US regulator to restrict bank examiners’ oversight to strictly financial risks

Core Points - The FDIC has proposed changes to bank supervision in the US, focusing on core financial risks and limiting authority over nonfinancial issues [1][2] - The first proposal narrows the definition of "safety and soundness" to material financial risks, allowing regulators to act only on issues that could cause substantial financial harm or increase failure risk [2][3] - The second proposal formalizes the elimination of "reputation risk," a standard previously used to address negative publicity that could harm banks [2][3] - The FDIC acting chairman criticized the reputation risk standard as "ripe for abuse" and stated it adds no value to supervision [3] - The proposals also aim to prevent examiners from pressuring banks to deny services based on political, social, cultural, or religious viewpoints, addressing concerns over "debanking" practices [3][4] - An executive order signed by Trump earlier this year reinforces fair access to banking services, prohibiting discrimination based on political or religious beliefs [4]