Overview
- The FDIC, OCC and Federal Reserve updated interagency supervisory documents on June 2 to remove references to “reputation risk,” formalizing the agencies’ effort to stop using reputational judgments in examinations.
- The revisions apply across a wide range of guidance, including lending, customer identification, elder financial exploitation, cybersecurity, operational resilience and other risk management material.
- In April the OCC and FDIC finalized a rule that removed reputation risk as a standalone supervisory category and barred adverse supervisory action based solely on reputational concerns, including pressuring banks to close accounts or deny services.
- The agencies say the edits are narrow technical changes that do not loosen safety-and-soundness duties and that examiners should ground findings in material financial risk and legal compliance rather than subjective reputational judgments.
- The Federal Reserve still must finalize its proposed rule to align rulemaking with the OCC and FDIC, and banks and compliance officers should expect more guidance updates and adjust exam preparation to document material risk and legal bases for decisions.