Banking Regulators Drop "Reputational Risk" from Joint Guidance Documents

June 8, 2026 - 22:48

The Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) have jointly revised several interagency documents, removing all references to "reputational risk." The change applies to a range of supervisory guidance and examination materials used by the three agencies.

Reputational risk has long been a factor in how banks are evaluated, referring to the potential for negative public opinion to harm a financial institution's standing or viability. Critics have argued that the term was used too broadly, sometimes to pressure banks into cutting ties with certain industries or customer groups, such as firearms manufacturers or energy companies.

The agencies did not announce a new policy or regulation. Instead, they quietly updated existing documents to strike the term. The move follows a broader trend among federal financial regulators to narrow the scope of subjective risk factors in supervision. Some lawmakers and banking trade groups had pushed for the change, saying reputational risk assessments were vague and could lead to regulatory overreach.

Banking industry representatives welcomed the update. They said it removes a source of uncertainty for lenders who worried about being penalized for serving legal but controversial businesses. Consumer advocacy groups, however, expressed concern that the change could weaken oversight of banks' social and ethical responsibilities.

The agencies confirmed the updates are effective immediately. They said the revisions do not alter any existing safety and soundness standards or consumer protection rules. Further changes to other interagency documents may follow as the review continues.