On June 2, 2026, the Federal Reserve, FDIC, and OCC announced that they removed additional references to reputation risk from supervisory materials as part of an effort to clarify that supervision should remain focused on measurable financial and operational risks rather than a bank’s exposure to public criticism or adverse publicity.

This change may reduce regulatory uncertainty for banks by reinforcing that examiners will evaluate institutions based on established risk categories, such as credit, market, liquidity, operational, legal, and compliance risk, rather than perceived reputational exposure. While reputational considerations remain important from a business and strategic perspective, banks may experience clearer supervisory expectations and more consistent examination standards.

Institutions that previously elevated reputation risk as a standalone risk category may wish to review their internal reporting and risk frameworks to align with the agencies’ clarified supervisory focus, while continuing to monitor reputational impacts.

Suggestions for our community banks may include:

• Continuing to consider reputational impacts as a business issue, but avoid treating reputation risk as a standalone supervisory risk category.
• Review policies, risk assessments, and governance materials for references to reputation risk and, where appropriate, tie those concepts to the underlying legal, compliance, operational, liquidity, or strategic risks.
• Consider whether board and management reporting should be updated to reflect this shift in supervisory terminology while still capturing potential impacts on business and customers.

This update builds on the agencies’ earlier actions to end the use of reputation risk in supervision, including the Federal Reserve’s June 2025 announcement that reputational risk would no longer be part of its examination programs and the agencies’ subsequent efforts to align supervisory materials accordingly. This latest step reflects a continued review of interagency guidance and related resources to remove remaining references that could imply supervisory criticism based on reputational concerns rather than traditional risk categories such as credit, market, liquidity, operational, legal, and compliance risk.

The full press release can be found here.

CCI suggests sharing this update with your Compliance, Legal, and Risk Management teams. Please contact CCI with any questions via inquiries@completecompli.com.