Prohibition on Use of Reputation Risk or Other Supervisory Tools ... (proposed rule), 91 FR 9499, FR Doc 2026-03818
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules 9499
Energy. This administrative process in • Other Means: publiccomments@ conduct, or based on involvement by
no way alters the legal effect of this frb.gov. You must include the docket the individual or business in politically
document upon publication in the number in thesubject line of the disfavored but lawful business activities
Federal Register. message. perceived to present reputation risk.
Signed in Washington, DC, on February 24, Comments received are subject to The decision regarding whether or not
2026. public disclosure. In general, comments to make a loan or to open, close, or
Treena V. Garrett, received will be made available on the maintain an account, provide any other
Board’s website at https:// financial product or service, or modify
Federal Register Liaison Officer, U.S.
Department of Energy. www.federalreserve.gov/apps/ the terms of any financial product or
proposals/ without change and will not service rests with the banking
[FR Doc. 2026–03866 Filed 2–25–26; 8:45 am]
be modified to remove personal or organization, acting in accordance with
BILLING CODE 6450–01–P
business information including applicable law.
confidential, contact, or other In addition to the Board’s policy, the
identifying information. Comments Board announced in June 2025 that
FEDERAL RESERVE SYSTEM should not include any information reputation risk will no longer be a
such as confidential information that component of examination programs in
12 CFR Part 262 its supervision of banks, and that the
would not be appropriate for public
[Docket No. R–1884] disclosure. Public comments may also Board will train examiners to help
be viewed electronically or in person in ensure this change is implemented
RIN 7100–AH17 consistently across Board-supervised
Room M–4365A, 2001 C St. NW,
Washington, DC 20551, between 9 a.m. banking organizations.1 The Board is
Prohibition on Use of Reputation Risk
and 5 p.m. during Federal business eliminating references to reputation and
or Other Supervisory Tools To
weekdays. reputation risk in its supervisory
Encourage or Compel Banking
materials, including examination
Organizations To Engage in Politicized FOR FURTHER INFORMATION CONTACT:
manuals.2 The Federal Deposit
or Unlawful Discrimination Anna Lee Hewko, Associate Director, Insurance Corporation (FDIC), the Office
(202) 530–6260; Mehdi Beyhaghi, of the Comptroller of the Currency
AGENCY: Board of Governors of the
Principal Economist, (202) 941–8706; (OCC), and the National Credit Union
Federal Reserve System.
Devyn Jeffereis, Lead Financial Administration (NCUA) also have
ACTION: Notice of proposed rulemaking. Institution Policy Analyst, (202) 452– announced their intention to eliminate
2729, Division of Supervision and references to reputation risk in their
SUMMARY: The Board of Governors of the
Regulation; or Asad Kudiya, Associate examination manuals and other
Federal Reserve System (Board) is
General Counsel, (202) 475–6358; supervisory materials.3 These agencies
inviting public comment on a notice of
Alyssa O’Connor, Senior Counsel, (202) recently requested comment on
proposed rulemaking (proposal or
577–5476; Harley Moyer, Attorney, proposals to codify the removal of
proposed rule) that would codify the
(240) 749–9069, Legal Division, Board of reputation risk from their supervisory
removal of reputation risk from the
Governors of the Federal Reserve programs.4
Board’s supervisory programs. The
System, 20th and C Streets NW, The Board has defined reputation risk
proposal would prohibit the Board from
Washington, DC 20551. For the hearing as ‘‘the potential that negative publicity
encouraging or compelling Board-
impaired only, Telecommunication regarding an institution’s business
supervised banking organizations to
Device for the Deaf (TDD), (202) 263– practices, whether true or not, will
deny or condition the provision of
4869. cause a decline in the customer base,
banking or other financial products or
services to an individual or business SUPPLEMENTARY INFORMATION: costly litigation, or revenue
based on their constitutionally protected reductions.’’ 5 Reputation risk increased
Table of Contents in prevalence as a supervisory concept
political or religious beliefs,
associations, speech, or conduct, or I. Introduction and Objectives of the Proposal in the 1990s and thereafter; the concept
based on involvement by the individual II. Overview of the Proposal generally was not used in the Board’s
or business in politically disfavored but III. Request for Comment
IV. Economic Analysis 1 Board, Press Release (June 23, 2025), https://
lawful business activities perceived to A. Baseline www.federalreserve.gov/newsevents/pressreleases/
present reputation risk. B. Economic Benefits and Costs bcreg20250623a.htm.
