The Blockchain Association and The Digital Chamber have formally filed comment letters with the Federal Reserve supporting the central bank's proposed rule to permanently remove 'reputation risk' from its bank supervisory framework. The submissions arrived on the final day of the public comment window, April 27, 2026, and represent a coordinated push from the cryptocurrency industry to end what it describes as years of unfair debanking practices under 'Operation Chokepoint 2.0'.
The Federal Reserve published its Notice of Proposed Rulemaking on February 26, 2026, proposing to codify the removal of reputation risk from supervisory programs and prohibit the Board from pressuring banks to deny services based on lawful political or religious beliefs, speech, associations, or activities. The Blockchain Association's letter, signed by Executive Vice President Ashok Pinto, argues that reputation risk was never a legitimate supervisory category but rather an 'inherently subjective' tool that allowed regulators to push banks into cutting ties with digital asset firms without legitimate cause.
'Removing it does not create a gap in the supervisory toolkit; it closes a loophole,' Pinto stated in the letter. The association drew a direct line between reputation risk and the debanking of crypto firms under the Biden Administration, citing January 2023 statements from the Fed urging banks to be alert for customers with blockchain ties, followed by numerous banks denying services to the industry. The letter also referenced Coinbase's identification of over 20 instances where the Federal Deposit Insurance Corporation (FDIC) instructed banks to cease offering digital asset services.
The Digital Chamber's letter, signed by CEO Cody Carbone, pushed for even stronger measures. It highlighted that the Fed's proposed definition includes 'negative publicity… whether true or not' as a basis for supervisory concern, framing that as allowing examiners to penalize legally compliant institutions simply for serving industries attracting political controversy. The Chamber called on the Fed to explicitly block examiners from recharacterizing reputation risk under alternative labels like 'third-party risk,' 'concentration risk,' or 'strategic risk' in any final rule.
Vice Chair for Supervision Michelle Bowman has previously stated that supervisory pressure leading to debanking based on political views or involvement in lawful businesses 'is unlawful and does not have a role in the Federal Reserve's supervisory framework.' The Office of the Comptroller of the Currency (OCC) and FDIC have already moved forward with their own joint final rule prohibiting reputation risk in supervision, adopted April 7 and effective June 6, 2026. The National Credit Union Administration issued similar guidance in September 2025.
The Trump administration's executive order 'Guaranteeing Fair Banking for All Americans,' signed August 7, 2025, underpins the proposed rule. The Digital Chamber stressed that binding rulemaking is the only genuine fix, as guidance can be reversed but a codified rule is harder to quietly shelve under future administrations.
