Fed Proposes to Codify Removal of ‘Reputation Risk’ from Bank Rules
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The Federal Reserve proposed a rule to eliminate 'reputation risk' from bank oversight, aiming to protect lawful businesses, including digital asset firms, from subjective regulatory pressure. Public comments will influence this permanent change expected by February 2026, following earlier regulatory changes to enhance financial risk focus.
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- The Federal Reserve has proposed a rule to remove “reputation risk” from bank supervision.
- Lawmakers and industry cited debanking tied to subjective regulatory pressure.
- Public comments will shape a final rule that could permanently change U.S. banking oversight.
The Federal Reserve Board has requested public comments on February 23, 2026, to remove “reputation risk” from bank supervision permanently. Vice Chair Michelle Bowman leads this effort to refocus oversight strictly on core financial risks.
This proposal addresses the debanking of lawful businesses, including digital asset firms, by prohibiting examiners from pressuring banks over subjective reputation concerns. The move builds on the June 2025 decision and aims to end perceived regulatory overreach like Operation Chokepoint 2.0.
Why Removing ‘Reputation Risk’ Matters
Vice Chair Michelle W. Bow…
Read The Full Article Fed Proposes to Codify Removal of ‘Reputation Risk’ from Bank Rules On Coin Edition.
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