If you run risk or compliance at a bank, what’s changing in bank compliance has been hard to keep pace with, and 18 months in, most teams are still working out what it all adds up to. The short version is that Washington has gotten friendlier and more coordinated, and banks are starting to feel it in how they get examined.
To unpack what that means, Travillian Next host Keith Daly sat back down with Ian Moloney, Chief Policy Officer at American Fintech Council. They cover the move away from reputation risk, the first CAMELS rating rewrite since 1996, the fresh look bank examiners are giving fintech partnerships, and where AI governance fits into all of it. If bank compliance, bank supervision, or fintech is your world, this is the status check worth pressing play on.
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Looking for the right people to lead through changes like these? Connect with Keith Daly, Principal, Banking & Fintech Search at Travillian, to talk talent: kdaly@travilliangroup.com
What’s Changing in Bank Compliance: Episode Breakdown
00:22: Ian Moloney Returns to Travillian Next
Keith welcomes Ian Moloney, Chief Policy Officer at American Fintech Council, back to the show. It’s Ian’s first appearance since right before the 2024 election, which sets up a wide-ranging catch-up on bank regulation and what has changed in Washington over the past 18 months.
00:43: A More Coordinated Approach to Bank Regulation
Ian frames the state of bank regulation under the new administration, describing a far more coordinated approach across the prudential regulators than the industry saw before, and explaining how the dual federal and state framework shapes bank compliance at every level.
02:56: Why People Are Policy at the Banking Agencies
Ian explains why regulatory coordination is working, and it starts with personnel. Many leaders now running the federal banking agencies worked together during the first Trump administration, including OCC Comptroller Jonathan Gould, the FDIC’s Travis Hill, and Federal Reserve Vice Chair for Supervision Michelle Bowman. His takeaway for anyone tracking bank policy is that people are policy.
04:52: Does Leadership Change Reach Bank Examiners?
Keith asks whether leadership change at the top actually reaches bank examiners and the bank examination process on the ground. Ian builds his answer around both political appointees and career staff, the people who shape day-to-day bank supervision.
05:41: Examiner Turnover Is Reshaping Bank Supervision
Ian breaks down the turnover reshaping bank supervision. Many 30-year veteran bank examiners have retired amid reductions in force, and as that experience exits, the institutional inertia that once slowed financial technology and innovation inside the agencies is beginning to loosen.
07:05: Reputation Risk Out, Material Financial Risk In
Here’s the core bank compliance shift. Ian describes regulators refocusing examinations on material financial risk and pulling reputation risk out of the examination handbooks, part of a broader push to let bank managers manage their own risk rather than meet softer supervisory expectations.
09:17: What’s Changing for Sponsor Banks and Fintech Partnerships
Keith turns to sponsor banks and fintech partnerships. Ian details a more forward-leaning regulatory posture toward innovation at the community bank level, where many American Fintech Council member banks partner with fintech companies, and how examiners are reassessing bank-fintech relationships without simply deregulating.
10:10: Modernizing the Rules and Supervisory Appeals
The conversation moves to modernizing the bank regulatory framework. Ian highlights legislative work from the House Financial Services Committee on examination frequency and right-sizing bank supervision to asset size and risk, plus the need for a strong supervisory appeals process at the FDIC and OCC when banks face adverse actions.
11:37: The First CAMELS Rating Rewrite Since 1996
Ian shares the headline regulatory development. The prudential regulators recently came together to modernize the CAMELS rating for the first time since 1996, a move he sees as a chance to cut unnecessary box-ticking and deliver more efficient, more effective bank examinations.
12:36: Third-Party Risk Management and Standard Setting
Ian digs into third-party risk management and standard setting for bank-fintech partnerships, pointing to the Coalition for Financial Ecosystem Standards and the appetite to build on the third-party risk management guidance banks already follow.
13:56: How Seriously Regulators Take AI Governance
The AI governance conversation begins. Keith asks how seriously regulators take AI in banking, and Ian explains that AI is not a single monolithic tool, that federal financial laws were written to be technology neutral, and that fair lending rules and adverse action requirements still apply no matter the model. The real movement, he says, is in regulatory guidance and supervisory expectations.
16:48: State AI Laws, Colorado, and Preemption
Ian widens the AI policy lens to the states. He covers the administration’s AI action plan and its focus on federal preemption, using Colorado’s AI law as a cautionary example of overly expansive state regulation before a better bill followed.
18:10: Should Bank Regulators Adopt AI Themselves?
Keith asks whether regulators can keep pace with AI and whether the agencies should adopt AI tools internally. Ian argues bank examiners should stay one or two steps behind the cutting edge by design, not six or seven, and that examiner education and regulatory technology can close the gap.
19:52: AI Versus Synthetic Fraud
The discussion shifts to AI and fraud. Ian describes the cat-and-mouse game of synthetic fraud and emerging scams, where bad actors use the same AI tools as the banks, and why AI has become essential for detecting fraud patterns and anomalies fast.
20:39: Why AI Complements Compliance Instead of Replacing It
Ian draws a clear line for compliance teams. AI should complement existing bank compliance and risk management work rather than replace it, since AI is far better than people at catching the patterns that drive modern fraud detection.
22:07: What the 2026 Midterms Could Mean for Bank Regulation
Keith raises the 2026 midterms and their impact on bank regulation. Ian keeps it measured, noting that elections always have consequences but that a split Congress would change the tone of regulatory oversight more than the direction of the prudential regulators’ work.
24:52: The CFPB as a Political Flashpoint
The two discuss the Consumer Financial Protection Bureau (CFPB) as the likeliest political flashpoint if the midterms shift the balance of power in Washington.
25:11: AFC’s Busy June and Wrap-Up
They wrap with a look at the American Fintech Council’s busy June, including its chief risk and chief compliance officer roundtable, and AFC’s running motto that the organization is everywhere.
