Proposed Revisions to the Federal Reserve Policy on Payment System Risk and the Guidelines for Account and Services Requests (payment account), 91 FR 30627, FR Doc 2026-10375 (Part 1 of 3)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30627
Served: May 20, 2026. 1. United Community Banks, Inc., • Hand Delivery/Courier: Same as
Jennifer Everling, Greenville, South Carolina; to acquire mailing address.
Assistant Secretary. Peach State Bancshares, Inc., and • Other Means: publiccomments@
[FR Doc. 2026–10358 Filed 5–22–26; 8:45 am] thereby indirectly acquire Peach State frb.gov. You must include docket
BILLING CODE 6730–02–P
Bank & Trust, both of Gainesville, number in the subject line of the
Georgia. message.
Board of Governors of the Federal Reserve Comments received are subject to
System. public disclosure. In general, comments
FEDERAL RESERVE SYSTEM Michele Taylor Fennell, received will be made available on the
Associate Secretary of the Board.
Board’s website at https://
Formations of, Acquisitions by, and www.federalreserve.gov/apps/
Mergers of Bank Holding Companies [FR Doc. 2026–10425 Filed 5–22–26; 8:45 am]
proposals/ without change and will not
BILLING CODE;P
The companies listed in this notice be modified to remove personal or
have applied to the Board for approval, business information including
pursuant to the Bank Holding Company FEDERAL RESERVE SYSTEM confidential, contact, or other
Act of 1956 (12 U.S.C. 1841 et seq.) identifying information. Comments
[Docket No. OP–1878] should not include any information
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes such as confidential information that
Proposed Revisions to the Federal would be not appropriate for public
and regulations to become a bank Reserve Policy on Payment System
holding company and/or to acquire the disclosure. Public comments may also
Risk and the Guidelines for Account be viewed electronically or in person in
assets or the ownership of, control of, or and Services Requests
the power to vote shares of a bank or Room M–4365A, 2001 C St. NW,
bank holding company and all of the AGENCY: Board of Governors of the Washington, DC 20551, between 9 a.m.
banks and nonbanking companies Federal Reserve System. and 5 p.m. during Federal business
owned by the bank holding company, ACTION: Notice and request for comment. weekdays.
including the companies listed below. FOR FURTHER INFORMATION CONTACT:
The public portions of the SUMMARY: The Board of Governors of the Jason Hinkle, Associate Director, Zineb
applications listed below, as well as Federal Reserve System (Board) is York, Manager, Kristopher Natoli,
other related filings required by the issuing a notice and request for Manager, or Brajan Kola, Lead Financial
Board, if any, are available for comment on proposed revisions to the Institution Policy Analyst, Division of
immediate inspection at the Federal Federal Reserve Policy on Payment Reserve Bank Operations and Payment
Reserve Bank(s) indicated below and at System Risk (PSR Policy), including the Systems; or Corinne Milliken Van Ness,
the offices of the Board of Governors. proposed addition of a new Part IV, to Senior Counsel, or Sumeet Shroff,
This information may also be obtained accommodate the provision by Reserve Senior Counsel, Legal Division, Board of
on an expedited basis, upon request, by Banks of special-purpose accounts that Governors of the Federal Reserve
contacting the appropriate Federal would clear and settle certain payment System: (202) 452–3000. For users of
Reserve Bank and from the Board’s activity (Payment Accounts). The Board TTY–TRS, please call 711 from any
Freedom of Information Office at is also proposing updates to its telephone, anywhere in the United
https://www.federalreserve.gov/foia/ guidelines for Federal Reserve Banks States or (202) 263–4869.
request.htm. Interested persons may (Reserve Banks) to utilize in evaluating SUPPLEMENTARY INFORMATION:
express their views in writing on the requests for access to Reserve Bank
standards enumerated in the BHC Act account and services (Account Access I. Background
(12 U.S.C. 1842(c)). Guidelines or Guidelines) to The Board is seeking comment on a
Comments received are subject to accommodate requests for access to proposal to revise the PSR Policy and
public disclosure. In general, comments Payment Accounts. Finally, the Board is the Account Access Guidelines to
received will be made available without encouraging Reserve Banks to pause accommodate the provision of Payment
change and will not be modified to decisions on requests for Reserve Bank Accounts by Reserve Banks.
remove personal or business accounts and services from institutions This notice is organized into eight
information including confidential, that are Tier 3 under the Account sections. Section I contains background
contact, or other identifying Access Guidelines until the Board has on the Account Access Guidelines and
information. Comments should not completed its policy development the PSR Policy, a description of
include any information such as process on the Payment Account developments in the payments
confidential information that would not proposal. ecosystem since the Board issued the
be appropriate for public disclosure. DATES: Comments must be received on Account Access Guidelines, and an
Comments regarding each of these or before July 27, 20. overview of the Board’s Request for
applications must be received at the ADDRESSES: You may submit comments, Information (RFI) on the Payment
Reserve Bank indicated or the offices of identified by Docket No. OP–1878, by Account prototype. Section II provides
the Board of Governors, Benjamin W. any of the following methods: a summary of comments on the RFI and
McDonough, Secretary of the Board, • Agency Website: https:// the Board’s responses. Section III.A
20th Street and Constitution Avenue, www.federalreserve.gov/apps/ describes the Board’s proposal to offer a
NW, Washington, DC 20551–0001, not proposals/. Follow the instructions for Payment Account and the risk-
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later than June 25, 2026. submitting comments, including mitigating terms of the Payment
A. Federal Reserve Bank of Richmond attachments. Preferred Method. Account.1 Section III.B summarizes the
(Brent B. Hassell, Assistant Vice • Mail: Benjamin W. McDonough,
1 As used in this notice, the phrase ‘‘Payment
President) P.O. Box 27622, Richmond, Secretary, Board of Governors of the
Account terms’’ (and similar phrases) refers to the
Virginia 23261. Comments can also be Federal Reserve System, 20th Street and standard set of parameters of the Payment Account
sent electronically to Constitution Avenue NW, Washington, as proposed by the Board in proposed revisions to
[email protected]: DC 20551. Continued
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30628 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
proposed amendments to the PSR Policy establish a transparent, risk-based, and Reserve Banks. Part III of the PSR Policy
to accommodate the Payment Account. consistent set of factors for Reserve governs the Board’s policy on overnight
Section III.C summarizes the proposed Banks to use in reviewing access overdrafts in Reserve Bank accounts.
