FDIC, OCC, and Federal Reserve Announce Removal of Reputation Risk From Internal Guidance Documents
Continuing the current federal shift away from reputation risk in the bank supervisory space, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System jointly announced on June 2, 2026 that they had removed all references to “reputational risk” in an array of interagency documents, including guidance on lending, risk management, and cyber security. This move arrives at the same time that the OCC and FDIC’s joint final rule removing reputation risk from their supervisory programs, which was published in the Federal Register on April 10, 2026, goes into effect. The agencies’ statements emphasize that these revisions are meant to complement the new supervisory policy and that the removal of reputation risk from these documents is intended to help focus supervisory decisions on “material financial risks.”
Reputation risk refers to the practice of making decisions on internal banking policy, including whether to permit a person to become a customer of the bank or whether to close pre-existing bank accounts, based in part on the potential for negative publicity or risk to public trust in the bank. It has been heavily criticized by the current administration as an alleged tool by which banks can “debank” individuals for their conservative political affiliation. In August of 2025, President Trump issued an Executive Order entitled “Guaranteeing Fair Banking for All Americans,” which directed federal agencies to remove statements encouraging the consideration of reputation risk from all guidance documents and supervisory policies.
The June 2 revisions are the latest changes stemming from this executive order and reaffirm the current administration’s strong commitment to removing subjective criteria from bank supervision. Although neither the final rule nor the newly revised interagency documents directly proscribe financial institutions from considering reputation risk, the removal of reputation risk as a positive factor in supervisory review, and criticism of reputation risk by the agencies in their recent statements, should make financial institutions think carefully about whether and how to continue or amend legacy account closure and risk policies that take reputation risk into account.
The post FDIC, OCC, and Federal Reserve Announce Removal of Reputation Risk From Internal Guidance Documents appeared first on Consumer Finance Insights (CFI).