Powell Vows to Cut Fed Manual Language Amid Debanking Concerns

Federal Reserve Chair Jerome Powell on Tuesday pledged to remove language in a Fed manual that tells reserve bank officials to watch for “controversial commentary or activities” by a financial institution’s leadership when considering an application for a payment system account.

The language was mentioned by Senator Cynthia Lummis at a hearing earlier this month. The Wyoming Republican has accused the Fed of unfairly restricting access to the banking system for some institutions.

Senator Cynthia Lummis, a Republican from Wyoming

Photographer: Graeme Sloan/Bloomberg

One section of the manual says: “Reserve Bank staff should generally consider the conduct of the institution and its leadership and whether association with the institution ...