The Federal Reserve has opened a 60-day public comment period on a proposal to eliminate "reputation risk" considerations from bank regulations. If approved, banks would be prohibited from using reputation risk as a basis to pressure or restrict clients in legal industries, including cryptocurrency firms. This move is seen as a potential end to the so-called "Operation Chokepoint 2.0" phenomenon, which has led to the debanking of crypto companies. Federal Reserve Vice Chair for Supervision Michelle Bowman emphasized that discrimination based on political views, religious beliefs, or involvement in legal but unpopular industries is illegal.
Federal Reserve Proposes Ending 'Reputation Risk' in Bank Regulations
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