This bill would stop Federal banking agencies from using "reputational risk" when supervising banks, credit unions, and other depository institutions. It defines reputational risk and says agencies must remove references to it from guidance, rules, examination manuals, or similar documents. The bill prohibits agencies from creating rules, conducting exams or data collection, issuing findings, basing ratings, or taking enforcement actions that rely on reputational risk. It also requires each agency to report to the Senate Banking Committee and the House Financial Services Committee within 180 days to confirm changes and describe internal policy updates.
If enacted, the bill would require banking regulators to stop considering negative publicity or public opinion about a firm when supervising depository institutions. The text says this change is intended to protect access to financial services for federally legal businesses and law-abiding citizens and to limit agency actions based on subjective publicity concerns. The law names that the term "Federal banking agency" includes the National Credit Union Administration and the Bureau of Consumer Financial Protection and otherwise uses the statutory definition in existing law.
No publicly available information.
The bill's sponsors and findings say the main goal of banking supervision should be safety and soundness. They argue reputational risk is not in statute, can be used for political reasons, and was used in the past to limit access to financial services (noting "Operation Choke Point" in 2018). The bill is presented as a way to remove subjective publicity concerns from supervision.
No publicly available information.