The Federal Reserve is seeking public feedback over 60 days on a proposal to formally remove “reputation risk” from its banking supervision framework, a move widely viewed as targeting crypto debanking concerns.
In a press release on Monday, the Fed said it wants to codify earlier guidance issued in June directing supervisors not to pressure banks to close accounts based on reputational considerations, limiting oversight decisions to financial risk management factors.
“We have heard troubling cases of debanking — where supervisors use concerns about reputation risk to pressure financial institutions to debank customers because of their political views, religious beliefs, or involvement in disfavored but lawful businesses,”
Said Vice Chair for Supervision, Michelle Bowman.
Bowman added that discrimination on such grounds is unlawful and “does not have a role in the Federal Reserve’s supervisory framework,” signalling a shift in regulatory posture toward politically sensitive industries including digital assets.
The term “Operation Chokepoint 2.0” has been used by parts of the crypto industry to describe what they alleged was coordinated pressure under the Biden administration to restrict banking access for digital asset firms.
Senator Cynthia Lummis welcomed the proposal, writing that:
“It is not the Fed’s role to play both judge and jury for banking digital asset companies,”
While Galaxy Digital research head Alex Thorn said the rollback effort “continues.”
The move comes amid broader policy efforts under President Donald Trump to address debanking claims, including scrutiny of large institutions such as JPMorgan Chase over alleged politically motivated account closures.