--- title: SB 372. Department of Banking and Finance; removal of references to reputational risk from any Department of Banking and Finance guidance, rule, examination manual, or similar document; provide collection: bills id: 2025-2026/sb372 cite_as: SB 372, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/sb372 md_url: https://georgiacommons.org/bills/2025-2026/sb372.md text_url: https://georgiacommons.org/bills/2025-2026/sb372/text source_url: https://www.legis.ga.gov/legislation/72001 date: 2025-04-02 status: introduced corpus_version: bills-2026-08-28 license: Public record of the Georgia General Assembly, via LegiScan; see about.md publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice. up: https://georgiacommons.org/bills/2025-2026.md previous: https://georgiacommons.org/bills/2025-2026/sb371.md next: https://georgiacommons.org/bills/2025-2026/sb373.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 95 omitted_url: https://georgiacommons.org/bills/2025-2026/sb372.md?full=1 bill_number: SB 372 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: Senate bill_type: bill status_date: 2025-04-02 last_action: Senate Read and Referred sponsors: - Larry Walker - John Kennedy - Carden Summers - Mike Hodges - Russ Goodman - Max Burns text_version: Introduced has_text: true legiscan_url: https://legiscan.com/GA/bill/SB372/2025 upstream_id: 2019411 summaries_model: claude-sonnet-5 topic_tags: - banking regulation - financial institutions - state agencies - reputational risk --- # SB 372. Department of Banking and Finance; removal of references to reputational risk from any Department of Banking and Finance guidance, rule, examination manual, or similar document; provide ## Text 25 LC 62 0186 Senate Bill 372 By: Senators Walker III of the 20th, Kennedy of the 18th, Summers of the 13th, Hodges of the 3rd, Goodman of the 8th and others A BILL TO BE ENTITLED AN ACT To amend Article 1 of Chapter 1 of Title 7 of the Official Code of Georgia Annotated,1 relating to Department of Banking and Finance and financial institutions generally, so as to2 provide for the removal of references to reputational risk from any Department of Banking3 and Finance guidance, rule, examination manual, or similar docu ment; to prohibit the4 department from considering reputational risk when regulating f inancial institutions; to5 provide for a report detailing any policy changes made by the department as a result of this6 Act; to provide for a definition; to provide for related matters; to repeal conflicting laws; and7 for other purposes.8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:9 SECTION 1.10 Article 1 of Chapter 1 of Title 7 the Official Code of Georgia Annotated, relating to11 Department of Banking and Finance and financial institutions ge nerally, is amended in12 Part 1, relating to purposes and preliminary matters, by revisi ng subparagraph (H) of13 paragraph (21) of Code Section 7-1-4, relating to definitions, as follows:14 "(H) In addition, as the context requires, a national bank, savings and loan association,15 or federal credit union for the purpose of the following provisions:16 S. B. 372 - 1 - 25 LC 62 0186 (i) Code Section 7-1-2, relating to findings of the General Assembly;17 (ii) Code Section 7-1-8, relating to supplementary principles of law;18 (iii) Code Section 7-1-37, relating to restrictions on officials and personnel;19 (iv) Code Section 7-1-70, relating to disclosure of information;20 (v) Code Section 7-1-80, relating to department taking reputat ional risk into21 consideration prohibited;22 (vi) Code Section 7-1-90, relating to judicial review of department actions;23 (vi)(vii) Code Sections 7-1-111 and 7-1-112, relating to emergency clos ings and24 business restrictions;25 (vii)(viii) Paragraph (3) of subsection (a) of Code Section 7-1-394, relating to criteria26 to be considered in approving new banks;27 (viii)(ix) Code Section 7-1-840, relating to criminal prosecutions; and28 (ix)(x) Code Section 7-1-841, relating to application of Title 16 provisions;"29 SECTION 2.30 Said article is further amended in Part 3, relating to operations of Department of Banking and31 Finance, by adding a new Code section to read as follows:32 "7-1-80.33 (a) As used in this Code section, the term 'reputational risk' means the potential that34 negative publicity or negative public opinion regarding a finan cial institution's business35 practices may cause a decline in confidence in such institution or a decline in the customer36 base, costly litigation, or revenue reductions or otherwise adv ersely impact the financial37 institution.38 (b) The department shall remove any reference to reputational risk from any guidance,39 rule, examination manual, or similar document established by th e department such that40 reputational risk is no longer taken into consideration by the department when examining41 and supervising a financial institution.42 S. B. 372 - 2 - 25 LC 62 0186 (c) The department shall not consider reputational risk when:43 (1) Establishing