Agencies Issue Final Rule to Prohibit Use of Reputation Risk by Regulators

Summary:

On April 7, 2026, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (the agencies) jointly issued a final rule to codify the removal of reputation risk from their supervisory programs. 

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions.

Highlights:

Final Rule

• The final rule prohibits the agencies from criticizing, formally or informally, or taking adverse action against a supervised institution or any employee of an institution on the basis of reputation risk.
• The final rule also prohibits the agencies from requiring, instructing, or encouraging an institution to close customer accounts or take other actions on the basis of a person’s or entity’s political, social, cultural, or religious views or beliefs, constitutionally protected speech, or solely on the basis of politically disfavored but lawful business activities perceived to present reputation risk.
• The final rule does not impose requirements or obligations on supervised institutions.
• The final rule defines “reputation risk” as any risk, regardless of how that risk is labeled, that an action or activity of an institution could negatively impact public perception of the institution for reasons not clearly and directly related to the financial or operational condition of the institution.
• The final rule takes effect 60 days after the date of publication in the Federal Register.

FDIC Examination Manuals and Other Documents

• References to reputation risk were removed from the following FDIC examination manuals and other documents:
  • Risk Management Manual of Examination Policies;
  • Application Procedures Manual;
  • Trust Examination Manual;
  • Applying For Deposit Insurance – A Handbook for Organizers; and
  • Consumer Compliance Examination Manual.
• The FDIC will continue to work with the other federal banking agencies to remove references to reputation risk from interagency materials.