A long-anticipated notice of proposed rulemaking regarding prohibiting regulators’ use of “reputation risk” is one of two discussion items slated for the Oct. 7 open meeting of the Federal Deposit Insurance Corp. (FDIC) Board meeting.
The second item: a notice of proposed rulemaking regarding unsafe or unsound practices, “matters requiring attention.”
Both are expected to affect the FDIC’s examination and supervision of the banks it supervises, with the “reputation risk” item likely putting the agency in line with actions already announced this year by the Federal Reserve Board and Office of the Comptroller of the Currency (OCC) – and as anticipated in April in remarks by FDIC Chairman Travis Hill.
Hill said then that his agency was preparing a rulemaking related to reputational risk that would prohibit FDIC supervisors from criticizing or taking adverse action against institutions based on reputational risk, “and requiring, instructing, or encouraging institutions to close, modify, or refrain from offering accounts on the basis of political, social, cultural, or religious views.”
The National Credit Union Administration (NCUA) recently also announced it was no longer including discussion generally of reputation risk during examinations and other supervisory discussions with credit unions.
The Oct. 7 FDIC Board meeting will be viewable by the public via webcast, the agency said. It’s set for 10 a.m. eastern.
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