The Clearing House joined the Bank Policy Institute to file an amicus brief in the U.S. Court of Appeals for the 10th Circuit opposing a request for rehearing by Plaintiff Custodia Bank. Custodia Bank had sued the Federal Reserve Bank of Kansas City for denying Custodia’s request for a Federal Reserve Master Account. The appellate panel reversed the district court’s holding in favor of Custodia and held that Federal Reserve Banks have discretion under the Federal Reserve Act to grant or deny master accounts.

The Associations’ brief explained that rehearing is unwarranted because the panel correctly interpretated the Act as providing discretion on the Reserve Banks to protect Reserve Banks, taxpayers, financial institutions, and the financial system from undue risk. The brief further argued that, as a matter of sound policy, Reserve Banks must protect against these risks to the Federal Reserve and to the financial system more broadly. To read the full brief click here.