Digital Chamber backs Fed’s proposed rule to strip reputation risk from bank supervision, calling it a fix to years of crypto debanking under Operation Chokepoint 2.0
The letter was already in the Fed’s hands before most of the industry noticed it. On April 27, The Digital Chamber filed a formal comment letter to the Board of Governors, throwing its full support behind a proposed rule that would permanently strip reputation risk from bank supervision.
The organization, on X as @DigitalChamber, represents over 250 blockchain and digital asset companies. What it described in that letter was not abstract. Between 2021 and 2024, federal regulators systematically denied banking access to lawful crypto debanking targets, documented through FDIC “pause letters” and FOIA productions filed by Coinbase Global.
Congress called it Operation Chokepoint 2.0. The House Committee on Financial Services final staff report released December 1, 2025 laid it out in detail.
The Rule That Could Rewrite the Playbook
The Fed’s proposed rulemaking, published in the Federal Register at 91 Fed. Reg. 9,499 on February 26, 2026, would codify the removal of reputation risk from examination frameworks. The Digital Chamber, in its comment letter, pushed for something harder edged than what the Board proposed.
TDC CEO Cody Carbone signed the letter himself. The position: no lawful business should lose banking access based on what a regulator subjectively perceives as a reputational problem.
The issue was how easily that standard could be turned into a weapon. The definition the Fed drafted includes “negative publicity… whether true or not” as a basis for supervisory concern. Per the TDC filing, that framing lets examiners penalize legally compliant institutions for serving industries that attract political controversy. Not fraud. Not insolvency. Political inconvenience.
Vice Chair for Supervision Michelle Bowman said as much in a February 23, 2026 statement. Reputational risk, she noted, is not an effective supervisory tool. Feedback works when it is clear and actionable. This was neither.
Chokepoint 2.0 Left a Paper Trail
The FDIC letters are public now, accessible through Coinbase’s FOIA Reading Room. Banks received instructions to pause digital asset activity. The companies targeted were operating legally. None of that mattered under a reputation risk standard.
TDC also flagged something the proposal does not directly address. The word “reputation” appeared in 1.5% to 4.6% of Matters Requiring Attention and Matters Requiring Immediate Attention documents, depending on institution type. That rate, per the filing, is not incidental.
The FDIC and OCC had already moved. On April 7, 2026, the two agencies issued a joint final rule formally prohibiting reputation risk in supervision. The FDIC announcement is available on the agency site. The NCUA had issued similar guidance back in September 2025.
TDC wants the Fed’s rule to go further. Any final version, the Chamber argued, should explicitly block examiners from recharacterizing reputation risk under alternative labels like “third-party risk,” “concentration risk,” or “strategic risk.” That backdoor stays open without direct language closing it.
The Chokepoint 3.0 dynamic that a16z’s Alex Rampell identified last year, where banks moved from outright denial to pricing out crypto firms through data access fees, shows how creative the pressure can get when formal avenues get closed.
Stablecoins, Supervision, and What Comes Next
There is another piece of this the comment letter raises directly. The Fed’s proposed definition of “banking organization” is set to eventually include permitted payment stablecoin issuers under 12 U.S.C. 5901(23). TDC backed that inclusion. Digital asset firms operating alongside banking infrastructure have been disproportionately targeted, the filing noted, through subjective supervision applied to a legally permissible industry.
The Trump administration’s executive order, “Guaranteeing Fair Banking for All Americans,” signed August 7, 2025, sits behind all of this. The Fed’s rulemaking aligns with that order. Whether it survives the next administration with teeth intact is a different question, which is exactly why TDC said binding rulemaking is the only real fix. Guidance can be reversed. A codified rule is harder to quietly shelve.
Banking regulators have not formally relied on reputation risk since June 2025. Codifying that, per the TDC filing, costs nothing to implement. The operational machinery already changed. What the Fed is deciding now is whether to lock it in permanently.
