The Federal Reserve Board has announced a request for public input regarding the creation of a “payment account” that eligible financial institutions could use specifically for clearing and settling payments.
Recent changes in the payments industry have led to new banking models, with some financial institutions seeking access to Federal Reserve payment services. The proposed payment account would be designed to address the limited needs of these institutions, focusing on payments and settlement services. According to the Federal Reserve Board, this approach may reduce risk within the payment system and allow for a more streamlined review process for account requests.
Governor Christopher J. Waller stated, “These new payment accounts would support innovation while keeping the payments system safe. This request for information is a key first step to ensuring that the Fed is responsive to evolutions in how payments are made.”
Unlike master accounts currently used by financial institutions to access Federal Reserve services, payment accounts would not pay interest or provide access to Fed credit. They would also be subject to balance caps and other restrictions that distinguish them from master accounts. The introduction of payment accounts would not alter legal eligibility requirements for accessing Federal Reserve payment services.
The comment period will remain open for 45 days following publication in the Federal Register.