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Panelists urge raising reporting thresholds, notice and statutory limits on "reputational risk" after executive order
Summary
Speakers at the PCLB forum said President Trump's executive order removing "reputational risk" from supervisory exam scoring is a helpful first step but urged statutory reforms, adjusted SAR/CTR thresholds, and better data-security and beneficial-ownership records to make change durable and reduce privacy harms.
Panelists at a Privacy and Civil Liberties Oversight Board forum evaluated President Trump's executive order directing agencies to remove "reputational risk" from supervisory evaluations and to develop strategies to prevent politicized debanking.
David Ipsson described the executive order as "a great step" that removes a supervisory pressure point but warned it is vulnerable to reversal without statutory backing. He recommended codifying fair-access protections so banking decisions "must instead be made on the basis of individualized, objective, and risk-based analysis." Alexandra Gazer likewise welcomed the removal of reputational risk from formal examiner guidance and said the order could help restore a better balance between banks, regulators and customers.
Panelists proposed a set of near-term and structural reforms: raise the monetary thresholds for CTRs and SAR triggers (some panelists noted current thresholds date to 1970 and are not inflation-adjusted), permit narrowly tailored notice so banks can request clarifying information before closure, codify limits on using reputational-risk considerations to avoid politicized debanking, and establish a reliable beneficial-ownership database to reduce laundering while reducing unnecessary surveillance. Dr. Anil Kash and others stressed that focusing collection and enforcement on higher-value signals would both reduce privacy exposure and improve government capacity to pursue real illicit finance.
Speakers also flagged implementation details the executive branch would need to address: who within government will review complaints, what standards will govern queries of government-held SAR/CTR data, how long the government will retain such records, and what cybersecurity standards will apply. Panelists agreed that the executive order's immediate effects (agency guidance changes) are meaningful but said legislation or narrow regulatory rulemaking would be necessary to make reforms durable.
The forum concluded with a PCLB announcement that public comments will be accepted through December 12 and that the board will publish the forum video and transcript.
