On June 2, the FDIC, OCC, and the Federal Reserve Board announced updates to a series of interagency supervisory documents to remove references to reputation risk. The updates apply across multiple areas of bank supervision and are intended to further align supervisory materials with the agencies’ recent changes to their supervisory frameworks.
The changes follow the agencies April 2026 final rule eliminating reputation risk from the supervisory framework and are intended to ensure supervisory decisions are based on material financial risks rather than reputational considerations. According to the agencies, references to reputation risk could be misused to restrict access to financial services based on lawful activities, political beliefs, religious beliefs, speech, or other constitutionally protected conduct.
The updated documents address several areas in supervision, including lending, home equity lending, customer identification programs, elder financial exploitation, cybersecurity, operational resilience, and other risk management topics. The agencies also indicated that they will continue reviewing supervisory materials and may update additional documents in the future.
Putting It Into Practice: The announcement represents the latest steps in the federal banking agencies broader effort to remove reputation risk from supervision. Earlier this year, the FDIC and OCC finalized rules formally eliminating reputation risk from their supervisory programs (previously discussed here). The agencies have since undertaken a broader review of supervisory guidance and examination materials. Banks and other regulated entities should monitor additional supervisory updates as federal regulators continue refining their approach to risk management and bank supervision.
