The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a Full Committee Hearing on June 25, 2025, to discuss the Semiannual Monetary Policy Report to Congress. A significant focus of the meeting was the Federal Reserve's recent decision to remove the asset cap on Wells Fargo, which received unanimous support from all seven Federal Reserve governors.

During the hearing, committee members expressed appreciation for the Fed's recognition of reputational risk and its efforts to address it. This acknowledgment follows actions taken by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Historically, the Fed's supervision and regulation reports have included reputational risk within the management component of the CAMELS rating system, often lacking clear metrics or accountability. This ambiguity has raised concerns about its impact on the Fed's core mission of monitoring capital, liquidity, and operational resilience.

Committee members sought clarity on how the Federal Reserve plans to implement a more objective and disciplined approach to supervision at the examiner level. They also inquired about potential regulatory updates. Vice Chair for Supervision, Bowman, who has a background in supervision, was highlighted as a key figure in fostering effective relationships with examiners and ensuring the successful implementation of these changes.

The discussions underscored the Fed's commitment to enhancing its supervisory framework and addressing reputational risks, signaling a shift towards more transparent and accountable regulatory practices. The outcomes of this meeting may influence future regulatory approaches and the overall stability of the financial system.