Department of Financial Institutions seeks authority, staffing stability as assets surge

Commissioner Gonzales presented the Department of Financial Institutions' FY27 request, describing a $38,000,000 budget request to support 157 positions and outlining proposals to tailor regulation for smaller, well-rated banks.

Gonzales said the department is fully funded by the institutions it supervises and seeks a staffing approach that preserves regulatory effectiveness while reducing unnecessary federal-state alternation for routine exams. "Our suggestion is for the smallest, well-rated, non-complex banks to have exams solely performed by our department rather than alternating between federal and state government," the commissioner said, arguing the approach mirrors existing credit-union oversight.

Officials also described growth in trust and banking assets: the department said Tennessee now holds just under $300,000,000,000 in trust assets and has seen significant banking-sector asset growth due to mergers and market changes.

Committee members asked about reserve levels, staffing and how the department would scale during a downturn. Gonzales noted that while staffing had been reduced in earlier years, recent salary improvements have reduced examiner turnover and allowed recruitment of more experienced examiners.

After questions the chair moved the department's budget to the committee on finance; the motion passed on a recorded voice vote with eight ayes.