The memo said that the cuts were announced by Fed Vice Chair for Supervision Michelle Bowman during a Thursday morning meeting and that the Fed hopes to achieve the cuts through attrition, retirements and the offer of a voluntary separation incentive, according to the report.
It also said that Bowman expects the division to operate with fewer management layers, rename its operations unit the “business enablement group” and create a new position focused on industry engagement, per the report.
Reached by PYMNTS, the Federal Reserve declined to comment on the report.
In a statement responding to the reported cuts, Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Banking Committee, said: “Here we go again. The Federal Reserve is recycling its pre-2008 financial crisis playbook. The agency is now gutting its supervision and regulation staff, while granting big banks their deregulatory wish list.”
Bowman said Thursday during a speech that the bank regulatory system has grown “extensively” in recent years, has become overly complicated, and has imposed “unnecessary and significant costs” on banks and their customers.
Delivering opening remarks at a public outreach meeting related to the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA), Bowman said: “The bank regulatory framework must strike a balance between encouraging economic growth and innovation while guaranteeing the safety, soundness and stability of the banking system.”
In May, Federal Reserve Chair Jerome Powell told staff in a memo obtained by PYMNTS that the Fed planned to cut its workforce by about 10% “over the next couple of years” amid a periodic review of its staffing levels.
“I have directed the leadership of the Federal Reserve, here at the Board and across the System, to find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission,” Powell wrote in the memo.
Bloomberg reported at the time that a 10% reduction across the Fed would amount to nearly 2,500 workers and would leave staffing levels close to where they were a decade earlier.
