What: On February 26, 2026, the Federal Reserve System (Board) published a proposed rule that would codify the removal of reputation risk from the Board’s supervisory programs. The proposal would prohibit the Board from pressuring banks to deny services to individuals or businesses based on their lawful political or religious beliefs, speech, associations, or activities.
Why: On August 7, President Donald J. Trump signed Executive Order 14331, “Guaranteeing Fair Banking for All Americans,” that directs federal banking agencies to adopt policies to ensuring that financial institutions do not limit access to banking services based on reputation risk. The Board has acknowledged that “over time, concerns have arisen that reputation risk and other similar supervisory tools have been misused.”
The proposal would prevent the Federal Reserve from encouraging or pressuring Fed-supervised banks to deny or condition access to banking or other financial services based on:
- An individual’s or business’s constitutionally protected political or religious beliefs, associations, or conduct.
- Participation in lawful but politically disfavored activities that may be viewed as posing a reputational risk.
The Board included an initial regulatory flexibility analysis with the proposed rule and certified that it will not have a significant impact on a substantial number of small entities.
Action: Comments must be received on or before April 27, 2026.
EXECUTIVE ORDER 14331
Guaranteeing Fair Banking for All Americans
NOTICE OF PROPOSED RULEMAKING:
CONTACT: John Vatian
EMAIL: john.vatian@sba.gov
Is your small business or entity being impacted by a proposed rule? If yes, write a comment letter to the proposing agency.