Amicus Brief in Payservices Bank v. Federal Reserve Bank of San Francisco

ICBA told a U.S. appellate court that federal law provides the Federal Reserve Banks with the discretion to deny or grant master account access.

Payservices Bank v. Federal Reserve Bank of San Francisco takes up the question of whether Federal Reserve master accounts must be automatically made available to novel financial institutions not subject to federal prudential oversight. PayServices, a state-chartered novel institution based in Idaho, is arguing for no-questions-asked access to a master account.

The U.S. District Court ruled in favor of the San Francisco Fed, determining that Federal Reserve Banks are under no statutory obligation to grant master accounts to eligible institutions regardless of the institution’s risk profile.

In a friend-of-the-court brief this week with the U.S. Court of Appeals for the Ninth District, ICBA and the Consumer Bankers Association said the district court decided correctly.