Today, the American Bankers Association, the Consumer Bankers of America and the National Association of Federally Insured Credit Unions submitted a comment letter to the Federal Reserve regarding its proposal to create a uniform policy for all Federal Reserve Banks to use in evaluating applications for accounts and payment services.
This is particularly important now, the groups claim, because some state-chartered institutions that hold uninsured deposits are seeking access to the payment system. Fed banks are not subject to the same level of oversight as other payment system participants, and ABA supports standardizing the applicant review process for Federal Reserve Banks to ensure uniformity across the entire system. The letter emphasizes the need for clear and consistent guidelines to evaluate requests for a master account or access to Reserve Bank services. It also states that the payment system would benefit if the proposed guidelines were strengthened to address the risks certain entities—including those that are not federally insured and those that operate a business model not traditionally found in its charter type—pose to the payment system, the U.S. financial system and the economy.
The associations urged the Fed to outline specific capital, liquidity and risk management requirements for master account access, as well as additional parameters for eligible entities with business models that may present enhanced risks to the payment system or to the U.S. financial system and are not subject to the same level of federal regulatory oversight.