any rule, regulation, requirement, standard, or supervisory expectation44 related to the reputational risk of a financial institution;45 (2) Conducting any examination, assessment, data collection, o r other supervisory46 exercise concerning or related to reputational risk of a financial institution;47 (3) Issuing any finding, supervisory criticism, or other super visory communication48 related to reputational risk of a financial institution;49 (4) Making any supervisory ratings decision or determination that is based, in whole or50 in part, on any matter concerning reputational risk of a financial institution; and51 (5) Taking any formal or informal enforcement action that is based, in whole or in part,52 on any matter related to reputational risk of a financial institution.53 (d) The department shall submit a report to the General Assemb ly no later than54 January 1, 2026, describing any changes to internal policies made as a result of this Code55 section."56 SECTION 3.57 All laws and parts of laws in conflict with this Act are repealed.58 S. B. 372 - 3 - ## Summaries written by Georgia Commons The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary. A Georgia Senate bill would bar the Department of Banking and Finance from using a bank's public reputation as a factor when regulating financial institutions, and require the agency to strip 'reputational risk' language from its rules and guidance. ### Plain-language summary Currently, Georgia's Department of Banking and Finance can consider a financial institution's reputation, meaning public opinion or negative publicity about its business practices, as part of how it writes rules and supervises banks. This bill would end that practice. The bill adds a new section to Georgia law (O.C.G.A. § 7-1-80) defining 'reputational risk' and directing the department to erase any reference to it from its guidance, rules, examination manuals, or similar documents. It also bars the department from using reputational risk when writing rules, conducting exams, issuing findings, setting supervisory ratings, or taking enforcement action against a financial institution. The department would have to report to the General Assembly by January 1, 2026, describing any internal policy changes made because of this law. A related section updates a definitions list to cross-reference the new prohibition. ### What it does - Creates a new Georgia law (O.C.G.A. § 7-1-80) defining 'reputational risk' as harm to a financial institution from negative publicity or public opinion. - Requires the Department of Banking and Finance to remove all references to reputational risk from its guidance, rules, examination manuals, and similar documents. - Prohibits the department from using reputational risk when setting rules, conducting exams, issuing supervisory findings, assigning ratings, or taking enforcement action against a financial institution. - Requires the department to submit a report to the General Assembly by January 1, 2026 describing any internal policy changes made because of the new rule. - Updates a cross-reference list in the definitions section (O.C.G.A. § 7-1-4) to include the new reputational risk prohibition. ### Who it affects The Georgia Department of Banking and Finance, which must rewrite its internal guidance and change how it supervises institutions, and the banks, savings and loan associations, credit unions, and other financial institutions the department regulates, whose oversight would no longer factor in public reputation. ### Why it matters If enacted, state banking regulators would no longer be able to flag or penalize a Georgia financial institution based on its public image or negative press, only on measurable financial or legal factors, changing how examinations, ratings, and enforcement actions are conducted going forward. ### Key provisions - Section 1 revises the cross-reference list in the definitions section (O.C.G.A. § 7-1-4) to add the new reputational risk prohibition (new Code Section 7-1-80). - Section 2 creates Code Section 7-1-80, defining 'reputational risk' in subsection (a) as harm to confidence, customer base, litigation costs, or revenue from negative publicity. - Section 2(b) requires the department to purge reputational risk references from all guidance, rules, and examination manuals. - Section 2(c) lists five specific supervisory activities, rulemaking, examinations, findings, ratings, and enforcement, where the department cannot consider reputational risk. - Section 2(d) sets a January 1, 2026 deadline for the department to report policy changes to the General Assembly. - Section 3 repeals any conflicting laws. ## Status - Status: Introduced (2025-04-02) - Last action: Senate Read and Referred (2025-04-02) - Sponsors: Larry Walker, John Kennedy, Carden Summers, Mike Hodges, Russ Goodman, Max Burns - Official page: https://www.legis.ga.gov/legislation/72001 > The history, votes, and amendments (95 characters) are at https://georgiacommons.org/bills/2025-2026/sb372.md?full=1