Federal Reserve Board seeks public comment on payment account proposal
7 reported
The Federal Reserve Board on Wednesday requested public comment on a proposal to establish a "payment account" that legally eligible financial institutions could use for clearing and settling payments. The proposal follows earlier public input and aims to address requests from institutions with diverse business models seeking direct access to Federal Reserve payment services to reduce costs and increase speed. Many of these requests come from institutions that are not federally insured. The proposed account would support innovation while mitigating risks to Reserve Banks and the payment system. By law, Reserve Banks decide requests for access to Federal Reserve accounts and payment services. The comment period will close 60 days after publication in the Federal Register.
What’s reported
The Federal Reserve Board requested public comment on a proposal to establish a "payment account" for legally eligible financial institutions.
The account would be used specifically for clearing and settling payments.
Many requests for access come from institutions that are not federally insured.
Payment account holders would not have access to intraday credit or the discount window.
Account holders would not earn interest on balances held at a Reserve Bank.
The proposal would not expand or change legal eligibility for access to accounts or payment services.
The Board is encouraging Reserve Banks to temporarily pause decisions on access requests from institutions in Tier 3 of the Account Access Guidelines until policy development is complete.
Key figures
Federal Reserve Board (mentioned as the requesting body)
Reserve Banks (mentioned as decision-makers on access requests)
Sources: federalreserve.gov
