On April 7, 2026, the OCC and the FDIC jointly issued a final rule that codifies the elimination of reputation risk from their supervisory programs. The agencies believe that banking regulators’ use of the concept of reputation risk as a basis for supervisory criticisms increases subjectivity in banking supervision without adding material value from a safety and soundness perspective.
The final rule:
Prohibits the agencies from criticizing or taking adverse action against an institution on the basis of reputation risk;
Prohibits the agencies from requiring, instructing, or encouraging an institution to close an account, to refrain from providing an account, product, or service, or to modify or terminate any product or service on the basis of a person 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; and
Forbids the agencies from taking any supervisory action or other adverse action against an institution, a group of institutions, or the institution-affiliated parties of any institution that is designed to punish or discourage an individual or group from engaging in any lawful political, social, cultural, or religious activities, constitutionally protected speech, or, for political reasons, lawful business activities that the agencies or its personnel disagree with or disfavor.
The final rule will become effective 60 days after the date of publication in the Federal Register.
The FDIC and OCC’s joint press release can be found here.
The final rule can be found here.