Regulatory Alerts2025-10-30 | 2025-19715Prohibition on Use of Reputation Risk by Regulators
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation propose to codify the elimination of reputation risk from their banking supervision frameworks. The rule prohibits these regulators from criticizing institutions or taking adverse actions based on reputation risk, and bars them from requiring or encouraging banks to close accounts or modify services due to political, social, cultural, or religious views. By removing this subjective metric, the agencies aim to reduce regulatory overreach, conserve supervisory resources for measurable financial risks, and ensure fair access to banking services without political bias.
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