Bank Supervision: Removing References to Reputation Risk

March 20, 2025 / Source: OCC

Summary

The Office of the Comptroller of the Currency (OCC) has commenced removing references to banks’¹ reputation risk from its Comptroller’s Handbook booklets and guidance issuances. Concurrently, the OCC has instructed its examiners that they should no longer examine for reputation risk.

Note for Community Banks

The OCC’s discontinuation of examining for reputation risk applies to community banks.

Highlights

The OCC has never used reputation risk as a catch-all justification for supervisory action. Rather, the OCC has focused primarily on the risks to a bank’s current or projected financial condition and resilience arising from negative public opinion. Nonetheless, the OCC believes removing references to reputation risk will improve transparency and confidence in the supervisory process. For handbooks and guidance issuances issued jointly with other regulators, the OCC will work with those regulators to expeditiously remove references to banks’ reputation risk.

The OCC expects banks to engage in sound risk management practices, operate in a safe and sound manner, and comply with applicable laws and regulations.