DATES: Comments must be received on V. Administrative Law Matters 2 Id.
or before April 27, 2026. A. Paperwork Reduction Act 3 See FDIC, Press Release (October 7, 2025),
ADDRESSES: You may submit comments,
B. Regulatory Flexibility Act https://www.fdic.gov/news/financial-institution-
C. Plain Language letters/2025/agencies-issue-proposal-prohibit-use-
identified by Docket No. R–1884 and D. Riegle Community Development and reputation-risk; OCC, News Release 2025–21
RIN 7100–AH17, by any of the following Regulatory Improvement Act of 1994 (March 20, 2025), https://www.occ.gov/news-
methods: issuances/news-releases/2025/nr-occ-2025-21.html
E. Providing Accountability Through and OCC Bulletin 2025–4 (March 20, 2025), https://
• Agency Website: https:// Transparency Act of 2023 www.occ.gov/news-issuances/bulletins/2025/
www.federalreserve.gov/apps/ bulletin-2025-4.html; NCUA, Press Release
proposals/. Follow the instructionsfor I. Introduction and Objectives of the (September 25, 2025), https://ncua.gov/newsroom/
Proposal press-release/2025/ncua-eliminates-use-
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submitting comments, including
reputational-risk.
attachments. Preferred Method. It is the Board’s policy not to 4 90 FR 48825 (October 30, 2025); 90 FR 48409
• Mail: Benjamin W. McDonough, encourage or compel Board-supervised (October 21, 2025).
Deputy Secretary, Board of Governors of banking organizations to deny or 5 Attachment B to SR Letter 95–51, ‘‘Rating the
the Federal Reserve System, 20th Street condition the provision of banking or Adequacy of Risk Management Processes and
and Constitution Avenue NW, other financial products or services to Internal Controls at State Member Banks and Bank
Holding Companies’’ (November 14, 1995) (SR 95–
Washington, DC 20551. an individual or business based on their 51). In connection with the Board’s June 23, 2025,
• Hand Delivery/Courier: Same as constitutionally protected political or press release, this attachment was revised to remove
mailing address. religious beliefs, associations, speech, or the reference to reputation risk.
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9500 Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules
supervisory programs before that time.6 decisions of supervisory staff are not based on involvement by the individual
In 1995, the Board published guidance based on reputation risk and align with or business in politically disfavored but
that established guidelines for the rating the Board’s broader policy. lawful business activities perceived to
of risk management at state member Furthermore, the proposal would reflect present reputation risk.
banks and bank holding companies.7 experience that reputation risk can be The definition of ‘‘banking
The guidelines listed six risk channels, difficult to quantify and communicate, organization,’’ for purposes of the
one of which was reputation risk.8 In making it challenging for firms to proposal, would be a bank holding
subsequent years, reputation risk was remedy identified concerns. Therefore, company, as it is defined at 12 CFR
included in other supervisory materials. this proposal would increase 225.2(c); a savings and loan holding
For example, in the case of the Board, supervisory clarity through the company, as it is defined at 12 CFR
this included guidance related to risk- codification of the removal of reputation 238.2(m); a state member bank, as it is
focused safety and soundness risk and would facilitate greater defined at 12 CFR 208.2(g); and the
examinations and inspections and precision in supervisory decision combined U.S. operations of a foreign
consumer compliance risk in bank making. It also would support the banking organization, as it is defined at
holding companies.9 Over time, Board’s supervisory focus on core 12 CFR 252.2 and 12 CFR 211.21(o). The
concerns have arisen that reputation financial risks. Procedurally, issuing combined U.S. operations of a foreign
risk and other similar supervisory tools this proposal for notice and comment banking organization include the U.S.
have been misused. A recent Executive allows external stakeholders to provide branches and agencies of the foreign
Order raised concerns regarding their views on this issue. banking organization and all U.S.
debanking based on political or The proposal would not inhibit the subsidiaries of the foreign banking
religious beliefs or lawful business efficacy of the Board’s supervision and organization (such as a U.S.
activities.10 regulation function moving forward. intermediate holding company).
The Board is empowered to conduct Safety and soundness concerns that ‘‘Banking organization’’ would also
supervision of various types of banking motivated the Board’s prior inclusion of include the direct and indirect
organizations.11 It is also empowered to reputation risk in supervision are subsidiaries of a bank holding company,
make rules ‘‘to enable it to administer adequately addressed through other savings and loan holding company, and
and carry out’’ its supervisory existing risk types. The Board continues state member bank.
programs.12 Pursuant to such authority, to supervise banking organizations’ The proposed rule would state that
the Board is proposing to codify the management of these other risk the Board shall not use reputation risk
removal of reputation risk from the channels, such as credit risk, market as a component of its examination
Board’s supervisory programs and to risk, liquidity risk, operational risk, and programs or in materials used for the
prohibit the Board from encouraging or legal risk,13 with an emphasis on core, supervision of banking organizations.
