The Federal Reserve Plans to Permanently Remove the “Reputational Risk” Regulatory Requirement, Potentially Alleviating the “Debanking” Crisis Facing Crypto Firms
7x24h News
The Federal Reserve Plans to Permanently Remove the “Reputational Risk” Regulatory Requirement, Potentially Alleviating the “Debanking” Crisis Facing Crypto Firms
According to The Block, the Federal Reserve recently released a proposal to permanently remove “reputational risk” as a consideration within the banking regulatory framework and has opened a 60-day public comment period. The proposal aims to ensure that banking regulatory decisions are based solely on material financial risks, preventing banks from denying services to customers due to their political views, religious beliefs, or legitimate—but sensitive—business activities. Michelle W. Bowman, Federal Reserve Vice Chair for Supervision, stated that she had already heard of numerous “debanking” cases, and such discriminatory practices should not exist within the Federal Reserve’s supervisory framework. Senator Cynthia Lummis welcomed the proposal, saying it would help position the United States as a global digital asset hub.
Navigating Web3 tides with focused insightsTechFlow News: On February 24, according to The Block, the Federal Reserve recently released a proposal to permanently remove “reputational risk” as a consideration within the banking regulatory framework and has opened a 60-day public comment period. The proposal aims to ensure that banking regulatory decisions are based solely on material financial risks, preventing banks from denying services to customers due to their political views, religious beliefs, or involvement in legal yet sensitive industries. Michelle W. Bowman, Federal Reserve Vice Chair for Supervision, stated that the Fed has already heard of multiple instances of “debanking,” and such discriminatory practices should not exist within the Federal Reserve’s regulatory framework. Senator Cynthia Lummis welcomed the proposal, noting that this move will help position the United States as a global digital asset hub.
