Regulation conversation exaggerated, claims Demchak from PNC
In a speech at the annual Goldman Sachs financial services conference, PNC CEO Bill Demchak expressed skepticism about the incoming Trump administration easing bank regulations, particularly those related to reputational risk. This skepticism comes in light of President Trump's executive order titled “Guaranteeing Fair Banking for All Americans,” signed on August 7, 2025, which aims to prevent politicized or unlawful "debanking" and promote fairer access to banking for all Americans.
The executive order directs federal banking regulators to remove reputational risk and similar concepts from their examination manuals and supervisory frameworks. While this order removes reputational risk from supervision criteria, it does not lessen banks’ obligations to comply vigorously with financial crime regulations, such as those enforced under the Bank Secrecy Act (BSA).
The order requires regulators to review past and current practices of banks for politically motivated restrictions and to take remedial actions if necessary. However, banking decisions should be grounded strictly in individualized, objective, risk-based analyses rather than political or religious considerations.
Demchak also mentioned that acquisitions could help the bank more quickly achieve scale, but PNC isn't looking to pay "a silly price" for a "busted" franchise. He stated that well-run banks will be able to buy other banks, and M&A activity will pick up because scale matters. However, Demchak did not express a strong intention for PNC to be involved in major M&A activities at current prices.
In addition to M&A, PNC is planning to spend $1.5 billion to organically grow over the next few years. The bank is also expanding its branch network and renovating some locations as it shifts from a regional to a national lender.
Regulators are also focusing on liquidity issues following the 2023 collapse of Silicon Valley Bank. Federal Reserve Vice Chair for Supervision Michael Barr said in September that the central bank is exploring the idea of requiring liquidity for uninsured deposits. Having liquidity to cover some percentage of uninsured deposits is expected to be a core requirement going forward.
Changes to liquidity requirements, including debt issuance provisions, a toned-down long-term debt requirement, and a reworking of the liquidity coverage ratio, are also expected. However, the impact of Basel III regulations on capital requirements remains uncertain.
The Consumer Financial Protection Bureau's cap on credit card late fees is a target of bank industry ire, and a judge this week denied the bureau's motion to dismiss a legal challenge to that rule. The article does not provide specific details about changes in retail policies or regulations expected under the next administration.
In summary, PNC's expectations for regulatory supervision may reflect a reduced emphasis on reputational risk in examinations and a clearer, more objective risk-based approach dictated by the Trump administration’s executive order aimed at ensuring fair access to banking services. The bank's focus remains on organic growth, strategic acquisitions, and maintaining a strong liquidity position in the face of changing regulatory requirements.
- The Trump administration's executive order aims to remove reputational risk from federal banking regulators' supervisory frameworks, but banks still need to comply with financial crime regulations enforced under the Bank Secrecy Act (BSA).
- PNC is planning to organically grow and expand its branch network, shifting from a regional to a national lender, while also maintaining a focus on maintaining a strong liquidity position as regulatory requirements change.