amendments to the Account Access requests from legally eligible
B. Developments Since Issuance of the
Guidelines (i) to accommodate the institutions. The Guidelines incorporate Account Access Guidelines
Payment Account, (ii) to update the a tiering framework under which access
review framework to accommodate the requests from certain types of entities The payments ecosystem continues to
Payment Account, and (iii) to introduce (e.g., non-federally insured institutions) evolve rapidly. Technological progress,
timing expectations for reviewing are subject to greater due diligence and statutory developments, consumer and
certain access requests. Section IV scrutiny than access requests from other business preferences, and other factors
requests comment on the proposal as a types of entities (e.g., federally insured are driving both the introduction of
whole and sets out specific questions on institutions). The tiering framework innovative financial products and
which the Board is soliciting the acknowledges the spectrum of services and new approaches to the
public’s input. Section V analyzes the regulatory and supervisory frameworks traditional banking functions of
competitive impact of the proposal. that apply to institutions that may payments, deposit-taking, and lending.
Section VI includes the Board’s analysis request access. For example, federally The Board continues to monitor
of the proposal under the Regulatory insured institutions (Tier 1) are subject developments in the payments
Flexibility Act and the Paperwork to a comprehensive and consistent set of ecosystem, including the development
Reduction Act and includes other federal banking regulations and, in most of new financial products and
administrative law matters. Finally, cases, detailed regulatory and financial technologies. Since the Board issued the
Sections VII and VIII contain the information about these firms is readily Account Access Guidelines, the types of
proposed amendments to the PSR Policy available. These institutions are institutions seeking accounts and
and the Account Access Guidelines, services have continued to evolve.
therefore generally subject to a less
respectively. Several institutions focused on
intensive and streamlined review under
payments innovation have explained
A. Statutory Background, the Account the Guidelines relative to institutions in
that they are interested in direct access
Access Guidelines, and the PSR Policy higher tiers. On the other end of the
to accounts and services, as opposed to
spectrum, non-federally insured
The Reserve Banks may provide having to rely on third-party
institutions that are not subject to
accounts (accounts) and financial intermediaries to access services, to
prudential supervision by a federal
services (services) to institutions as reduce costs to their customers while
banking agency at the institution or
authorized by federal law. Reserve increasing payment processing speed.
holding company level (Tier 3) may be
Banks generally provide accounts and These institutions have also argued that
subject to a supervisory or regulatory
services to member banks, depository direct access to accounts and services
framework that is substantially different
institutions, and branches and agencies would reduce the concentration risk
from the supervisory and regulatory
of foreign banks pursuant to sections created by their reliance on a limited
framework that applies to federally
13(1) and 13(14) of the Federal Reserve number of third-party intermediaries for
insured institutions, and their access
Act (FRA).2 accessing services. Direct access, in
Pursuant to section 11(j) of the FRA, may pose the highest level of risk.
their view, would reduce risks to the
the Board exercises general supervision Accordingly, access requests from Tier 3
overall payment system. Some of these
over the Reserve Banks.3 In supervising institutions receive the strictest level of
institutions have requested either a state
and overseeing the activities of the review under the Guidelines.
or federal banking charter, and a few
Reserve Banks, the Board may issue The PSR Policy addresses the risks
have initiated requests for accounts and
guidance to the Reserve Banks regarding that payment, clearing, settlement, and
services.
the provision of accounts and services. recording activities present to the
Many of these institutions are legally
On August 15, 2022, after a public financial system and to the Reserve
eligible for accounts and services, and
comment process, the Board adopted Banks. In adopting the PSR Policy, the
they are often considered Tier 2 or Tier
the Account Access Guidelines, which Board’s objectives were to foster the
3 institutions under the Board’s
the Reserve Banks utilize in evaluating safety and efficiency of payment,
Account Access Guidelines.6 Some Tier
access requests.4 The Guidelines clearing, settlement, and recording
2 and Tier 3 institutions that have
systems, and to promote financial
requested, or expressed interest in
Regulation A, Regulation D, the Account Access stability more broadly. The PSR Policy
requesting, access have voiced concern
Guidelines and the PSR Policy and as would be consists of three parts.5 Part I sets forth
about the length of time that Reserve
implemented by the Reserve Banks through their the Board’s views and related standards Banks take to review access requests
Operating Circulars and other agreements. regarding the management of risks in
2 The first paragraph of section 13(1) provides and the high likelihood of denial.
that a Reserve Bank ‘‘may receive from any of its
certain payment, clearing, and
member banks, or other depository institutions . . . settlement systems. Part II of the PSR C. Overview of Request for Information
deposits of current funds in lawful money . . . .’’ Policy outlines the methods the Reserve on Payment Account Prototype
12 U.S.C. 342. ‘‘Depository institution’’ is defined Banks use to provide intraday credit,
in section 19(b)(1)(A) of the FRA. 12 U.S.C. On December 23, 2025, the Board
461(b)(1)(A). Section 13(14) of the FRA provides
also known as daylight overdrafts, while published an RFI seeking public input
that, ‘‘[s]ubject to such restrictions, limitations, and controlling credit risk posed to the
regulations as may be imposed by the [Board], each 6 Non-federally insured institutions are Tier 2
[Reserve Bank] may receive deposits from . . . any apply to accounts provided under fiscal agency under the Guidelines’ tiering framework if they are
branch or agency of a foreign bank in the same authority, to accounts authorized pursuant to the subject to federal prudential banking supervision
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manner and to the same extent that it may exercise Board’s Regulation N (12 CFR part 214), to joint and (1) if they are state chartered and have a
such powers with respect to a member bank if such account requests, or to account requests from holding company that is subject to Federal Reserve
branch or agency is maintaining reserves with such designated financial market utilities, since existing oversight (by statute or commitment) or (2) if they
Reserve Bank pursuant to section 7 of the rules or policies already set out the considerations are federally chartered, they have a holding
International Banking Act of 1978.’’ 12 U.S.C. 347d. involved in evaluating requests for these types of company that is subject to Federal Reserve
3 12 U.S.C. 248(j). accounts. oversight (by statute or commitment). All other non-
4 87 FR 51099 (Aug. 19, 2022) (as amended by 89 5 See https://www.federalreserve.gov/ federally insured institutions are Tier 3 under the
FR 100495 (Dec. 12, 2024). The Guidelines do not paymentsystems/psr_about.htm. Guidelines.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30629
on a special-purpose Payment Account days following receipt of all Some commenters discussed whether
prototype tailored to the needs and risks documentation requested by the Reserve the Board could expand legal eligibility.
