Days after JPMorgan Chase & Co. admitted defunding President Donald Trump following the Jan. 6, 2021, Capitol attack, the Federal Reserve is seeking comment on its proposal that would prevent government supervisors from pressuring banks to sever ties with legal clients based on their activities, including crypto companies.
“We have heard troubling cases of debanking, where supervisors use concerns about reputational risk to pressure financial institutions to debank customers because of their political views, religious beliefs, or involvement in disadvantaged but legal businesses,” including cryptocurrency, said Vice President of Supervision Michelle W. Bowman.
“Discrimination by financial institutions on these bases is illegal and has no role in the Federal Reserve’s supervisory framework,” he added.
The Office of the Comptroller of the Currency, in its capacity as supervisor of national banks, had already taken steps to remove reputation factors from its oversight last year, and the Federal Reserve had similarly announced in July that that risk would no longer be part of its banking exams, so this rules process would codify that measure.
The debanking of cryptocurrencies has been well documented and freely acknowledged by Trump-appointed banking regulators, although new examples continue to emerge. In response to a lawsuit filed last month by Trump and the Trump Organization, JPMorgan, the country’s largest bank, said for the first time that it cut off more than 50 Trump accounts in February 2021. JPMorgan did not specify a reason for closing the accounts. On November 23, 2025, Jack Mallers, CEO of crypto payments company Strike, wrote a social media post that immediately went viral, saying that JPMorgan closed all of his accounts for no reason.
In a Jan. 26 memo to the Board of Governors, Federal Reserve staff wrote that the board’s proposal would “codify the removal of reputational risk from the Board’s oversight programs” and prohibit the Fed from “encouraging or compelling” banks to deny or condition services to customers engaged in “politically disadvantaged but legal business activities.”
In the proposal, the Federal Reserve Board said it intends to include “issuers of permitted payment stablecoins” within its definition of covered banking organizations after completing separate rulemakings, a move that could directly impact crypto-native businesses seeking access to the banking system.
The Federal Reserve said comments on its proposal to eliminate reputational risk from its oversight of banks are due within 60 days from Feb. 23.
