The Clearing House submitted a comment letter in response to the FRB’s notice requesting comment on proposed guidelines to evaluate requests for master accounts or access to financial services at Federal Reserve Banks. The guidelines would provide an overarching framework with a set of principles for the Reserve Banks to use when evaluating access requests from eligible institutions, and are centered on a foundation of risk management and mitigation.
TCH supports the FRB’s efforts to create transparent and uniform guidelines for evaluating requests to access FRB accounts and services, but believes that additional clarification and modifications are needed to ensure the safety and soundness of the Reserve Banks, the payment system, the U.S. financial system, and institutions already permitted access. Broadly, TCH recommends that the FRB:
- Provide an analysis of Section 19(b) of the Federal Reserve Act to clarify the concept of legal eligibility;
- Evaluate requests for access on the same standards that are applied to federally-insured institutions;
- Establish a process by which requests for access by non-federally-insured institutions are evaluated with input from a cross section of Reserve Banks and Board staff;
- Develop a means of ongoing assurance for institutions that are permitted access but are not subject to regular and reliable examination; and
- Incorporate the potential impact to private sector operators, and their customers, that interoperate with Federal Reserve services.
To read the full comment letter please click here.