WASHINGTON—The Office of the Comptroller of the Currency (OCC) at the U.S. Department of the Treasury, with the Federal Deposit Insurance Corporation (FDIC), has issued a final rule ensuring fair banking access by eliminating the major oversights over major financial institutions that pertain to so-called "reputational risks."
In the final rule issued to the Federal Register on Tuesday, this new rule codifies the elimination of the supposed reputation risk through the federal rulemaking process.
"The final rule further prohibits the agencies from requiring, instructing, or encouraging an institution or an employee of an institution to terminate a contract with, discontinue doing business with, or modify the terms under which it will do business with a person or entity on the basis of the person’s or entity’s political, social, cultural, or religious views or beliefs, constitutionally protected speech, or solely on the basis of the third party’s involvement in politically disfavored but lawful business activities," reads the OCC's analysis on the rule.
Virtually all financial institutions in the United States will fall under this new oversight. The Federal Register is the U.S. government's daily journal published by the National Archives and Records Administration and is the official outlet for publishing administrative rules and presidential communications, both of which are considered to carry the force of law.
"Today’s final rule is another step toward reducing the opportunities for regulatory abuse by removing reputation risk as a basis for government action," explained Jonathan Gould, the Comptroller of the Currency and the chief executive of the OCC agency, in a statement.
"Reputation risk is not a sound basis for supervision. ... The result, in too many cases, has been lawful businesses and individuals denied access to banking services.
"I want to thank the teams at the FDIC and the OCC for their efforts in finalizing this rule, and I look forward to its implementation," Gould added.
He additionally noted that the rule is a product of the executive order issued by President Donald Trump, a Republican, who mandated equal access to banking for reputationally risky companies, including adult industry firms and the scores of adult content creators classified as small businesses and independent contractors by the Internal Revenue Service.
AVN reported that the Free Speech Coalition (FSC), the trade group representing the adult entertainment industry, endorsed Trump's executive order, as debanking has remained a consistent and ongoing crisis for members of the industry, sex workers and those operating in similar and adjacent industries.
"FSC has devoted significant resources to educating Congress and federal banking regulators about the severe and widespread impacts of debanking on the legal adult industry, including original research, Statements for the Record, and direct engagement with lawmakers and agency officials," wrote Alison Boden, FSC's executive director, in a late Decemeber public filing in support of the OCC rule. "These efforts have documented that banking discrimination against the adult industry is systematic, economically harmful, and rooted in reputation risk rather than material financial concerns."
Boden added, "The Proposed Rule represents a critical opportunity to correct this problem. By codifying the elimination of reputation risk from OCC and FDIC supervisory frameworks, the agencies will help restore fair access to banking for millions of Americans engaged in lawful work, improve the effectiveness and objectivity of supervision, and support broader national efforts, as reflected in Executive Order 14331, to prevent politicized or unlawful debanking."
The executive order mentioned in Boden's comments is the Equal Access to Banking order. FSC has also proposed an adult industry credit union for its member companies.
Lawrence Walters, an attorney representing adult entertainment industry clients, told AVN that the new final rule is a step in the right direction on the front of equal banking access.
"This will hopefully be the beginning of the end of a sad chapter in American banking policy where individuals and businesses were subjected to widespread discrimination when seeking or maintaining financial services based on their disfavored but lawful business activities or protected speech," Walters said. "The concept of reputational risk is exceedingly subjective and capable of arbitrary application by both banks and enforcement agencies. The adult industry has borne the brunt of this discrimination for years."
Corey Silverstein, an attorney representing adult clients who often works with Walters on cases, added that this new rule is a positive development, with caution.
"This rule could be one of the most meaningful shifts in banking access for the adult industry in over a decade," Silverstein told AVN. "By removing ‘reputation risk' as a regulatory lever, it reduces the informal pressure that has historically pushed banks to cut off lawful adult businesses."
"That said, it doesn’t eliminate risk—it just shifts the conversation from stigma to compliance. Companies that invest in strong compliance, transparency, and payment integrity will benefit the most. This doesn’t force banks to work with the adult industry—but it removes a major reason they’ve avoided it," added Silverstein. "That’s a big deal.”
"The final rule should generate cautious optimism," added Walters. "Protection of institutional reputation is embedded in the financial industry and will be difficult to completely eliminate."