of institutions focused on payments Bank.11 One commenter requested that the
innovation.7 Board expand eligibility for a Payment
The RFI contemplated that a Payment II. Comments on the Request for
Account to money transmitter license
Account would be designed for the Information 12
holders that meet certain requirements.
purpose of clearing and settling the The Board received 72 comment Another commenter advocated for all
Payment Account holder’s payment letters on the RFI. Commenters regulated stablecoin providers to be
activity, and that Payment Accounts represented several types of institutions eligible for a Payment Account, arguing
would have a common set of risk- and organizations, including (1) non- that nonbank stablecoin providers will
mitigating terms. Consistent with the traditional institutions, including those be at a competitive disadvantage if they
Reserve Banks’ legal authorities, only focused on payments or crypto, along are not eligible for a Payment Account.
institutions that are legally eligible to with their trade associations; and (2) Another commenter argued that
maintain accounts with a Reserve Bank traditional banks, including community providing access to stablecoin issuers
would be eligible to maintain a Payment banks, and their trade associations. should not be done without clear
Account. The Payment Account would Comments on the Payment Account Congressional authorization. A few
be subject to an overnight balance limit. tended to divide along industry lines. commenters noted that decisions by
The Board explained that it was Non-traditional institutions generally other agencies to grant charters to
considering setting the overnight supported the proposal, with many institutions with novel business models
balance limit at the lesser of $500 seeking access to a wider range of would effectively expand the
million or 10 percent of the relevant services or fewer controls. Traditional institutions eligible to request a
Payment Account holder’s total assets.8 banks and related trade associations Payment Account. One commenter
Balances in a Payment Account would generally expressed concerns with the emphasized that any expansion of legal
not receive interest. The RFI also proposal, with many favoring additional eligibility for Reserve Bank account
contemplated that a Payment Account restrictions or controls. access should be addressed by Congress
holder would not have access to Reserve through legislation, and another
Bank credit, either through the discount A. Eligibility commenter supported Congressional
window or through intraday credit. 1. Summary of Comments action to expand eligibility to nonbank
Given the lack of access to intraday payment providers.
credit, Payment Account holders would Several commenters requested the
only have access to services with Board clarify legal eligibility to access 2. Board Response
automated controls to prevent accounts and services. One commenter Federal law—as enacted by
overdrafts: Fedwire® Funds Service, the asserted that legal eligibility remains a Congress—dictates the entities that are
FedNow® Service, the National source of confusion and asked the Board eligible to maintain an account at a
Settlement Service (NSS), and the to specifically address eligibility by Reserve Bank. Currently, any institution
Fedwire Securities Service for transfers institution type. Another commenter that satisfies the legal eligibility
free of payment.9 Payment Account asked the Board to clarify that the requirements for an account under the
holders would not be permitted to act as establishment of a Payment Account FRA or other federal law is eligible to
correspondent banks, and a Payment does not alter the statutory eligibility for request a Master Account. Under the
Account could not be used to settle a a Master Account. proposal, these same institutions (i.e.,
respondent institution’s activity.10 The Some commenters argued that legal those that satisfy the legal eligibility
Board also noted that it was exploring eligibility should be further limited. requirements for an account) would
additional risk controls and conditions Several commenters stated that a Master have the option of requesting either a
to cover areas such as risks to the Account should be limited to Tier 1 Payment Account or a Master Account.
payment system or risks associated with institutions, and a few commenters
illicit finance. stated that a Payment Account should B. General Design of the Payment
The RFI explained that, consistent also be limited to Tier 1 institutions. Account
with a Payment Account’s lower One commenter stated that Payment 1. Summary of Comments
residual risk profile given its mitigating Account eligibility should be limited to
terms, a request for a Payment Account Most of the comment letters received
Tier 1 and Tier 2 institutions. Another provided views about the extent to
would generally receive a more commenter stated that Master Account
streamlined review than a request for a which the Payment Account’s design
eligibility should be limited to Tier 1 would support an eligible institution’s
Master Account from the same and Tier 2 institutions, and that Tier 3
institution. Accordingly, the RFI payment activity, the use cases it would
institutions should only be eligible for best facilitate, and the use cases it might
proposed that a Reserve Bank generally a Payment Account.
would complete its review of a Payment not facilitate.
Account request within 90 calendar Commenters noted that the Payment
11 The RFI acknowledged that additional due
Account’s design could address some,
diligence might be required in some cases. If a
7 See 90 FR 60096 (Dec. 23, 2025).
Reserve Bank needed additional time to complete but not all, of eligible institutions’ core
8 The institution’s total assets would be
its review, the Reserve Bank would be expected to payment needs. Many indicated that
determined by its most recent report to its primary consult with the Board. direct access to services, particularly the
banking regulator or equivalent. 12 As described elsewhere in today’s Federal
9 ‘‘Fedwire’’ and ‘‘FedNow’’ are service marks of
Fedwire Funds Service and the FedNow
Register, the Board is requesting comment on
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the Federal Reserve Banks. A list of marks related proposals to amend Regulation A (12 CFR part 201)
Service, could reduce costs for smaller
to financial services products that are offered to (the Regulation A Notice) so that that Payment institutions and consumers when
financial institutions by the Federal Reserve Banks Account holders would not be eligible to access the considering current transaction fees
is available at FRBservices.org®. discount window and Regulation D (12 CFR part associated with correspondent banking.
10 Section III.A.2 of this notice clarifies that the 204) (the Regulation D Notice) so that balances in
proposed prohibition on Payment Account holders the Payment Account would not earn interest.
