Federal banking regulators currently evaluate banks partly based on "reputational risk" — a vague concept that critics say has been used to pressure banks into cutting off legal businesses the government disfavors. Under this bill, agencies like the FDIC, OCC, and Federal Reserve would be banned from using reputational risk in bank supervision, examinations, or enforcement actions. Any existing rules or guidance referencing reputational risk would be scrapped within 90 days. The goal is to prevent regulators from informally picking winners and losers among lawful industries by leaning on banks behind the scenes.
Corporate Benefits
- Reputational-risk consideration in bank supervision — FDIC, OCC, Federal Reserve, NCUA, and CFPB barred from using reputational risk in examinations or enforcement
- Access to banking services for legal-but-disfavored industries — Removal of reputational-risk reviews intended to prevent informal pressure on banks to drop legal customers
Transparency & Accountability
- Supervisory tool — Reputational-risk component eliminated from federal banking-agency guidance, rules, examination manuals within 90 days
- Implementation reporting — Each agency must report to Congress within 180 days confirming changes made to internal policies
Congressional Summary
Financial Integrity and Regulation Management Act or the FIRM ActThis bill prohibits the consideration of reputational risk by federal banking agencies when regulating, examining, or supervising a depository institution or credit union. The bill defines reputational risk as the potential for negative publicity or public attention to decrease confidence in the institution, lead to litigation, reduce revenues, or result in other adverse impacts to the institution. Agencies must report on the implementation of this bill.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-04-08
- Date Added
- 2026-04-14
- Source
- Congress.gov →
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