Federal Reserve Proposes Removing 'Reputational Risk' From Bank Supervision

On Feb. 23 the Federal Reserve Board of Governors proposed a rule to remove “reputation risk” as a factor in its bank supervision standards, stating the change would formally eliminate consideration of that factor in supervisory evaluations ^[1][2].

The proposal launches a public comment period — described in coverage as roughly 60 days or a two‑month window — and has been framed by critics and some industry observers as an effort to end what they call “Operation Chokepoint 2.0,” a practice tied to crypto debanking ^[2][3][4].

Supporters argue the change would provide clearer rules to replace informal supervisory pressure and say lawmakers and industry are pressing Congress to resolve long‑running questions around banks’ access to crypto firms and services ^[1][4].

The Fed is seeking public feedback on the proposal as it advances through rulemaking; stakeholders have about two months to comment before the Board moves toward any final rule ^[3][4].