The Payment Account was viewed as
acting as correspondent banks refers to that term as Comments on those aspects of the RFI are discussed suitable for more routine, pre-funded
defined in the Reserve Banks’ Operating Circular 1. in the Regulation A Notice and Regulation D Notice. payments by businesses and consumers.
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30630 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
Some of the examples of use cases Payment Account’s prohibition on are processed together.14 As
provided by commenters included correspondent-respondent relationships background, credit originations result in
instant access to wages or refunds, could limit the services Payment a debit to the account of the sending
person-to-person or business-to- Account holders could provide to third bank and a credit to the receiving bank
business transfers, pay-by-bank at parties. (such as for payroll payments). Debit
checkout, payments related to originations result in the reverse: a
stablecoins or other tokenized assets 2. Board Response credit to the account of the sending
and, potentially, the U.S. dollar leg of While the Board recognizes several bank and a debit to the receiving bank
cross-border transactions. Multiple commenters’ desire for Payment (such as for bill payments that a
commenters expressed particular Account holders to have access to the consumer authorizes in advance). If
interest in the benefits of the Payment there is an issue with either a credit or
full range of services, the Board believes
Account for tokenization and debit origination, such as an incorrect
that doing so would undermine the
stablecoins. They argued that a Payment payee or insufficient funds, the
objectives of Payment Accounts as
Account could enable effective transaction must be returned by the
special-purpose accounts designed to
development of tokenization platforms receiver within a specific time frame (up
that facilitate the transfer and settlement minimize risk. The Board’s goal is to to two days later for business payments
of tokenized securities in central bank support private-sector innovation in and up to 60 days later for consumer
money. Other commenters focused on payments while ensuring that the risks payments). Additionally, a bank that
how a Payment Account would improve identified in the Account Access originated an ACH payment could
stablecoin issuer operations through Guidelines continue to be managed reverse the payment if it contained an
better reserve management and issuance prudently. The Board believes that, on error. As a result, a bank whose account
and redemption. Additionally, several balance, this proposal would create a was credited could have its account
commenters noted that a Payment structured framework that would debited in the following days or months
Account could improve functionality by facilitate innovation in areas where due to an issue with the original
fostering stablecoin-dollar fungibility providing Payment Account holders transaction.
and improving interoperability and with direct access to the Fedwire Funds With respect to access to financial
settlement between different Service, the FedNow Service, NSS, and services through Payment Accounts,
stablecoins. Some commenters noted the Fedwire Securities Service for ACH’s unique characteristics materially
improvement in general treasury transfers free of payment would provide alter the relevant considerations
management as a potential benefit of the meaningful value. The Board compared to the Fedwire Funds Service
Payment Account. understands that some commenters do and the FedNow Service. Unlike ACH,
Several commenters asserted that not believe Payments Accounts should those systems are real-time gross
excluding direct access to FedACH have access to NSS or do not identify settlement systems with final and
Services (FedACH) would significantly use cases for NSS access; the Board irrevocable settlement of credit transfers
limit the use cases that the Payment believes, however, that the proposed and real-time reject controls, which
Account could satisfy because of ACH’s Payment Account terms mitigate ultimately allows the Reserve Banks to
prominence in payroll, bill payments, potential risk associated with granting prevent an account holder from making
and business-to-business payments. In access to NSS. Therefore, given the goal individual FedNow Service or Fedwire
addition to pre-funding ACH credit of supporting private-sector innovation, Fund Service payments that would
originations, some commenters the Board believes it is appropriate to overdraw their account. ACH is
expressed a willingness to maintain a make access to NSS an option for a different; it employs deferred
minimum amount of balances or Payment Account holder. settlement, batch processing, and the
otherwise post collateral to mitigate the For the reasons explained in Section provision of returns and reversals for
credit risk of other types of ACH III.A.1 the Board is proposing to exclude both credit and debit transfers would
transactions (for example, when a access to the Fedwire Securities Service require a complex, layered set of ACH
Payment Account receives a debit for delivery versus payment controls to prevent Payment Account
transaction, which would pull funds out transactions. Similarly, Section III.A.2 overdrafts. For example, today, account
of a Payment Account). At least one discusses the Board’s rationale for holders that are subject to enhanced
commenter suggested that Payment prohibiting Payment Account holders credit risk scrutiny by the Reserve
Account holders should be restricted from acting as OC 1 Correspondents or Banks can be required to prefund the
from receiving any debit transaction. OC 1 Respondents (defined in Section value of ACH credits they originate, to
Additionally, commenters offered III.A.2) under the Reserve Banks’ protect against account overdrafts at
varied opinions about how access to Operating Circular 1 (OC 1).13 settlement.15 This control could
other Federal Reserve services, such as likewise be imposed on Payment
NSS and the Fedwire Securities Service, When considering whether to provide Account holders in order to limit the
would affect the use cases the Payment Payment Account holders with access to risk of overdrafts from a Payment
Account could or could not support. FedACH, the Board considered Account holder’s origination of ACH
While one commenter suggested that FedACH’s unique characteristics. credits, but it would only address the
allowing Payment Account holders to Unlike Fedwire Funds Service or
access Fedwire Securities Service’s FedNow Service transactions, banks can 14 The original ACH networks were designed to
delivery-versus-payment functionality originate both credit-push and debit- leverage the Federal Reserve’s existing check
pull ACH payments, commingled into operations, using its infrastructure and
could facilitate movement of Treasury transportation services because the ACH process
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securities, particularly for stablecoin batches containing many payments that paralleled the processing and settlement of checks,
issuers and entities engaged in repo and except that in the case of ACH, ground and air
reverse repo transactions, another 13 As explained in Section III.A.2, OC 1 permits transportation services were used to move magnetic
commenter stated that Payment Account a contractually defined Correspondent-Respondent tapes, punch cards, or printed advices instead of
relationship that differs from a traditional checks.
holders should not have access to either commercial correspondent-respondent relationship 15 The prefunding control automatically sets
the Fedwire Securities Service or NSS. through which a financial institution processes funds aside at the time of origination and earmarks
Finally, one commenter noted that the payments on behalf of its depositors and customers. the funds for use at the time of settlement.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30631
credit risk from that one discrete type of which would be necessary to manage commenters noted that having direct
ACH transaction. credit risk to the Reserve Banks, would access to services through a Payment
The Board believes a minimum dramatically reduce other institutions’ Account would provide them with
balance or collateralization approach ability to manage their own risks. greater operational independence and
would not sufficiently mitigate the Further, restricting debit receipts the ability to design better, more
credit risk from ACH debits received by would remove important use cases from efficient processes.
