Stricter oversight starts at $100 billion in assets, steps up at $250 billion and again at $700 billion.

Crossing $100 billion is expensive. Banks say it often means tens of millions of dollars a year in compliance staff, risk systems, stress testing and reporting.

The Fed is weighing a top threshold closer to about $1 trillion and nudging some lower-tier obligations up to around $150 billion, Quartz reported. The logic is reindexing for inflation and economic growth. Michelle Bowman, the Fed's Vice Chair for Supervision, floated a nominal GDP reindex in January that could land the top line near $960 billion.

Who gets breathing room

The biggest winners sit just under the $700 billion line. U.S. Bancorp, Capital One, PNC and Truist would have more room before hitting the heaviest oversight, including parts of incoming capital rules and daily reporting to supervisors.

Lower down, Western Alliance, Zions and similar lenders could cross $100 billion without inheriting the full current suite. Pinnacle and one or two others already between $100 billion and $150 billion might shed some requirements.

A U.S. Bancorp spokesperson said the economy has grown significantly over the past seven years and that rules should support consumers and small businesses through lending capacity and competition.

A merger wave in waiting

The thresholds have quietly frozen deal-making in the middle of the industry. Lenders between $50 billion and $700 billion completed only 33 bank and thrift acquisitions in the last ten years, and just seven in the most recent year, according to S&P Global Market Intelligence data. Looser lines could unlock mid-size consolidation.

The plan is part of a broader Trump administration overhaul of bank supervision, with Bowman also rewriting capital rules and the supervisory regime. It sits alongside other shifts in Washington, like the Fed's work on stablecoin rules under the GENIUS Act.

The pushback

Democrats and other critics point out that Congress already loosened these rules in 2018. Fewer, bigger lenders can mean less competition, thinner consumer services and more systemic risk, they argue, and asset triggers, while imperfect, are at least practical and transparent.

Nothing is final. There is no proposal on the table yet, no vote, and no act of Congress, and no bank is deregulated today. But the direction is clear, and the regional banks sitting just under the old lines are already doing the math.