FDIC and OCC Finalize Rule Removing Reputational Risk from Bank Supervision

Detected April 7th, 2026

Summary

The FDIC and OCC have finalized a rule eliminating reputational risk as a standalone category from their bank supervision frameworks. The change removes what had been a distinct supervisory consideration related to an institution's public image and community standing. This modification affects how federal banking regulators evaluate and assess bank risk profiles during examinations.

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What changed

The FDIC and OCC have completed action on a final rule that removes reputational risk from the Uniform Financial Institutions Rating System (UFIRS), commonly known as the CAMELS rating system for banks. This supervisory change eliminates what had been a separate factor regulators considered when assigning composite and component ratings to financial institutions. The rule finalizes a proposal first circulated in 2023 and represents a significant shift in supervisory philosophy regarding how bank Examiners assess institutional risk.

For affected banks and thrifts, this change may reduce the scope of certain examination findings and could alter how regulatory feedback is delivered during the supervisory process. Institutions that have historically faced heightened scrutiny regarding community standing, media coverage, or stakeholder concerns should prepare for a potentially narrower supervisory lens on these factors. Compliance teams should review any internal policies that specifically address reputational risk management in the context of regulatory expectations.

What to do next

Monitor for updates from FDIC and OCC on implementation timelines
Review internal risk assessment frameworks for any reputational risk components that may need reclassification
Consult with compliance personnel regarding updated examination procedures

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FDIC, OCC finalize rule to remove reputational risk from supervision

April 7, 2026 Reading Time: 1 min read The FDIC and Office of the Comptroller of the Currency today finalized a joint rule to remove the use of reputational risk from their supervisory programs.

The rule codifies a change that the agencies’ leaders previously instructed supervisors to make. It comes amid a Trump administration push to weed out policies that allegedly encouraged regulators to discriminate against cryptocurrency and other industries.

The rule also prohibits the agencies from requiring or encouraging institutions to close customer accounts or take other actions because of a person or entity’s political, social, cultural, or religious views or beliefs.

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