The U.S. Senate Committee on Banking, Housing and Urban Affairs reported that federal banking regulators are taking steps to remove “reputational risk” as a basis for supervisory criticism after the committee advanced Chairman Tim Scott’s Financial Integrity and Regulation Management (FIRM) Act. The Office of the Comptroller of the Currency announced it will no longer examine its regulated institutions for reputational risk and is removing related references from its Comptroller’s Handbook booklets and guidance issuances, while the Federal Deposit Insurance Corporation said it is working to eliminate reputational risk in its supervision of financial institutions. The committee’s update pointed to support expressed by Treasury Secretary Scott Bessent at the March 20 Financial Stability Oversight Council meeting for banking agencies to remove reputational risk from supervision, and framed the legislative push as a response to “debanking” concerns involving federally legal businesses and law-abiding citizens. The release did not set out timelines for completion of the agencies’ supervisory documentation changes or for further congressional action on the FIRM Act.
U.S. Senate Committee on Banking, Housing and Urban Affairs 2025-03-28
U.S. Senate Committee on Banking, Housing and Urban Affairs advances FIRM Act as OCC and FDIC move to drop reputational risk from supervision
The U.S. Senate Committee on Banking, Housing and Urban Affairs announced that federal banking regulators are eliminating "reputational risk" as a basis for supervisory criticism, following the advancement of the Financial Integrity and Regulation Management (FIRM) Act. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation are removing references to reputational risk from their practices. Treasury Secretary Scott Bessent supported this move at the Financial Stability Oversight Council meeting, citing concerns over "debanking" of federally legal businesses and citizens.