Federal Reserve Board – Agencies remove additional references to reputation risk

The federal bank regulatory agencies today jointly updated certain interagency documents to remove references to reputational risk.

The agencies are taking this action to complement their previous actions that ended the use of reputational risk in oversight. As the agencies have previously noted, supervisors may misuse reputational risk as a basis to encourage or pressure a bank to restrict access to financial services by legal individuals and businesses because of their constitutionally protected political or religious beliefs, speech, conduct, or lawful business activities. These updates help ensure that supervisory decisions are based on significant financial risks, as well as increase clarity and facilitate greater accuracy in supervisory decision-making. Updates to the interagency documents are limited to removing references to reputational risk.

Agencies continue to review their oversight materials and may update additional documents as appropriate.