compelling Board-supervised banking material financial risks. Additionally, Materials used for the supervision of
organizations to deny or condition the the proposal would not alter the Board’s banking organizations include
provision of banking or other financial expectation that Board-supervised examination manuals, guidance
products or services to an individual or banking organizations maintain strong documents, and examiner training
business based on their constitutionally risk management to promote safety and materials. The definition of ‘‘reputation
protected political or religious beliefs, soundness and compliance with risk’’ would be the potential that
associations, speech, or conduct, or applicable laws and regulations.14 negative publicity regarding a banking
based on involvement by the individual Furthermore, the proposal is not organization’s business practices,
or business in politically disfavored but intended to impact the ability of whether true or not, will cause a decline
lawful business activities perceived to banking organizations to manage their in the banking organization’s customer
present reputation risk. businesses and make independent base, costly litigation, or revenue
The proposal aims to achieve several decisions regarding their customers. The reductions, which is the definition
objectives. First, by establishing a decision regarding whether or not to previously used by the Board in SR 95–
binding regulation, the Board would make a loan or to open, close, or 51.
further ensure that the actions and maintain an account, provide any other The proposal would also include a
financial product or service, or modify general statement of the Board’s policy.
6 The concept of reputation risk as a potential
the terms of any financial product or Specifically, it would state that the
threat to banking organizations and other financial
service rests with the banking Board shall not encourage or compel
institutions predates the 1990s, however. See I. banking organizations to deny or
Walter, ‘‘Reputational Risk in Large International organization, acting in accordance with
Banks,’’ working paper based on a presentation at applicable law. condition the provision of banking or
the Federal Reserve Bank of Chicago, Eighteenth other financial products or services to
Annual International Banking Conference: The II. Overview of the Proposal an individual or business based on their
Future of Large, Internationally Active Banks constitutionally protected political or
(2015); see also J. Hill, Regulating Bank Reputation
This proposal would codify the
Risk, 54 Ga. L. Rev. 523 (2019). removal of reputation risk from the religious beliefs, associations, speech, or
7 See Attachment B to SR 95–51. Board’s supervisory programs. The conduct, or based on involvement by
8 Id. proposal also would explicitly prohibit the individual or business in politically
9 See SR Letter 96–14, ‘‘Risk-focused Safety and
the Board from encouraging or disfavored but lawful business activities
Soundness Examinations and Inspections’’ (May 24, compelling Board-supervised banking perceived to present reputation risk.
1996); SR Letter 03–22/CA Letter 03–15,
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organizations to deny or condition the Additionally, the statement would
‘‘Framework for Assessing Consumer Compliance
Risk at Bank Holding Companies’’ (December 23, provision of banking or other financial indicate that the decision regarding
2003). These letters have since been revised to products or services to an individual or whether or not to make a loan or to
remove references to reputation risk. business based on their constitutionally open, close, or maintain an account,
10 E.O. 14331, 90 FR 38925 (August 12, 2025).
protected political or religious beliefs, provide any other financial product or
11 See, e.g., 12 U.S.C. 248(a), 325, 326, 483, 602,
associations, speech, or conduct, or service, or modify the terms of any
625, 1467a(b)(2)(A), (4)(A), 1820(d), 1844(c)(1)(A),
(2)(A), 3105(c)(1)(A), (2), 3106(a), 5365(b)(2). financial product or service rests with
12 12 U.S.C. 1844(b). See also 12 U.S.C. 248(i), 13 See, e.g., Attachment B to SR 95–51. the banking organization, acting in
611a, 1467a(g)(1), 3108(a). 14 See, e.g., id. accordance with applicable law. The
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Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules 9501
proposal would not prohibit criticism, prohibition on the use of reputation risk some of these benefits and costs may
supervisory feedback, or other actions to clear; why or why not? How could have been realized.
