COMMENT CALL: The NCUA has proposed to add a new rule that would formally eliminate reputation risk from its supervisory program. The agency previously announced that it planned to stop using reputation risk.
The proposed rule would prohibit NCUA from:
- Criticizing or taking adverse action against an institution (defined as an entity for which the NCUA makes or will make supervisory determinations or other decisions) either solely or jointly on the basis of reputation risk; and
- Requiring, instructing, or encouraging an institution to close an account, to refrain from providing an account, product, or service, or to modify or terminate any product or service on the basis of a person or entity’s political, social, cultural, or religious views or beliefs, constitutionally protected speech, or on the basis of “politically disfavored but lawful business activities perceived to present reputation risk.”
The NCUA proposal is in response to a recent executive order (EO) on “debanking.” The EO was intended to prevent financial institutions from denying services to anyone based on political or religious beliefs, lawful business activities, or other constitutionally and statutorily protected attributes. We summarized that EO in this August 2025 Compliance Courier.
NCUA said it “has determined that assessing reputation risk is subjective, ambiguous, and lacking in measurable criteria. The proposed rule is intended to ground NCUA’s supervision and examination programs in data-driven conclusions to eliminate the risk of individual perspectives driving the supervisory process.”
Make your voice heard
How does your credit union feel about the elimination of reputation risk from the NCUA’s supervisory program? The League plans to comment on this proposal, and we’d like your input. Please share your thoughts with Paul Guttormsson by Dec. 15 so that our comment letter (which is due by Dec. 22) reflects your views.