The Federal Reserve Board is seeking public comment on proposed guidelines to evaluate requests for accounts and payment services at Federal Reserve Banks from non-bank organizations or financial technology companies, or fintechs.
In recent years, new financial products and delivery mechanisms for traditional banking services have emerged, most of them leveraging emerging technologies. Some are from fintechs or other non-bank organizations with novel types of banking charters to support these innovations.
Some of these institutions have requested access to the payments system offered by Federal Reserve Banks. Thus, to provide a transparent and consistent process for all access requests, the Fed is proposing Account Access Guidelines for the reserve banks to evaluate such requests. These guidelines consider the Fed Board’s legal authority and reflect an analysis of its policy goals.
“With technology driving rapid change in the payments landscape, the proposed Account Access Guidelines would ensure requests for access to the Federal Reserve payments system from novel institutions are evaluated in a consistent and transparent manner that promotes a safe, efficient, inclusive, and innovative payment system, consumer protection, and the safety and soundness of the banking system,” Federal Reserve Board Governor Lael Brainard said.
Rep. Patrick McHenry (R-NC), the Republican leader of the House Financial Services Committee, supports the idea.
“I’m glad that the Fed is seeking comment on how best to include financial technology firms in their payment systems,” McHenry said. “Institutions are finding new and creative ways for technology to help traditionally underserved communities and consumers gain access to capital. Today’s announcement by the Fed is a welcome step that recognizes the important role innovation is playing in the way Americans access, utilize and interact with the financial system. I look forward to working with regulators and stakeholders to ensure our regulatory structure continues to support this kind of growth rather than suppresses it.”