address other risk channels related to ‘‘examination programs’’ or ‘‘materials Prior to the Board’s June 2025
safety and soundness or compliance used for the supervision of banking announcement, the word ‘‘reputation’’
with applicable laws and regulations. organizations’’ be defined further? had appeared in a portion of total
Finally, the proposal would make Question 5: What, if any, additional Matters Requiring Attention (MRAs) and
clear that the Board’s authority to provisions of applicable law should the Matters Requiring Immediate Attention
implement, administer, and enforce the proposal’s rule of construction include (MRIAs) issued by the Federal Reserve
provisions of applicable law would not in its list? Which, if any, provisions of System. When broken down by
be restricted. Applicable law would applicable law should be removed? Why institution type, the word ‘‘reputation’’
include, but not be limited to, the Bank would any such addition or removal be was mentioned in approximately 4.6
Secrecy Act; sanctions programs appropriate? percent of MRAs/MRIAs for bank
administered by the Office of Foreign Question 6: What, if any, unintended holding companies and savings and
Assets Control; the Federal Reserve Act; consequences for the Board or Board- loan holding companies, 1.5 percent for
the Bank Holding Company Act of 1956; supervised banking organizations may state member banks, and 2.5 percent for
the Home Owners’ Loan Act; the Change result from the proposal, including FBOs operating in the United States
in Bank Control Act; the International codifying the removal of reputation risk over the past ten years. To assess
Banking Act of 1978; the Bank Merger from the Board’s supervisory programs historical impacts, the Board conducted
Act; the International Lending and materials? an analysis using confidential
Supervision Act of 1983; the Federal Question 7: What, if any, alternatives examination data from a ten-year period
Deposit Insurance Act; the Equal Credit are there to the proposal that would through March 2025. The Board
Opportunity Act; and the Fair Housing better achieve the Board’s objectives? identified prior instances by searching
Act. The proposed rule would state that Question 8: What, if any, references to MRAs and MRIAs for the word
the Board would implement, concepts related to reputation risk ‘‘reputation,’’ then calculated the
administer, and enforce applicable law should the Board consider revising in its percentage of examinations containing
consistent with the proposal. supervisory materials or regulations? at least one such supervisory finding for
If finalized, the Board would provide Question 9: Please describe any costs, each year. The Board then summed each
training on all aspects of this proposal benefits, or other effects of the proposal yearly percentage for each institution
for supervisory staff to ensure that the Board has not identified. type, which resulted in a total
compliance with the proposal. percentage over the ten-year period.
Consistent with standard practice, the IV. Economic Analysis These percentages include MRAs and
Board also would ensure that there are A. Baseline MRIAs in which reputation risk was
internal management controls to oversee only one of multiple risk concepts or
compliance with the proposal. The Federal Reserve supervises bank supervisory issues raised. This
holding companies, savings and loan historical data helps to demonstrate the
III. Request for Comment holding companies, state member banks, extent to which reputation risk
Question 1: What other references to and foreign banking organizations considerations may have influenced
reputation risk in the Board’s (FBOs) operating in the United States. supervisory outcomes under the
regulations or its supervisory programs These entities vary in asset size and previous framework.
should be addressed by the proposal? complexity.15 The previous supervisory
How should the Board address those framework incorporated reputation risk B. Economic Benefits and Costs
references? as one component of a broader risk- The prohibition on using reputation
Question 2: Is the proposal’s assessment framework applied across risk in supervision is expected to
definition of ‘‘reputation risk’’ these entities. generate several economic benefits.
appropriate; why or why not? What are As previously mentioned, the Board First, Board-supervised banking
the advantages and disadvantages of the announced in June 2025 that reputation organizations would likely experience
definition? How should the definition be risk will no longer be a component of reduced regulatory burden through
broadened or narrowed? What different examination programs in its supervision streamlined supervisory processes. This
definition of reputation risk should the of banks. Since then, the Board has not effect becomes particularly significant
Board consider? used reputation risk in its examination when considering the cumulative
Question 3: What changes to the programs, and reputation risk is being impact across the portfolio of Board-
proposal’s definition of ‘‘banking removed from supervisory materials. As supervised banking organizations. The
organization’’ should the Board a result, the proposal’s benefits and proposal would have notable effects on
consider? Should the Board consider costs since June 2025 are expected to be small institutions. These institutions
including additional or fewer categories de minimis, as there has been no further would likely experience proportionally
of entities? For example, the Board change in policy since that time. The greater benefits from reduced
intends to include ‘‘permitted payment analysis below evaluates the benefits compliance burden, as smaller
stablecoin issuers,’’ as defined in 12 and costs of the proposed rule if the institutions typically face higher relative
U.S.C. 5901(23), as a banking Board had not announced the removal regulatory compliance costs.
organization after the Board completes of reputation risk from the Board’s Second, the proposal would increase
khammond on DSK9W7S144PROD with PROPOSALS
rulemakings required under 12 U.S.C. supervisory programs in June 2025. clarity and objectivity in the supervisory
5901 et seq. What are other Since the June 2025 announcement, process by focusing examinations on
considerations the Board should other risk categories, such as credit,
consider regarding permitted payment 15 For an overview of Federal Reserve supervised market, liquidity, and operational risk.
stablecoin issuers in the context of the organizations by portfolio, including the number of These risk categories are objective
rulemakings required under 12 U.S.C. institutions and total assets in each portfolio, see measures that result in greater
Board, Supervision and Regulation Report at 19
5901 et seq.? (December 2025) (Table 2), https://
consistency in the supervisory process.
