Catenaa, Tuesday, February 24, 2026- The Federal Reserve has opened a 60-day public comment period on a proposal to permanently remove “reputation risk” from its bank supervisory framework, formalizing a policy shift first announced in June 2025 amid concerns over debanking of crypto firms and other lawful businesses.
The proposal would codify guidance that bank examiners should base supervisory decisions on material financial risks rather than reputational considerations. The change seeks to clarify that banks should not face supervisory pressure for serving customers engaged in legal but politically or socially sensitive activities.
Vice Chair for Supervision Michelle W. Bowman said recent cases raised concerns that reputation risk had been used to pressure institutions to cut off customers because of political views, religious beliefs or lawful business activities. She said such discrimination has no place in the Fed’s supervisory framework.
Sen. Cynthia Lummis praised the move, saying the central bank should not determine which digital asset companies can access banking services. The Senate Banking Committee Republicans said no American should lose banking access over lawful conduct.
President Donald Trump has pledged to end what crypto executives describe as “Operation Choke Point 2.0,” alleging coordinated regulatory pressure on banks serving digital asset firms. The policy debate unfolds as Trump pursues a $5 billion lawsuit against JPMorgan Chase over account closures in 2021. The bank has acknowledged closing several accounts but disputes the claims.
The Fed’s proposal will be published in the Federal Register, with comments due within 60 days.
