Summary of Prohibition on Use of Reputation Risk or Other Supervisory Tools to Encourage or Compel Banking Organizations to Engage in Politicized or Unlawful Discrimination
Updated 03/23/2026
The Board of Governors of the Federal Reserve System has issued a proposed rule to codify the removal of “reputation risk” from its supervisory framework. Institutions affected include those supervised by the Board, such as bank holding companies, savings and loan holding companies, state member banks, combined U.S. operations of foreign banking organizations, and their subsidiaries. The proposed rule suggests amending 12 CFR Part 262 by adding § 262.9 to prohibit the Board from using reputation risk in examination programs or supervisory materials.
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