Question 4: Is the proposal’s www.federalreserve.gov/publications/files/202512- This consistency would benefit the
regulatory text that would codify a supervision-and-regulation-report.pdf. diverse range of Board-supervised
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9502 Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules
banking organizations and reduce to, an information collection unless it impact of the proposed rule on small
regulatory uncertainty. displays a valid Office of Management entities.20
Third, removing reputation risk from and Budget (OMB) control number. The The Board has considered the
supervisory considerations could Board reviewed the proposal under the potential impact of the proposal on
expand market access opportunities for authority delegated to the Board by the small entities in accordance with the
Board-supervised banking OMB and determined that it contains no RFA. Based on its analysis and for the
organizations. These entities may be collections of information under the reasons stated below, the Board believes
able to maintain or establish profitable PRA.17 Accordingly, there is no that this proposal will not have a
relationships that may have been paperwork burden associated with the significant economic impact on a
previously discouraged due to rule. substantial number of small entities.
reputation risk concerns. This could Nevertheless, the Board is publishing
B. Regulatory Flexibility Act and inviting comment on this initial
economically benefit affected
institutions, with a potential notable The Board is providing an initial regulatory flexibility analysis. As
aggregate impact across the large regulatory flexibility analysis with discussed in detail above, the proposal
number of Board-supervised banking respect to this proposed rule. The would codify the removal of reputation
organizations. Regulatory Flexibility Act (RFA) 18 risk from the Board’s supervisory
Finally, the change would allow for requires an agency to consider whether programs. Furthermore, the proposal
more efficient resource allocation the rules it proposes will have a would explicitly prohibit the Board
within the Federal Reserve System’s significant economic impact on a from encouraging or compelling Board-
supervisory function. Examiners could substantial number of small entities.19 supervised banking organizations to
redirect examination resources toward In connection with a proposed rule, the deny or condition the provision of
other risk types, enabling more effective RFA requires an agency to prepare and banking or other financial products or
supervision across the diverse portfolio invite public comment on an initial services to an individual or business
of institutions under Federal Reserve regulatory flexibility analysis describing based on their constitutionally protected
System oversight. the impact of the rule on small entities, political or religious beliefs,
Conversely, the proposed prohibition unless the agency certifies that the associations, speech, or conduct, or
on using reputation risk in supervision proposed rule, if promulgated, would based on involvement by the individual
is not without costs. Specifically, the not have a significant economic impact or business in politically disfavored but
proposal would likely incur transitional on a substantial number of small lawful business activities perceived to
implementation costs, including entities. An initial regulatory flexibility present reputation risk.
revising examination manuals, analysis must contain: (1) a description As discussed in section I of this
retraining examiners, and updating of the reasons why action by the agency SUPPLEMENTARY INFORMATION, the Board
supervisory guidance. Staff resources is being considered; (2) a succinct is empowered to conduct supervision of
would be required, reflecting the large statement of the objectives of, and legal various types of banking
number of affected institutions. These basis for, the proposed rule; (3) a organizations.21 It is also empowered to
resources would also be needed to description of, and, where feasible, an make rules ‘‘to enable it to administer
implement the new approach estimate of the number of small entities and carry out’’ its supervisory
consistently for different institution to which the proposed rule will apply; programs.22 Pursuant to such authority,
(4) a description of the projected the Board is proposing to codify the
types, given the diversity in size and
reporting, recordkeeping, and other removal of reputation risk from the
complexity of Board-supervised banking
compliance requirements of the Board’s supervisory programs and to
organizations.
proposed rule, including an estimate of prohibit the Board from encouraging or
Based on the analysis of economic
the classes of small entities that will be compelling Board-supervised banking
impacts, the Board has determined that
subject to the requirement and the type organizations to deny or condition the
the benefits of the proposal are likely to
of professional skills necessary for provision of banking or other financial
outweigh the costs. The reduced
preparation of the report or record; (5) products or services to an individual or
regulatory burden, enhanced
an identification, to the extent business based on their constitutionally
supervisory clarity, potential for
practicable, of all relevant Federal rules protected political or religious beliefs,
expanded market opportunities, and
which may duplicate, overlap with, or associations, speech, or conduct, or
more efficient resource allocation
conflict with the proposed rule; and (6) based on involvement by the individual
provide compelling justification for the
a description of any significant or business in politically disfavored but
proposal. While transitional challenges alternatives to the proposed rule which lawful business activities perceived to
exist, including implementation costs, accomplish its stated objectives and present reputation risk.