Payment Accounts, because the Reserve the ACH network for Payment Account A few commenters disagreed that
Banks do not have the ability to predict holders and their counterparties, reducing reliance on intermediaries
debit transactions with sufficient reducing the general utility of ACH. would effectively alleviate barriers to
accuracy or limit the amount of debit Prohibiting Payment Accounts from innovation. Some commenters noted
transactions a Payment Account could receiving ACH debits therefore would that institutions rely on intermediaries
receive to a certain threshold.16 mitigate credit risk to the Reserve Banks for risk mitigation, and that reducing
The only way for Reserve Banks to but result in unacceptable degradation reliance on intermediaries will shift
sufficiently mitigate their credit risk to the function of the ACH network and risk-management obligations entirely
from ACH debit transactions would be have significant negative effects on onto the requesting entity itself, without
to restrict Payment Account holders other participants’ use of the network. reducing the overall need for risk and
from receiving any debit transactions. Based on these considerations, the compliance controls. These commenters
However, it would be unprecedented Board does not believe there is a argued that this approach would move
within the ACH network, and highly reasonable way to allow Payment the responsibility from a supervised
disruptive to the efficient operation of Accounts to access FedACH and bank to an entity that may have less
the network and other participants, to effectively mitigate credit risk to the oversight, fewer resources, or a more
attempt to introduce a broad class of Reserve Banks without disrupting the limited compliance infrastructure.
ACH participants that is generally not ACH network and potentially Some commenters provided
allowed to receive debit transactions but undermining its efficiency and additional observations on the Payment
is allowed to engage in other transaction effectiveness.19 Account’s potential benefits. A few
types.17 The ubiquity of the ACH The Reserve Banks may modify their commenters noted that Payment
network is in part driven by the systems’ controls over time. If the Accounts would increase visibility into
expectation that banks can generally Reserve Banks’ systems’ controls were dollar activity, while another
send and receive debits and credits to to change, the Board might reconsider commenter noted that combined with
all other participants on the network at the suite of services to which Payment digital settlement technologies, Payment
all times, and this expectation is Accounts are given access. In the Accounts can reduce frictions and help
codified in many network rules. interim, institutions seeking access to the U.S. dollar maintain global
Another essential aspect of the additional services may request a Master leadership while enabling innovation
efficiency and ubiquity of ACH is the Account. and cross-border interoperability.
ability to return or reverse transactions
C. Impact on Barriers to Innovation 2. Board Response
for a range of problems after the fact.
Prohibiting Payment Accounts from 1. Summary of Comments The Board believes that the Payment
receiving any ACH debits would In the RFI, the Board asked about Account could support private-sector
undermine a fundamental element of what barriers to payments innovation innovation by reducing (1) the
the ACH network by effectively the Payments Account would eliminate uncertainty, time, and related costs of
eliminating the ability to process returns or alleviate. Many commenters obtaining access; and (2) the reliance on
and reversals for ACH debit transactions indicated that the Payment Account intermediaries. This, in turn, could
originated by a class of ACH would alleviate or eliminate barriers to increase competition in the payments
participants.18 Institutions need the innovation in the payments system. marketplace and allow institutions to
ability to manage effectively the Some of these commenters identified design innovative and efficient services
inherent risks of debit transactions, the reliance on intermediaries as the that better leverage all the capabilities of
including fraudulent or otherwise primary barrier that the Payment the services to which the Payment
unauthorized payments, to ensure the Account will have access. The Board
Account would address, noting that
safety of the payment system. reiterates its expectation that Reserve
firms without Master Accounts must
Restricting the ability of Payment Banks assess access requests against the
currently settle transactions through
Account holders to receive debits,
their existing third-party intermediaries. Account Access Guidelines, and this
16 The Reserve Banks have the ability to share
Commenters indicated that removing would apply to the proposed Payment
information with an account holder about expected this barrier would reduce counterparty Account as well. Payment Account
activity in the account and to warn an account risk, decrease the costs and fees holders would be expected to meet the
holder if its balance is low, but these are associated with accessing services Account Access Guidelines’ risk-
notification mechanisms only and cannot prevent
transactions from overdrawing an account.
through intermediaries, increase the management expectations and have in
17 The restriction against receiving debits is used speed of settlement, and improve the place appropriate operational and risk-
today only in limited cases such as when a bank competitive environment for payment management frameworks.
is merging or closing. services by leveling the playing field for
18 If a Payment Account holder were able to D. Limit on Closing Balances
new entrants. One commenter noted
originate but not receive debits, it could originate
a debit transaction that its counterparty would be that fintech payment providers must 1. Summary of Comments
often rely on the banks with which they
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unable to return if the debit was unauthorized or Over half the comments received
had another issue. The counterparty would have to are competing to provide them with
seek another way to have the Payment Account discussed the RFI’s proposed balance
holder return the affected funds, and in the
correspondent services. Relatedly, some limit. Although the Board received
meantime the counterparty would have to refund its comments on the overall purpose and
own customer for the problematic debit. This 19 To adequately limit access to FedACH, the
dynamic could create significant confusion and Reserve Banks would also not enter into settlement
need for a limitation on overnight
credit risk for other participants in the ACH agreements with payment account holders to settle balances, a large majority of comments
network. interoperator ACH transactions. addressed the balance limit amount, the
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30632 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
methodology for determining the limit, and noted the need for 24/7/365 In reviewing the comments received,
or both. operational continuity during weekends the Board recognizes that calling this
With respect to overall purpose and and multi-day holiday windows. Other limit an ‘‘overnight balance limit’’ could
need, some commenters noted the commenters noted the need for result in confusion about when the limit
importance of a limit to minimize the flexibility, including around events applied, especially whether there would
effects of Payment Accounts on the such as holidays and quarter ends, to be a balance limit during what many
Federal Reserve’s balance sheet; meet the needs of firms that move large businesses consider overnight hours,
discourage the use of Payment Accounts and concentrated amounts (such as but when the FedNow Service or the
as a store of value; and create an payroll firms), and to accommodate Fedwire Funds Service is operational
account that complements, rather than unusual circumstances. Another (e.g., 10 p.m. ET). To avoid any
disrupts, the banking system. One commenter suggested that the asset- potential confusion, the Board refers to
commenter argued that a balance limit based limit set forth in the RFI should the balance limit as a ‘‘Closing Balance
could support monetary policy serve as an upper bound for an activity- Limit’’ in this proposal. While
transmission and mitigate concerns based limit. Other commenters commenters did not specifically raise
about narrow bank dynamics or deposit suggested stress-based limits, such as a questions around when the limit would
flight in periods of stress. Several limit based on an institution’s stressed apply, the Board believes that some
commenters asserted that a balance one-day liquidity needs. comments about the size of the balance
limit was unnecessary because Payment Commenters also raised other limit may also be addressed by
Accounts would not receive interest. suggestions regarding the balance limit. clarifying the mechanics of the limit.
