U.S. national banks no longer have to answer how controversial customers might damage their reputations

The OCC is removing that factor from its supervision handbook, the agency said in a Thursday statement.

The Office of the Comptroller of the Currency (OCC) is removing a factor related to how controversial customers might damage a bank's reputation from its internal supervision manuals, the agency said on Thursday.

The calculus of "degree of public attention and potential reputational impact" to a national bank had been highlighted in a presentation about the OCC's supervisory framework that the agency delivered earlier this year.

That slide, viewed by crypto company insiders as contributing to their being debanked, had drawn notice from the industry for listing the factor alongside calculus such as "magnitude of the loss potential" and "frequency of occurrence."

The OCC is removing that factor from its supervision handbook, the agency said in a Thursday statement.

"The OCC's examination process has always been rooted in ensuring appropriate risk management processes for bank activities, not in casting judgment on how a particular activity may fare with public opinion," said Acting Comptroller of the Currency Rodney Hood.

"As such, the agency is removing one factor from its examination process that could be viewed as measuring the degree of public attention or the potential reputational impact of an activity."

Federal Reserve Chair Jerome Powell had made a similar commitment in a congressional hearing last month that the Fed would cut that category of scrutiny from its internal supervision manuals.

The OCC has been making moves to ease the compliance path for banks engaging in crypto business. It recently erased earlier guidance that had called for banks to get pre-approval in writing from the agency if they wanted to handle digital assets business lines.

The banking regulator may soon have its permanent chief, with President Donald Trump's nominee, Jonathan Gould, facing a Senate confirmation hearing next week. The head of the OCC tends to be able to act more quickly and decisively than other financial regulators, because the person operates as the sole authority without a commission or board to seek approval from.