The Office of the Comptroller of the Currency has ended its reputational risk checks over the crypto industry's backlash against "de-banking"

The Office of the Comptroller of the Currency said it had stopped conducting reputational risk checks on Bank Negara and other Financial Institutions Group after the crypto industry was condemned for being shut out of the financial system. In a statement released Thursday, Rodney E. Hood, acting administrator of the Office of the Comptroller of the Currency, said the agency's inspection process had been focused on "appropriate risk control processes" rather than judging certain activities.
"The Office of the Comptroller of the Currency has never cited reputational risk as a panacea for regulatory action," Mr. Hood said. "Focusing future inspections on more transparent areas of risk can enhance public confidence in the Office of the Comptroller of the Currency's supervisory process and make clear that the Office of the Comptroller of the Currency does not and does not make business decisions for banks." The Office of the Comptroller of the Currency also said it would remove references to reputational risk from its handbook and guidance, although it noted it would not change expectations of how banks handle risk.
The Office of the Comptroller of the Currency also recently made it clear that crypto activities are allowed in the federal banking system, marking a major shift from its previous position. Lawmakers and the crypto industry have long argued that digital asset companies face unique challenges when it comes to setting up and maintaining bank accounts in the United States. Last week, the Senate Banking Committee voted to move forward with a bill that would remove reputational risk as a way for federal regulators to oversee the Financial Institution Group. The vote was partisan, with no support from Democrats.