Proposed Federal Reserve Bank Account Access Guidelines: Proposal Provides Broad Principles for Federal Reserve Banks in Evaluating Whether to Permit Eligible Institutions to Access Federal Reserve Bank Accounts or Services

Sullivan & Cromwell LLP - May 6, 2021

Yesterday, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) released a notice requesting comments on proposed guidelines that would provide a framework for the Federal Reserve Banks to use in evaluating requests by “eligible” institutions to establish accounts at, and obtain other financial services provided by, the Federal Reserve Banks. These accounts and services are core components of the U.S. payments system and, according to the Federal Reserve staff memorandum accompanying the notice, access to these accounts and services increasingly has been sought by institutions with “non-traditional charter types.” According to the staff memorandum, these non-traditional charter types, which have been authorized or are being considered by federal and state authorities, raise interpretive and policy questions regarding whether institutions with such charters should have access to Federal Reserve Bank accounts and services. To address a recent increase in requests and inquiries relating to these accounts and services, the proposed guidelines would provide a “structured, transparent, and detailed framework for evaluating access requests” by all eligible institutions.

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