these are largely short-term and can be minimize any significant economic As discussed in section IV of this
mitigated through appropriate planning. SUPPLEMENTARY INFORMATION, the Board
The benefits are expected to accrue 17 44 U.S.C. 3502(3). announced in June 2025 that reputation
across all Board-supervised banking 18 5 U.S.C. 601 et seq.
risk will no longer be a component of
organizations, with particularly 19 Under regulations issued by the U.S. Small
examination programs in its supervision
meaningful impact for smaller Business Administration (SBA), a small entity
of banks. Since then, the Board has not
institutions. includes a depository institution, bank holding
company, or savings and loan holding company used reputation risk in its examination
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V. Administrative Law Matters with total assets of $850 million or less. See 13 CFR programs, and reputation risk is being
121.201. Consistent with the SBA’s General removed from supervisory materials. As
A. Paperwork Reduction Act Principles of Affiliation, the Board includes the
a result, the proposal’s benefits and
assets of all domestic and foreign affiliates toward
In accordance with the Paperwork the applicable size threshold when determining
20 5 U.S.C. 603(b)–(c).
Reduction Act of 1995 (PRA),16 the whether to classify a particular entity as a small
entity. See 13 CFR 121.103. As of the second 21 See, e.g., 12 U.S.C. 248(a), 325, 326, 483, 602,
Board may not conduct or sponsor, and
quarter of 2025, there were approximately 2,796 625, 1467a(b)(2)(A), (4)(A), 1820(d), 1844(c)(1)(A),
a respondent is not required to respond small bank holding companies and approximately (2)(A), 3105(c)(1)(A), (2), 3106(a), 5365(b)(2).
157 small savings and loan holding companies, and 22 12 U.S.C. 1844(b). See also 12 U.S.C. 248(i),
16 44 U.S.C. 3501 et seq. approximately 443 small state member banks. 611a, 1467a(g)(1), 3108(a).
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Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules 9503
costs since June 2025 are expected to be could the Board present the proposal depository institutions, and customers
de minimis, as there has been no further more clearly? of depository institutions. Therefore, the
change in policy since that time. • Are the requirements in the requirements of RCDRIA do not apply.
Additionally, the proposal would not proposal clearly stated? If not, how However, the Board invites comments
impose mandatory requirements on any could the proposal be more clearly that will further inform its consideration
small entities, as the proposal would stated? of RCDRIA.
only have the effect of removing • Does the proposal contain technical
reputation risk from the Board’s language or jargon that is not clear? If E. Providing Accountability Through
supervisory programs and prohibiting so, which language requires Transparency Act of 2023
the Board from encouraging or clarification?
• Would a different format (grouping The Providing Accountability
compelling Board-supervised banking Through Transparency Act of 2023 26
organizations to deny or condition the and order of sections, use of headings,
paragraphing) make the proposal easier requires that a notice of proposed
provision of banking or other financial
to understand? If so, what changes to rulemaking include the internet address
products or services to an individual or
the format would achieve that? of a summary of not more than 100
business based on their constitutionally
protected political or religious beliefs, • Is the section format adequate? If words in length of a proposed rule, in
not, which of the sections should be plain language, that shall be posted on
associations, speech, or conduct, or
based on involvement by the individual changed and how? the internet website under section
or business in politically disfavored but • What other changes could the Board 206(d) of the E-Government Act of
lawful business activities perceived to incorporate to make the proposal easier 2002.27
present reputation risk. to understand? In summary, the Board is proposing to
Further, as discussed in the D. Riegle Community Development and codify the removal of reputation risk
Paperwork Reduction Act section, the Regulatory Improvement Act of 1994 from its supervisory programs. The
proposal would not make changes to Pursuant to section 302(a) of the proposal would also prohibit the Board
any projected reporting, recordkeeping, Riegle Community Development and from encouraging or compelling Board-
and other compliance requirements. Regulatory Improvement Act supervised banking organizations to
Therefore, there are no reporting, (RCDRIA),24 in determining the effective deny or condition the provision of
recordkeeping, or other compliance date and administrative compliance banking or other financial products or
requirements from this proposal that requirements for new regulations that services to an individual or business
would impose a significant cost on impose additional reporting, disclosure, based on their constitutionally protected
small entities. The Board is aware of no or other requirements on insured political or religious beliefs,
other federal rules that duplicate, depository institutions (IDIs), the Board associations, speech, or conduct, or
overlap, or conflict with the proposal. must consider, consistent with based on involvement by the individual
Accordingly, the Board believes that principles of safety and soundness and or business in politically disfavored but
there are no significant alternatives to the public interest, any administrative lawful business activities perceived to
the proposal that would accomplish the burdens that such regulations would present reputation risk.
