Due to the important nature of The Clearing House’s role in the U.S. financial system, The Clearing House is highly regulated and is regularly examined by supervisory staff from the Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Under the Bank Service Company Act, The Clearing House, and all of the payments systems it operates including the RTP network, are subject to regulation and examination to the same extent as if the services being provided were being performed by a depository institution that is subject to FRB, OCC or FDIC supervision itself. See, e.g., 12 U.S.C. § 1867(c) (“[W]henever a depository institution that is regularly examined by an appropriate Federal Banking agency, or any subsidiary or affiliate of such a depository institution that is subject to examination by that agency, causes to be performed for itself, by contract or otherwise, any services authorized under this chapter, whether on or off its premises … such performance shall be subject to regulation and examination by such agency to the same extent as if such services were being performed by the depository institution itself on its own premises….”).
Through an arrangement among the federal financial regulatory agencies through the Federal Financial Institutions Examination Council, the FRB acts as the lead examiner of The Clearing House for examinations conducted under the Bank Service Company Act and its authority over The Clearing House, and its operation of the RTP Network, is extremely broad. (See, e.g., 12 U.S.C. § 1867(d) (“The Board and the appropriate Federal banking agencies are authorized to issue such regulations and orders as may be necessary to enable them to administer and to carry out the purposes of this chapter….”).
The Clearing House has also been designated by the Financial Stability Oversight Council as a systemically important financial market utility (SIFMU) under Title VIII of the Dodd-Frank Act and is subject to a heightened regulatory and supervisory regime as a result. While The Clearing House’s regulation and supervision under Title VIII relate specifically to its role as the operator of CHIPS, The Clearing House operates as a single entity in the operation of its payments systems and, therefore, many of the requirements of Title VIII may affect its broader operations.