Blockchain Association asks Fed to codify reputation-risk removal

The Blockchain Association asked the Federal Reserve to formally codify the removal of ‘reputation risk’ from bank supervisory examinations in a comment letter sent Monday. The letter was submitted by Ashok Pinto, the group’s executive vice president of legal and government relations, in response to the Fed’s request for input.

Pinto noted that reputation risk was removed as a component of examination programs in June 2025 and requested that the Board finalize a binding rule to make the change durable. The letter urged the Fed to “move expeditiously to finalize and codify the removal of reputation risk from its supervisory framework,” arguing that regulated firms deserve clear, objective standards.

Reputation risk refers to potential harm to a bank’s public standing or perceived integrity from relationships with certain customers or activities. Regulators have cited reputation risk in past supervisory actions when banks ended relationships with cryptocurrency firms or cut off access to payment and deposit services; critics have used the term “Operation Chokepoint 2.0” to describe those patterns.

The letter warned that leaving the change uncodified could allow future administrations to apply reputation risk inconsistently. ‘Reputation risk is only as neutral as the administration wielding it,’ Pinto wrote, and he cited a January report from a public-policy institute that found many debanking cases resulted from government pressure rather than independent bank decisions.

Pinto asked the Fed to align any final rule with a joint OCC and FDIC final rule issued April 7 that removed reputation risk from those agencies’ supervisory frameworks. ‘A standard harmonized across federal departments and agencies would provide regulated entities with the clarity and predictability they are owed,’ the letter said.

The Fed’s call for comments is part of a review of supervisory practices following interagency actions. The Blockchain Association’s submission joins comments from other industry groups and stakeholders that request consistent standards across federal bank regulators.