stated objectives and minimize the place on depository institutions, The proposal and summary can be
economic impact of the proposal on including small depository institutions, found at https://www.regulations.gov
small entities. and customers of depository and https://www.federalreserve.gov/
Therefore, the Board believes that the institutions, as well as the benefits of supervisionreg/reglisting.htm.
proposed rule will not have a significant such regulations. In addition, section
economic impact on a substantial 302(b) of RCDRIA requires new List of Subjects in 12 CFR Part 262
number of small entities supervised by regulations and amendments to
the Board. Administrative practice and
regulations that impose additional procedure, Banks, banking, Federal
The Board welcomes comment on all reporting, disclosures, or other new
aspects of its analysis. In particular, the Reserve System.
requirements on IDIs generally to take
Board requests that commenters effect on the first day of a calendar Authority and Issuance
describe the nature of any impact on quarter that begins on or after the date
small entities and provide empirical on which the regulations are published For the reasons set forth in the
data to illustrate and support the extent in final form, with certain exceptions.25 preamble, the Board of Governors of the
of the impact. The Board notes that comment on Federal Reserve System proposes to
these matters has been requested in amend chapter II of title 12 of the Code
C. Plain Language of Federal Regulations as follows:
other sections of this SUPPLEMENTARY
Section 722 of the Gramm-Leach- INFORMATION, and that the requirements
Bliley Act 23 requires the Federal of RCDRIA will be considered as part of PART 262—RULES OF PROCEDURE
banking agencies to use plain language the overall rulemaking process. The
in all proposed and final rules proposal would only impose obligations ■ 1. The authority section for part 262
published after January 1, 2000. The on the Board itself; it would not directly continues to read as follows:
Board has sought to present the apply to other entities. The Board has Authority: 5 U.S.C. 552; 12 U.S.C. 248,
khammond on DSK9W7S144PROD with PROPOSALS
proposed rule in a simple and determined that the proposed rule (1) 321, 325, 326, 483, 602, 611a, 625, 1467a,
straightforward manner and invites would not impose any additional 1828(c), 1842, 1844, 1850a, 1867, 3105, 3106,
comment on the use of plain language. reporting, disclosures, or other new 3108, 5361, 5368, 5467, and 5469.
For example: requirements on IDIs, and (2) places no
• Has the Board organized the new administrative burdens on ■ 2. Section 262.9 is added to read as
material to suit your needs? If not, how depository institutions, including small follows:
23 Public Law 106–102, sec. 722, 113 Stat. 1338, 24 12 U.S.C. 4802(a). 26 5 U.S.C. 553(b)(4).
1471 (1999), 12 U.S.C. 4809. 25 12 U.S.C. 4802(b). 27 44 U.S.C. 3501 note.
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9504 Federal Register / Vol. 91, No. 38 / Thursday, February 26, 2026 / Proposed Rules
§ 262.9 Prohibition on the Use of administered by the Office of Foreign W12–140, 1200 New Jersey Avenue SE,
Reputation Risk or Other Supervisory Tools Assets Control; the Federal Reserve Act; Washington, DC 20590.
to Encourage or Compel Banking the Bank Holding Company Act of 1956; • Hand Delivery: Deliver to Mail
Organizations to Engage in Politicized or the Home Owners’ Loan Act; the Change address above between 9 a.m. and 5
Unlawful Discrimination.
in Bank Control Act; the International p.m., Monday through Friday, except
(a) Definitions—(1) Bank holding Banking Act of 1978; the Bank Merger Federal holidays.
company has the same meaning as in 12 Act; the International Lending AD Docket: You may examine the AD
CFR 225.2(c). Supervision Act of 1983; the Federal docket at regulations.gov under Docket
(2) Banking organization means a Deposit Insurance Act; the Equal Credit No. FAA–2026–2282; or in person at
bank holding company; a savings and Opportunity Act; and the Fair Housing Docket Operations between 9 a.m. and
loan holding company; a state member Act. The Board shall implement, 5 p.m., Monday through Friday, except
bank; any subsidiary of a bank holding administer, and enforce applicable law Federal holidays. The AD docket
company, savings and loan holding consistent with subsections (b) and (c). contains this NPRM, the mandatory
company, and state member bank; and continuing airworthiness information
the combined U.S. operations of a By order of the Board of Governors of the
Federal Reserve System. (MCAI), any comments received, and
foreign banking organization. other information. The street address for
(3) Combined U.S. operations has the Benjamin W. McDonough,
Deputy Secretary of the Board.
