OCC & FDIC Ban 'Reputation Risk' as a Basis for Supervisory or Account Actions

The OCC and FDIC have finalized a rule prohibiting themselves from using 'reputation risk' as a grounds for supervisory criticism or adverse action, and from pressuring banks to close or deny accounts based on a customer's lawful business activities, political views, or constitutionally protected speech. This is directly relevant to crypto and fintech firms that have experienced debanking or account closures, as it limits regulators' ability to push banks away from serving these industries on reputational grounds alone. Banks serving crypto clients should document this rule as support for maintaining those relationships.