The Office of the Comptroller of the Currency (OCC) has taken steps to eliminate “reputational risk” from its handbooks and guidance. In a similar move, the Federal Deposit Insurance Corporation (FDIC) is planning to follow suit.
According to the OCC, this decision aligns with “the OCC’s mission and its supervisory objectives to ensure that banks have appropriate and strong risk management processes for their business activities, treat customers fairly, and comply with applicable laws and regulations.”
This change signifies a shift in how these regulatory bodies approach supervision and examination practices within financial institutions. The focus appears to be moving towards ensuring robust risk management processes rather than reputational considerations alone.
The announcement highlights an effort by both agencies to refine their oversight frameworks, potentially affecting how banks manage risks associated with their operations.