Docket Operations is listed above.
same meaning as in 12 CFR 252.2. Material Incorporated by Reference:
(4) Foreign banking organization has [FR Doc. 2026–03818 Filed 2–25–26; 8:45 am]
• For Transport Canada material
the same meaning as in 12 CFR BILLING CODE 6210–01–P
identified in this proposed AD, contact
211.21(o). Transport Canada, Transport Canada
(5) Reputation risk is the potential
National Aircraft Certification, 159
that negative publicity regarding a DEPARTMENT OF TRANSPORTATION Cleopatra Drive, Nepean, Ontario K1A
banking organization’s business
0N5, Canada; telephone 888–663–3639;
practices, whether true or not, will Federal Aviation Administration email TC.AirworthinessDirectives-
cause a decline in the banking
[email protected].
organization’s customer base, costly 14 CFR Part 39 You may find this material on the
litigation, or revenue reductions.
[Docket No. FAA–2026–2282; Project Transport Canada website at
(6) Savings and loan holding
Identifier MCAI–2025–01149–T] tc.canada.ca/en/aviation. It is also
company has the same meaning as in 12
available at regulations.gov under
CFR 238.2(m). RIN 2120–AA64
(7) State member bank has the same Docket No. FAA–2026–2282.
meaning as in 12 CFR 208.2(g). Airworthiness Directives; Bombardier, • You may view this material at the
(8) Subsidiary means any company Inc., Airplanes FAA, Airworthiness Products Section,
that is owned or controlled directly or Operational Safety Branch, 2200 South
AGENCY: Federal Aviation 216th St., Des Moines, WA. For
indirectly by a bank holding company,
Administration (FAA), DOT. information on the availability of this
savings and loan holding company, state
member bank, or foreign banking ACTION: Notice of proposed rulemaking material at the FAA, call 206–231–3195.
organization. (NPRM). FOR FURTHER INFORMATION CONTACT:
(b) Statement of policy. The Board Brenda Buitrago Perez, Aviation Safety
SUMMARY: The FAA proposes to adopt a Engineer, FAA, 1600 Stewart Avenue,
shall not encourage or compel banking
new airworthiness directive (AD) for Suite 410, Westbury, NY 11590; phone:
organizations to deny or condition the
certain Bombardier, Inc., Model BD– 516–228–7300; email: 9-avs-nyaco-cos@
provision of banking or other financial
700–1A10 and BD–700–1A11 airplanes. faa.gov.
products or services to an individual or
This proposed AD was prompted by
business based on their constitutionally SUPPLEMENTARY INFORMATION:
reports that inappropriate tooling was
protected political or religious beliefs,
used to torque the bolts securing the Comments Invited
associations, speech, or conduct, or
baggage door stop fittings, which may The FAA invites you to send any
based on involvement by the individual
have resulted in an improper torque written relevant data, views, or
or business in politically disfavored but
condition. This proposed AD would arguments about this proposal. Send
lawful business activities perceived to
require performing a torque check of your comments using a method listed
present reputation risk. The decision
affected bolts, and re-torquing, re- under the ADDRESSES section. Include
regarding whether or not to make a loan
installing, or replacing affected bolts ‘‘Docket No. FAA–2026–2282; Project
or to open, close, or maintain an
and nuts as applicable. The FAA is Identifier MCAI–2025–01149–T’’ at the
account, provide any other financial
proposing this AD to address the unsafe beginning of your comments. The most
product or service, or modify the terms
condition on these products. helpful comments reference a specific
of any financial product or service rests
with the banking organization, acting in DATES: The FAA must receive comments portion of the proposal, explain the
accordance with applicable law. on this proposed AD by April 13, 2026. reason for any recommended change,
(c) Prohibition on use of reputation ADDRESSES: You may send comments, and include supporting data. The FAA
risk. The Board shall not use reputation using the procedures found in 14 CFR will consider all comments received by
khammond on DSK9W7S144PROD with PROPOSALS
risk as a component of its examination 11.43 and 11.45, by any of the following the closing date and may amend this
programs or in materials used for the methods: proposal because of those comments.
supervision of banking organizations. • Federal eRulemaking Portal: Go to Except for Confidential Business
(d) Rule of construction. Nothing in regulations.gov. Follow the instructions Information (CBI) as described in the
this section shall restrict the Board’s for submitting comments. following paragraph, and other
authority to implement, administer, and • Fax: 202–493–2251. information as described in 14 CFR
enforce the provisions of applicable law, • Mail: U.S. Department of 11.35, the FAA will post all comments
including but not limited to the Bank Transportation, Docket Operations, M– received, without change, to
Secrecy Act; sanctions programs 30, West Building Ground Floor, Room regulations.gov, including any personal
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