Agencies Issue Final Rule to Prohibit Use of Reputation Risk by Regulators

WASHINGTON–The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (the agencies) today jointly issued a final rule that codifies the elimination of reputation risk from their supervisory programs.

The rule defines “reputation risk” and prohibits the agencies from criticizing or taking adverse action against an institution on the basis of reputation risk. The rule also prohibits the agencies from requiring, instructing, or encouraging an institution to close customer accounts or take other actions 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.

This rule also responds to concerns expressed in Executive Order 14331, Guaranteeing Fair Banking for All Americans, that the use of reputation risk can be a pretext for restricting law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs or lawful business activities.

Related Link

• Federal Register (PDF)