Davis Polk partner and Financial Institutions practice head Margaret Tahyar was quoted in Observer discussing debanking and bank regulator consolidation.

“Debanking is a credible issue,” Margaret said. She argued it is a result of anti-money laundering and fraud regulations, which have resulted in “weird incentives where supervisory staff push banks to be as risk-averse as possible.” Margaret continued, noting that the U.S. must enforce a money-laundering system that prohibits wrongful activity but avoids creating an overly cautious culture that results in the wrongful termination of innocent people’s accounts.

Discussing potential consolidation of the bank regulators, Margaret said, “There will be a root-and-branch reform of the CFPB, rather than the deletion of the organization.” She noted there is a serious need to reconsider how the federal government regulates the banking system, saying, “Why do we have five sets of supervisory staff at the federal level? Can we be more efficient?”

“Jamie Dimon’s Call for Banking Regulatory Reform Resonates With Wall Street,” Observer (March 4, 2025) 

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