U.S. Bancorp Vows to Shrink Itself to Avoid Added Fed Scrutiny

U.S. Bancorp promised federal regulators it would shrink its balance sheet and reduce its risk profile, a move that frees it from more stringent regulations.

The nation’s largest regional lender won approval from the Federal Reserve to retain its designation as a Category III bank, it said in a regulatory filing. That means it faces less costly and time-consuming regulations.

The promises to shrink itself came after the lender, which had $665 billion in assets as of Sept. 30, spent months preparing to comply with the rules associated with becoming a so-called Category II bank, a designation given to ...