On April 7, 2026, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) jointly issued a final rule that codifies the elimination of “reputation risk” from their supervisory frameworks.
The Core of the Change
The rule formally defines “reputation risk” and explicitly prohibits the OCC and FDIC from:
- Criticizing or taking any adverse regulatory action against a financial institution based on reputation risk.
- Requiring, instructing, or encouraging an institution to close customer accounts (or take other actions) based on 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 carry reputation risk.
The agencies note that this change directly addresses concerns raised in Executive Order 14331, Guaranteeing Fair Banking for All Americans, regarding the potential use of reputation risk as a pretext for restricting access to financial services for law-abiding individuals and businesses.
Key Implications for Banks
- Protection Against Politically Motivated Account Closures — Examiners can no longer pressure institutions to terminate relationships based on customers’ protected speech, beliefs, or lawful (though perhaps controversial) activities.
- Safeguarding Lawful but Politically Disfavored Businesses — Banks gain greater confidence to serve legal industries without fear of regulatory repercussions tied to subjective reputation concerns.
- Reduced Pretextual Scrutiny — The rule limits the ability of examiners to use reputation risk informally or formally as a basis for criticism during examinations.
What This Means for Your Next Examination
During upcoming supervisory reviews, OCC- and FDIC-supervised institutions should see examiners barred from leveraging perceived reputation risk to penalize decisions or dictate customer relationships. The rule applies to institutions under the supervisory authority of the OCC (national banks and federal branches) and the FDIC (state-chartered banks, including those not members of the Federal Reserve).
Important Distinction: This rule governs regulatory actions by the agencies. It does not dictate your institution’s internal risk management, underwriting standards, or compliance with fair lending and other consumer protection laws. Banks should continue to maintain robust, defensible internal policies for customer due diligence, risk assessment, and account management that comply with all applicable regulations.
Looking Ahead
This final rule provides banks with clearer boundaries and enhanced protection when serving a diverse customer base. By removing this subjective element from supervision, regulators are promoting a more principles-based, objective approach focused on financial safety and soundness.
Institutions should review their internal policies, training materials, and examination preparation processes in light of this change. Compliance teams may also want to monitor related updates, such as the removal of reputation risk references from various interagency guidance documents.
For the full text, refer to the official announcement and Federal Register notice.
