WASHINGTON—The Federal Reserve is proposing a new type of “payment account” that would be tailored to meet the limited needs of eligible financial institutions seeking payments and settling services, and it is now seeking comment.
According to the Fed, financial institutions with new business models are seeking access to Federal Reserve payments services.
“To support innovation and promote a safe and efficient payment system, the new payment account would be tailored to meet the limited needs of eligible financial institutions seeking payments and settling services,” the Fed said in a statement. “This tailoring could result in lower risk to the payment system and, as a result, requests for payment accounts could generally receive a streamlined review.”
Not a Master Account
The Fed emphasized its proposed payment account would not be a Fed master account of the kind used now by banks and credit unions to access payment services from the Fed, and that it would pay interest, not have access to Fed credit. It would be subject to balance caps, among other features that separate it from a master account.
In addition, the Fed said, a payment account would not expand or otherwise change legal eligibility for access to payments services from the Fed.
Comments will be due within 45 days of publication of the comment call’s publication in the Federal Register.
