The FIRM Act aims to prevent Federal banking agencies from using reputational risk in the supervision of depository institutions.
The FIRM Act, or Financial Integrity and Regulation Management Act, seeks to eliminate the consideration of reputational risk in the regulation, supervision, and examination of depository institutions by Federal banking agencies. It prohibits these agencies from establishing rules, conducting examinations, or taking enforcement actions based on reputational risk. The Act also mandates that agencies remove any references to reputational risk from their guidance and reports.
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