Final Rule on Reputation Risk & Debanking

Reputation risk was a big topic in 2025 with all of the regulatory agencies (FDIC, OCC, Federal Reserve, and NCUA) coming out and stating, at one point or another, that they would no longer examine institutions for reputation risk.

To make this official, the FDIC and OCC, recently adopted a Final Rule that:

1. …prohibits the agencies from criticizing or taking adverse action against an institution on the basis of reputation risk… and
2. …prohibits the agencies from requiring, instructing, or encouraging an institution to close an account, to refrain from providing an account, product, or service, or to modify or terminate any product or service on the basis of a person or entity’s political, social, cultural, or religious views or beliefs, constitutionally protected speech, or solely on the basis of politically disfavored but lawful business activities perceived to present reputation risk.

The Final Rule takes effect on June 9, 2026.

The Federal Reserve and NCUA have both issued proposals regarding the prohibition on using reputation risk but there’s nothing final at this time.

We discussed reputation risk in our Management Minute feature in the August 2025 issue of our magazine, Banking on BCC. There, we shared our belief that reputation risk has not and will not ever go away completely. Just because institutions won’t be examined on reputation risk, doesn’t mean it shouldn’t still be a key driver of an institution’s business practices. An examiner’s perception of an institution’s reputation likely has little impact on the general public. In other words, if you screw up bad enough you could still suffer reputational consequences from your customers and/or the public.

Published 2026/04/21