As part of its strategy to prevent similar collapses in the future, the FDIC is no longer letting two of the so-called Big Three asset money managers—BlackRock, and Vanguard—self-attest that their enormous size has not let them to exert undue influence on banks’ operations. Instead, the agency is asking the asset managers to share data that will allow it to directly confirm such attestations.

While the proposed regime is the same for all three asset managers, they have pursued different courses in response.

Vanguard, which manages over $10 trillion of assets, has already signed the deal, while BlackRock, according to Bloomberg, has been equivocating ahead of the inauguration of President-elect Trump, whose incoming administration is widely expected to take a more laissez-faire approach to regulation.

The FDIC and BlackRock declined to comment about the status of the agreements.

Vanguard chose to sign the FDIC agreement in order to ensure to safeguard its broader policy of passive investing—including when it comes to the bank industry—whose shares are among the baskets of assets it controls. “Vanguard is built around passive investing and has long been committed to working constructively with policymakers to ensure that passive means passive,” said spokesman Netanel Spero in a statement.

‘Regulatory comfort‘

The changes to the way BlackRock and Vanguard might be required to prove they don’t influence banks goes back to early 2023, when Santa Clara, California-based Silicon Valley Bank; New York-based Signature Bank; and San Francisco-based First Republic Bank collapsed.

While First Republic was essentially bailed out by JPMorgan Chase via an acquisition, the FDIC estimated the failures of SVB and Signature Bank collectively cost $18.5 billion. Treasury Secretary Janet Yellen approved a so-called “systemic risk exception” letting the FDIC fully protect those depositors—not just the ones traditionally insured for up to $250,000—through the formation of a “bridge bank” while the FDIC stabilized the situation.

While there is no evidence the asset managers directly contributed to the 2023 banking crisis, officials have expressed concern over the degree of “regulatory comfort” they enjoy even as they hold large numbers of banks shares, which come with voting power. In a speech to lawyers last January, FDIC director Jonathan McKernan cited research that claims that the voting power held by the three asset managers could grow to 40% of shares.

In the speech, McKernan noted that recent professions by the firms in favor of ESG and other corporate policies suggested they may not always adhere to their policy of remaining “passive” when it came to exerting the influence that comes with holding large amounts of bank stock.

“We at the FDIC, as well as the other banking regulators,” McKernan said, “should revisit the regulatory comfort that we have provided some of the Big Three as to how much they can own, and what activities they may engage in, without being found to “control” a banking organization.” In July the FDIC published a request for information.

Claims of redundancy

Though McKernan initially included State Street in the “investigation” into large asset manager passivity, the final proposal does not affect the bank holding company.

BlackRock’s head of regulatory affairs, Benjamin Tecmire, responded in a letter to the FDIC in October, saying a passivity agreement the asset manager has with the Federal Reserve already ensured they weren’t influencing banks. “BlackRock complies fully with the terms of our passivity agreement,” wrote Tecmire, “and the other legal and regulatory frameworks that govern our passive investments in banks and other companies.”

BlackRock today reported that in Q4 last year it generated revenue of $5.68 billion revenue, up 22.6% over the same period last year. Earning-per-share came in at $11.93, compared to $9.66 a year ago.

On the other hand, as the year was coming to an end, Vanguard agreed to give the FDIC additional data on certain bank holding companies, and also ended a process called “mirror voting” where the firm is allowed to vote shares in proportion to how other shareholders voted. Vanguard also agreed to provide the FDIC with regular reporting on how it engages with portfolio companies and how it votes on company proxy ballot items to allow the FDIC to confirm whether it’s passive.

BlackRock’s new deadline is March 31, according to the Bloomberg report.

Correction: This article was updated to clarify that State Street was not subject to the FDIC’s final proposal.