Warren Presses Fed, OCC, FDIC to Restore Bank Examiner Powers on AI Cyber Risk

Sen. Elizabeth Warren, D-Mass., asked three federal regulators Friday to rescind updated supervisory policies she argues restrict bank examiners' authority to issue warnings and enforcement actions as AI-enabled cyber threats grow more sophisticated. Warren, the top Democrat on the Senate Banking Committee, objected to a September update to the Federal Reserve's supervisory operating principles, which she said limits action unless there is "an abnormal probability of abnormal harm." In a letter to Fed Vice Chair for Supervision Michelle Bowman, she cited a June Texas Bankers Association survey finding 76% of banks saw more cyberattacks over the past year and 84% are raising cybersecurity spending. Separately, Warren urged the Office of the Comptroller of the Currency and the FDIC to reconsider an August change narrowing the definition of unsafe and unsound practices, saying examiners can now act only if harm is "likely" rather than "possible" or "plausible." She warned that letting vulnerabilities fester could threaten financial stability and said regulators "will share responsibility" for harm from future attacks.