Prohibition on Use of Reputation Risk by Regulators

The Providing Accountability Through Transparency Act of 2023 requires that a notice of proposed rulemaking include the internet address of a summary of not more than 100 words in length of a proposed rule, in plain language, that shall be posted on the internet website www.regulations.gov. The proposed regulation would amend the OCC’s and FDIC’s risk-based supervisory frameworks by removing the use of reputation risk. It prohibits the agencies from forcing an institution to refrain from contracting or doing business with an individual or entity or to terminate, modify, or initiate a contract or business relationship on the basis of reputation risk. The agencies also may not force an institution to terminate a contract or discontinue or modify a business relationship on the basis of an individual or entity’s political, social, cultural, or religious views or beliefs or involvement in lawful business activities. The proposal and the required summary can be found for the OCC at https://www.regulations.gov by searching for Docket ID OCC-2025-0142, https://occ.gov/topics/laws-and-regulations/occ-regulations/proposed-issuances/index-proposed-issuances.html, and for the FDIC at https://www.fdic.gov/resources/regulations/federal-register-publications/index.html#