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Financial institutions regulator seeks authority to consolidate exams, asks for $38M budget
Summary
The Department of Financial Institutions asked the Commerce and Labor Committee to approve a $38 million budget to fund 157 positions and outlined a proposal to have state regulators perform all exams for small, well‑rated banks to reduce federal alternation; the committee moved the budget to finance.
Commissioner Gonzales told senators the Department of Financial Institutions’ 2027 request totals $38,000,000 to support 157 positions and that the agency is fully funded by the institutions it supervises. He described staffing and examiner challenges tied to industry consolidation and argued the agency is prepared to work with private capital and to right‑size regulatory burden.
On regulator responsibilities, the commissioner proposed that for small, well‑rated, noncomplex banks the state perform examinations rather than alternating exams with federal regulators. In committee counsel’s discussion the idea was framed as a way to reduce duplication for low‑risk institutions; Commissioner Gonzales said the department already performs many exams and could expand that role.
Members asked about the amount of assets held by Tennessee trust companies and staffing readiness for downturns. The commissioner said trust assets have grown substantially — “we are right under 300,000,000,000” — and acknowledged exam staffing would need to scale if the sector deteriorates. The committee voted to move the financial institutions budget to the committee on finance.
