Fed urged to lock in ‘reputation risk’ removal from bank oversight

The U.S. Blockchain Association has urged the Federal Reserve to make its “reputation risk” removal from bank supervision a binding rule. In a comment letter on Monday, Ashok Pinto said the Fed should convert its June 2025 policy change into objective, consistent standards, because “reputation risk” is subjective and can weaken supervisory consistency. Crypto firms and industry participants have linked “reputation risk” to debanking actions, likening the approach to “Operation Chokepoint 2.0.” Pinto warned that even if the idea is described as “administration-neutral,” future governments could reintroduce similar pressure without long-term safeguards. The letter also cited a January analysis by the Cato Institute, arguing many U.S. debanking cases stem from government pressure rather than independent bank decisions. It further noted alignment with other regulators: the OCC and the FDIC issued a joint April 7 final rule removing “reputation risk” from their supervisory frameworks. For crypto traders, the key takeaway is incremental regulatory certainty that could reduce discretionary banking friction, but the final impact depends on how the Fed implements the rule.