Regulatory Alerts2026-04-10 | 2026-06947Prohibition on the Use of Reputation Risk by Regulators
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have issued a final rule codifying the elimination of reputation risk from their banking supervision programs. The regulation prohibits both agencies from criticizing institutions or taking adverse supervisory actions based on reputation risk, while also barring them from forcing banks to close accounts or modify services due to political, social, cultural, or religious views and constitutionally protected speech. By removing this subjective metric, the rule ensures regulators focus on concrete financial risks and prevents regulatory overreach that unfairly penalizes law-abiding businesses for politically disfavored but lawful activities.
Share