Two commenters suggested that, in lieu One commenter suggested establishing The proposal also clarifies that the
of a limit, Payment Account balances an institution’s balance limit based on balance limit would apply solely at the
could receive interest up to a threshold the business plan it provides to its close of the Federal Reserve’s business
level. chartering authority. Another hours.20
Regarding the limit amount, although commenter suggested establishing a
one commenter viewed the RFI’s limit that increases over time as a The Board has carefully reviewed the
balance limit amount as too high and Payment Account holder demonstrates factors that commenters suggested
another suggested a lower limit during its safe payment operations. Other should be considered in the design and
an initial phase, a substantial number of commenters stated that upward implementation of the Closing Balance
commenters stated that the proposed adjustments to an institution’s limit Limit. In particular, the Board
limit would be too low. Commenters should be subject to established public recognizes that an asset-based limit may
indicated the limit should be set at a standards. Two commenters addressed not reflect a payment-oriented
level that accommodates the actual stablecoin issuers specifically, with one institution’s actual payment needs and
operating liquidity needs of account proposing a limit of 10 percent of that the net benefits of the Payment
holders, and that high-volume payments circulating payment stablecoin supply, Account would be enhanced if the limit
business models may require a greater and the other proposing that a balance were calibrated to an individual
overnight limit to fund opening limit should account for the likelihood institution’s payment activity. However,
settlements. Some suggested that the that dollar-based stablecoins will as discussed in Section III.A.4 the Board
limit would disproportionately impact displace physical currency over time. continues to believe that having a
smaller institutions. One suggested a One commenter suggested that, for uniform upper bound for setting the
uniform limit of $250 to $500 million smaller institutions, the Board could balance limit would mitigate potential
and stated that the suggested level consider calibrating the balance limit risks related to financial stability and
would not have a meaningful impact on and interest rate prohibitions by the implementation of monetary policy.
the Federal Reserve’s balance sheet. One deploying them in complementary As a result, the Board is proposing that
commenter recommended setting the ways, which the commenter stated the relevant Reserve Bank will set an
limit solely at 10 percent of total assets, could preserve the Payment Account’s individual Closing Balance Limit, not to
rather than the lesser of $500 million or purpose, avoid unintended incentives exceed $1 billion, based on the Reserve
10 percent of total assets. Other for intraday volatility and underfunding Bank’s analysis of the Payment Account
commenters suggested raising the accounts, and better align operational holder’s payment flows (if available), in
balance limit to between 25 and 40 resiliency with the Board’s monetary particular at the beginning of the
percent of total assets or a graduated policy objectives. Federal Reserve’s business day, and take
asset-based limit. into consideration periods of time when
Many commenters indicated that the 2. Board Response external sources of liquidity may be
balance limit should be calibrated to an The Board’s goal in proposing a limited, such as during weekends and
institution’s payment activity. special-purpose Payment Account is to holidays.
Commenters noted that, for a payment- support private-sector innovation in
oriented institution, an asset-based limit payments while ensuring that the risks E. Limit on Intraday Credit Access
may not reflect the institution’s actual identified in the Account Access 1. Summary of Comments
payment needs and that such a limit Guidelines continue to be managed
could inhibit growth. They also noted prudently. As further explained in Several commenters said the lack of
that an asset-based limit could cause Section III.A.4, as part of a Payment access to intraday credit would make
inefficiencies and that an activity-based Account’s standard terms, the Board the Payment Account less appealing or
limit could promote the smooth believes that establishing a balance useful for its intended purpose. For
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functioning of the payment system and limit, to be measured at the Federal example, one commenter noted that the
reduce operational risk. Commenters Reserve’s daily close of business, is combination of low balance caps and
provided a variety of suggestions for an important to mitigate potential risks the prohibition on daylight overdrafts
activity-based methodology. Some related to financial stability and the would increase the risk of failed
commenters recommended a balance implementation of monetary policy. payments.
cap commensurate with historical or Many of the comments received
near-term anticipated settlement needs supported this premise. 20 See infra Section III.A.4.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30633
Conversely, multiple commenters reduce settlement risk by shortening result in an appropriately low residual
noted that the lack of intraday credit is settlement chains and lowering reliance risk profile. In particular, the core
an appropriate risk mitigant of the on intermediaries that can amplify the design features of the Payment
Payment Account design. Additionally, impacts of operational outages or Account—including payment service
some commenters suggested that liquidity constraints during stress limitations, no access to Reserve Bank
Reserve Banks implement intraday events. However, other commenters intraday credit, the Closing Balance
liquidity monitoring and tools to reject cautioned that providing direct access to Limit, no interest on balances, and no
transactions that would result in a institutions not subject to the same access to the discount window—would
negative account balance, further regulatory regime as federally insured generally mitigate the risks that
reinforcing the goal of requiring depository institutions could result in Payment Account holders pose to the
prefunding for the Payment Account. heightened risks related to operational Reserve Banks, the payment system, and
resiliency, financial stability, and Bank monetary policy implementation. If
2. Board Response
Secrecy Act (BSA)/Anti Money necessary, a Reserve Bank would retain
The lack of access to intraday credit Laundering (AML) compliance. discretion to impose additional
is a central feature of the Payment Further, a few commenters expressed restrictions on the use of a Payment
Account as proposed. Although concerns that the design of the Payment Account or, if necessary, to terminate
providing intraday credit can foster the Account would increase risks to the the account.
