On June 23, the NCUA finalized a rule codifying the elimination of reputation risk from its supervisory framework for federally insured credit unions. As previously covered by InfoBytes, the NCUA ceased examining for reputation risk on September 25, 2025, and issued a proposed rule in October 2025 pursuant to Executive Order 14331: “Guaranteeing Fair Banking for All Americans“ (covered by InfoBytes here). Under the final rule, the NCUA may not criticize or take adverse action against an institution on the basis of reputation risk because of the subjectivity of this criterion. The agency is also prohibited from requiring, instructing or encouraging an institution to refrain from or terminate business relationships with third parties on the basis of reputation risk. The final rule also clarifies that the NCUA may not take adverse action against an institution based on lawful political, social, cultural, or religious views or activities, constitutionally protected speech, or lawful business activities disfavored by the agency or any of its personnel. The NCUA received 56 comments on the proposal, with the agency noting that the majority of comments supported the removal. The rule is effective July 27.