Prohibition on the Use of Reputation Risk
The Federal Reserve Board proposes to prohibit the use of reputation risk in supervisory assessments, aligning with Executive Order 14331. This reduces regulatory burden for money transmitters and MSBs, but may require updates to compliance policies.
Aforeworn detected this change in the Money Services & Money Transmitters space on July 6, 2026 and published this briefing so affected operators are forewarned rather than caught off guard. It is rated Low urgency. Money transmitters, MSBs, payment processors, crypto firms, remittance providers, fintech wallets should confirm how it applies to their specific situation before acting. There is a time constraint attached: Comment period ends 60 days after publication in Federal Register (approx. August 24, 2026). Final rule effective date TBD.. Acting after that point can mean penalties, a lapsed licence, or lost eligibility — exactly the kind of surprise Aforeworn exists to prevent. Aforeworn monitors Money Services & Money Transmitters continuously and turns every detected change into a plain-English briefing like this one, so you always know first. Forewarned is forearmed.
What changed
Reputation risk will no longer be a factor in supervisory evaluations; proposed rule codifies this change.
Who it affects
Money transmitters, MSBs, payment processors, crypto firms, remittance providers, fintech wallets
What you must do
Review and update compliance policies to remove reputation risk considerations; no immediate action needed until final rule.
Deadline
Comment period ends 60 days after publication in Federal Register (approx. August 24, 2026). Final rule effective date TBD.
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- Proposed Revisions to the Federal Reserve Policy on Payment System Risk and the Guidelines for Account and Services Requests