The Fed Loosens Reputation Risk Rules, A Key Turning Point for Crypto-Banking Collaboration On February 23, the Federal Reserve Board officially announced plans to completely remove "reputation risk" from banking regulatory rules, with a 60-day public comment period now underway. The core message is simple: Regulators can no longer use reputation as an excuse to force banks to deny services to lawful customers. Vice Chair Michelle W. Bowman made it clear: "We’ve heard troubling cases of debanking. Regulators have pressured financial institutions to deny services to customers blacklisted for their political views, religious beliefs, or participation in lawful but unpopular businesses, citing reputation risk. Discrimination by financial institutions on these grounds is illegal and has no place in the Fed’s regulatory framework." The proposal is still in the public comment phase and will only take effect after the review period ends.