The Federal Deposit Insurance Corporation has published a proposal to codify in regulation its earlier decision to stop treating “reputation risk” as a standalone factor in bank supervision, positioning traditional risk channels such as credit, liquidity, and market risk as the relevant safety and soundness lenses. The proposal would prohibit the FDIC from criticizing or taking adverse action against a supervised institution on the basis of reputation risk, and would also bar the agency from requiring, instructing, or encouraging an institution to close accounts or refrain from providing services based on political, social, cultural, or religious views. It would not impose new requirements or obligations on supervised institutions. In parallel, references to reputation risk are being removed from FDIC guidance, policy documents, and examination manuals, and the agency expects to work with other federal banking agencies to remove references from interagency materials. The FDIC is inviting comments on the proposal.
Federal Deposit Insurance Corporation 2025-10-17
Federal Deposit Insurance Corporation proposes rule to bar supervisory use of reputation risk and prevent pressure to close accounts based on views
The FDIC proposes codifying its decision to exclude "reputation risk" as a standalone factor in bank supervision, focusing on credit, liquidity, and market risk. This would prevent adverse actions based on reputation risk and influence on service decisions due to political or social views. References to reputation risk will be removed from FDIC materials, with plans to collaborate with other federal agencies for similar updates.