The Federal Reserve Board has detailed final guidelines establishing transparency and factors for Reserve Banks in reviewing Federal Reserve accounts and payment services access requests.
“The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system,” Federal Reserve BoardVice Chair Lael Brainard said.
Per the Federal Reserve, the number of institutions offering new financial products or new charters has grown, with some requesting access to accounts and payment services provided by Federal Reserve Banks.
The guidelines, which are slated to be effective upon publication in the Federal Register, would be used by Reserve Banks to evaluate the requests with transparent and consistent factors.
The new guidelines include a tiered review framework providing enhanced clarity on the level of due diligence and scrutiny Reserve Banks apply to different types of institutions with varying degrees of risk.
The Federal Reserve cited an example in which institutions with federal deposit insurance would be subject to a more streamlined level of review while institutions engaging in new activities still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review.