FIRM Act
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
The FIRM Act prohibits federal banking agencies from considering ‘reputational risk’ – defined as negative publicity or public opinion – when regulating or supervising banks and credit unions. It aims to prevent agencies from using reputational concerns to unfairly limit access to financial services based on political considerations. The bill requires agencies to remove references to reputational risk from their supervisory guidelines and mandates reporting on implementation.
Key provisions
- Prohibits federal banking agencies from considering reputational risk in supervision.
- Defines ‘reputational risk’ as negative publicity impacting confidence, litigation, revenue, or other adverse impacts.
- Requires agencies to remove references to reputational risk from supervisory documents.
- Outlaws agency activities related to reputational risk, including rule-making, examinations, and enforcement actions.
- Mandates reporting to Congress on implementation and policy changes.
- Specifically includes the National Credit Union Administration and the Bureau of Consumer Financial Protection as covered agencies.
Who is affected
- Federal Banking Agencies (e.g., FDIC, NCUA, CFPB)
- Depository Institutions (banks and credit unions)
- Financial Service Providers
- Customers of Depository Institutions
Notable changes
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