[Federal Reserve Proposes Explicit Removal of Reputation Risk in Bank Supervision] The Federal Reserve Board on Monday proposed a plan to explicitly remove reputation risk from bank supervision and is seeking public comment. The proposal reaffirms the Federal Reserve's policy against penalizing or restricting institutions for customers engaging in lawful activities. Vice Chair Michelle W. Bowman stated that it is unlawful for financial institutions to deny customers based on political views, religious beliefs, or legal but unpopular businesses, and such practices should not exist within the Federal Reserve's supervisory framework. In June of this year, the Federal Reserve announced that reputation risk would no longer be a component of bank supervisory reviews. This proposal aims to further ensure that supervisory decisions are based on substantive financial risks while enhancing clarity and precision in decision-making. Public comments must be submitted within 60 days of publication in the Federal Register.