The National Credit Union Administration (NCUA) is looking to codify the elimination of reputation risk from its supervisory program.
Previously, the agency announced that it ceased using reputation risk and equivalent concepts in the examination and supervisory process. These updates adhere to White House Executive Order 14331, Guaranteeing Fair Banking for All Americans. The order requires federal banking regulators to remove the use of reputational risk or equivalent concepts that could result in politicized or unlawful debanking.
“NCUA employees will no longer base supervisory concerns on reputation risk, nor will they refer to or engage in discussions about reputation risk as part of examinations and supervision contacts of a credit union or credit union service organization,” the rule states.
The new rule would also prohibit the NCUA from instructing credit unions to close accounts and refrain from providing or altogether terminating products and services on the basis of a person or entity’s protected class or political views.
NCUA has made the determination that assessing reputation risk is subjective, ambiguous, and is lacking in measurable criteria.
Overall, the proposed rule is intended to ground NCUA’s supervision and examination programs in data-driven conclusions. Doing this would, in effect, eliminate the risk of individual perspectives driving the supervisory process.
The NCUA welcomes public comments on the proposed rule. Comments can be submitted through the Federal eRulemaking Portal. (Docket number is NCUA–2025–0972.)