smooth operation of the payment payment system as interconnectedness
system, the Board is proposing to design between Payment Account holders may G. Payment Account Risk Associated
the Payment Account to minimize its create systemic risk and suggested With Illicit Finance
operational complexities and risk setting exposure limits for single 1. Summary of Comments
profile. This design would enable the counterparties. Many of these
Reserve Banks to provide timely, direct commenters provided recommendations Just over half of the comment letters
access to accounts and services to for additional requirements or terms to discussed risks related to BSA, AML,
institutions with novel and diverse which Payment Account holders could and countering the financing of
business models and risk profiles. be subject, such as submitting stress- terrorism (CFT) and related illicit
Prohibiting access to intraday credit testing plans and back-up liquidity finance issues. While nearly all of these
would facilitate this goal by minimizing arrangements, and suggested that strong commenters acknowledged the
credit risk to the Reserve Banks, thus supervision, consistent application importance of the Board considering
reducing the complexity of the risk across Reserve Banks, and the ability to illicit finance risk in the context of the
assessment required for Payment revoke access if risks emerge would be Payment Account, and for Payment
Account requests. essential safeguards. Similarly, other Account holders to have rigorous BSA/
If an institution desires access to commenters emphasized the importance AML/CFT programs, there was
intraday credit, the institution should of explicit and enforceable expectations significant divergence among
consider requesting a Master Account, for operational resilience, governance, commenters in the criteria and
which may provide access to a broader cyber maturity, and compliance to conditions Reserve Banks should apply
range of services but would likely be ensure that the Payment Account does when evaluating illicit finance risks
subject to greater due diligence and not weaken the safety, soundness, or under Principle 5 of the Account Access
scrutiny relative to a request for a integrity of the payments system. Guidelines. Several commenters
Payment Account from the same Lastly, commenters expressed supported Reserve Banks relying on
institution.21 As discussed in Section divergent views on liquidity and capital institutions’ primary state or federal
III.A.1, consistent with some requirements for Payment Account supervisors to supervise and assess an
commenters’ suggestions, the Board holders. Some argued that Payment institution’s BSA/AML/CFT
notes that Payment Accounts would Account holders should be subject to compliance, while other commenters
only be permitted access to those additional liquidity and capital controls supported Reserve Banks having a
services for which the Reserve Banks to manage risk, particularly given their stronger BSA/AML/CFT supervisory
have automated tools to reject potential lack of operational maturity or role over, or imposing additional BSA/
transactions that would result in a limited experience with supervisory AML/CFT conditions on, Payment
negative account balance.22 oversight. Conversely, other Account holders.
commenters recommended that the Among the commenters supporting a
F. Effect of Providing Payment Accounts stronger role for the Federal Reserve,
on the Risks Identified in the Account Federal Reserve tailor such controls to
individual institutions and avoid some argued that the Reserve Banks
Access Guidelines should ensure that Payment Account
imposing onerous requirements that
1. Summary of Comments may impede adoption. holders are compliant with BSA/AML
Commenters expressed differing and Office of Foreign Assets Control
2. Board Response (OFAC) requirements through periodic
views on the effect that providing
Payment Accounts would have on the The Board recognizes commenters’ examinations. Others proposed that
risks identified in the Account Access concerns regarding potential risks Reserve Banks impose additional
Guidelines. Some commenters stated associated with the Payment Account controls, such as prohibiting nested
that the design features of the Payment design. The Board acknowledges that transactions or imposing transaction
Account, such as no daylight overdrafts providing direct access to financial limits until a Payment Account holder
and the Closing Balance Limit, services requires careful attention to the demonstrates compliance over an
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inherently limit credit and liquidity risk profile of requesting institutions extended period. Among the
risks. They further stated that direct and the potential for systemic commenters who supported the Federal
access to the payment system could implications. Reserve relying on the primary federal
The Board does not believe the or state supervisor, many noted that
21 See also infra Section III.A.1. Payment Account would increase state-chartered institutions are required
22 See also supra Section II.B.2 (discussing systemic risk. The Board believes that to maintain BSA/AML compliance
FedACH). the Payment Account’s design would programs and argued that the Federal
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30634 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
Reserve should use compliance with maintain an account with a Reserve would be able to do so for a Payment
these program requirements as evidence Bank, are required to comply with Account as well. Section III.A.3
of the adequacy of an institution’s BSA/ OFAC sanctions requirements. provides examples of these
AML program to avoid creating Institutions eligible to maintain an informational requests, terms, and risk
duplicative compliance regimes. Some account with a Reserve Bank are also mitigating controls.
commenters also raised the concern that generally subject to examination by a
by imposing additional conditions or primary state or federal supervisor to H. Payment Account Request Process
controls, the Federal Reserve might hold assess and determine their BSA/AML 1. Summary of Comments
Payment Account holders to higher and OFAC compliance. Commenters expressed divergent
standards relative to traditional The Board does not believe that a
opinions on whether the 90-day review
institutions to which the Federal Payment Account would present
timeline for Payment Account access
Reserve has historically provided materially different illicit finance risk
requests would provide adequate time
accounts and services through Master than a Master Account because both
for the Reserve Banks to assess risks.
Accounts. Other commenters raised accounts can be used to clear and settle
payments. As discussed in Section Views generally fell into three
concerns that newly chartered
III.A.3, however, the Board is proposing categories: (1) commenters who viewed
institutions may not have history or
to include a term for the Payment the timeline as a significant
experience with effective BSA/AML/
Account that confirms and reinforces improvement that would support
CFT compliance programs.
