Fed Issues Final Guidelines for Evaluating Joint Federal Reserve Account Requests

The Federal Reserve today issued its framework for how it will evaluate applications for joint accounts at Federal Reserve banks. Joint accounts can be used to facilitate faster settlement for payment transactions among the joint account holders.

Under the guidelines, joint account applicants must be depository institutions eligible to open individual accounts at Federal Reserve banks. Applicants must designate one “agent” for the account, indemnify the Fed for losses related to operating the account and rely on the payment system operator or agent to provide clearing services and manage positions within the joint account. The Fed will evaluate all applications it receives based on six specific criteria.

ABA generally supports the Fed’s guidelines as the industry continues to work toward the goal of a faster, more efficient payments system. In previous comments, ABA emphasized the need to maintain the safety and integrity of the payments system by limiting access to joint accounts to those that are already eligible to open individual accounts with the Fed. “Put simply, banks are held to higher standards in order to protect the interests of their customers,” ABA said. “Any entity that is not subject to the same standards and oversight would present unacceptable risk as a payments system participant.”

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