The Federal Reserve will seek public comment on proposals to eliminate "banks refusing service due to reputational risk" measures.

MarsBitNews · 2026-02-24T06:45:09+00:00

The Federal Reserve plans to seek public input on a proposal to prohibit banks from refusing services to legitimate customers due to reputational risk, emphasizing that such behavior is a violation and not in line with the regulatory framework. The Vice Chairman of the Federal Reserve highlighted the need to prevent discriminatory actions based on customers' political or religious beliefs.

MarsBitNews

2026-02-24 06:45:09

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Mars Finance News: On February 24, the Federal Reserve Board will seek public comment on a proposal to eliminate measures that allow banks to refuse service due to reputation risk. The proposal reaffirms the committee’s policy stance: prohibiting punitive disconnection of banking services or account bans for customers engaged in legitimate activities. Federal Reserve Vice Chair Michelle W. Bowman stated, “We have observed concerning cases of banks refusing service, where regulators, citing reputation risk, pressure financial institutions to terminate services based on customers’ political views, religious beliefs, or participation in lawful but unpopular activities. Discrimination based on these reasons is both illegal and inconsistent with the Federal Reserve’s regulatory framework.” In June last year, the Federal Reserve announced that it would no longer include “reputation risk” as part of its bank supervision examinations.

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