The Federal Reserve Board published a database of financial institutions with access to, or requests to access, Federal Reserve Bank master accounts and services.
Details: In a news release, the Fed said the database:
Is consistent with a 2023 National Defense Authorization Act requirement and will be updated on a quarterly basis.
Has two separate components: for financial institutions with master account access and for those that have requested access since Dec. 23, 2022.
Is also consistent with the Fed’s 2022 proposal for the Reserve Banks to disclose financial institutions with access to master accounts, which the Fed will not finalize because the statutory requirements supersede the agency’s proposal.
Background: A master account is an account in which a Reserve Bank receives deposits for a financial institution, such as a bank or credit union, and provides services such as collecting checks and electronically transferring funds. The Fed’s registry follows its release last year of final guidelines for evaluating institutions applying for Fed master accounts.
ICBA Comments: In a comment letter earlier this year on the agency proposal, ICBA said the Fed should not provide master account access to unregulated and uninsured entities, such as crypto and fintech firms.
Nonbank Impact: The Fed has subsequently denied special-purpose depository institution Custodia Bank’s application to become a Fed member and to have a master account with the Kansas City Fed. ICBA commended the Fed’s response to the Custodia application in a national news release, saying the agency’s actions appropriately safeguard the banking system from the risks posed by institutions with novel charters and the crypto sector.