A few commenters discussed how that Board’s expectation that the innovation; (2) commenters who
new technologies either present new Payment Account holder demonstrates expressed concern that the timeline was
types of illicit finance risk, including, that it effectively mitigates the illicit insufficient for thorough risk
for example, in the form of agentic finance risk of its account access. This assessment; and (3) commenters who
artificial intelligence (AI) in payments, term would clarify that Reserve Banks supported the timeline in principle but
or new opportunities for combatting may implement illicit finance risk raised concerns about consistent
these risks, including, for example, account terms or mitigating controls for enforcement and implementation.
through the use of blockchain Payment Accounts just as they may with Many commenters viewed the 90-day
technology or AI. Master Accounts. review timeline as a significant
Under Principle 5 of the Account improvement over the time it sometimes
2. Board Response Access Guidelines, Reserve Banks are takes Reserve Banks to review requests
The Board agrees that all account expected to evaluate whether provision for Master Accounts, a process which
holders, including any Payment of an account and services to an some commenters described as opaque.
Account holders, must mitigate illicit institution would create undue risk by These commenters noted that the
activity risks of their account access by facilitating activities such as money timeline would materially shorten
complying with federal laws and laundering, terrorism financing, fraud, review times and lower the cost of entry
regulations enacted to combat money cybercrimes, economic or trade and uncertainty for eligible institutions
laundering and the financing of sanctions violations, or other illicit seeking an account and services. One
terrorism. In practice, these means activity (illicit finance). The Guidelines commenter characterized the timeline as
Reserve Bank accountholders must note that the Reserve Bank should a catalyst for innovation.
demonstrate their management of the incorporate into its risk assessment, to Conversely, some commenters
illicit finance risks of their account the extent possible, the assessments of expressed concern that 90 days would
access by having robust BSA/AML and an institution by its state and/or federal provide insufficient time for proper risk
OFAC compliance programs that meet supervisors. In addition, the Guidelines assessment. One commenter argued that
the relevant regulatory and supervisory indicate that the Reserve Bank should reviews must be risk-based and take as
requirements, including those confirm that the institution has long as necessary. Another commenter
administered by the Financial Crimes compliance program(s) consisting of the questioned whether the sufficiency and
Enforcement Network (FinCEN) and BSA/AML components set out in the effectiveness of BSA/AML programs
OFAC. Guidelines and in relevant regulations could be properly assessed within an
Most institutions that are legally and are designed to support compliance expedited 90-day review period.
eligible to maintain an account, with OFAC regulations. Several commenters questioned
including a Payment Account, with a In implementing the Guidelines, the whether the Reserve Banks would
Reserve Bank meet the definition of a Reserve Banks have identified several adhere to the 90-day timeline in a
‘‘bank’’ for purposes of the BSA and, as account terms or risk mitigating controls consistent way. These commenters
a result, are required to maintain a available to Reserve Banks to mitigate suggested that without additional clarity
comprehensive AML program that illicit finance risk. For example, during on eligibility expectations and
includes customer due diligence, its review of an access request, a procedural standards, the Payment
transaction monitoring, and suspicious Reserve Bank may, in its discretion, Account may not be successful. One
activity reporting.23 All U.S. persons, require information to augment that commenter noted that the absence of
including all institutions eligible to received from supervisory assessments procedural standards has the potential
of an institution’s BSA/AML and OFAC to render the 90-day timeline ineffective
23 If an institution requesting a Payment Account compliance programs or otherwise because the RFI did not define what
is not a ‘‘bank’’ under the BSA, a Reserve Bank identified by the Reserve Bank during constitutes a complete account request
should conduct a more extensive review of the its review. Additionally, a Reserve Bank and would allow for extensions.
institution’s illicit finance risk. The Board is
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considering whether it would be appropriate to
may determine, in its discretion, that Another commenter cautioned that the
review access requests from institutions that do not terms or risk mitigating controls are possibility of open-ended extensions
meet the definition of a ‘‘bank’’ under the BSA necessary to reduce the illicit finance could create uncertainty that functions
under the full tiered review framework that applies risk associated with the provision of an as a de facto denial and recommended
to Master Account requests. These institutions may
raise novel risks under the Account Access
account and services to an institution. A that extensions be strictly time-limited
Guidelines, including but not limited to illicit Reserve Bank may implement such and permitted only in exceptional
finance risk. requirements for a Master Account and circumstances.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30635
Several commenters discussed how, if facilitate adequate reviews of Payment requesting that the Board deny the trade
at all, a Reserve Bank’s provision of a Account requests in the proposed associations’ extension request.
Payment Account should influence the timeframe. In addition, the Board has Several commenters discussed the
Reserve Bank’s potential future added a term to the Payment Account to need for consumer and privacy
provision of a Master Account to the provide institutions greater clarity on protections for Payment Account
Payment Account holder. A few what information a Reserve Bank may holders that facilitate retail transactions.
commenters argued for a clearly defined request an institution provide in order These commenters expressed differing
pathway from a Payment Account to to support the Reserve Bank’s analysis views on the appropriate level of
Master Account; some advocated for a of illicit finance risk.25 The Board protection, with some advocating for
defined on-ramp from one to the other. acknowledges concerns about additional safeguards and others
Conversely, other commenters argued extensions and consistent enforcement recommending that such protections be
against such a pathway and stated of the timeline. Consistent with the RFI, tailored to the payment activity or
Payment Account holders should the Board is proposing that if a Reserve commensurate with the Payment
undergo the same level of review as Bank requires additional time beyond Account holder’s overall size or risk
Master Account requests do under the the 90-day period to complete its profile.
Guidelines. review, the Reserve Bank would be
To address these concerns, expected to consult with the Board Additionally, one commenter
commenters made several before extending the review period. As mentioned structural inequities between
recommendations. One commenter further explained in Section III.C.4, the traditional banks and non-traditional
advocated for clearly defined timeline Board believes the consultation process banks, noting that Payment Account
triggers for the 90-day review, including provides an appropriate mechanism for holders would gain direct access to the
transparent pause and clock-stop rules ensuring consistent application of the Federal Reserve payment infrastructure
to enhance consistency and proposed review timelines. Further, the without incurring the regulatory costs
transparency. Another commenter Board, in conducting its general and investments that traditional banks
acknowledged that limited extensions supervision of the Reserve Banks, would have made, undermining competitive
may be appropriate for complex cases monitor the extent to which Reserve fairness. Another commenter suggested
but maintained that reviews should Banks were processing Payment that the proposal could dilute the
generally conclude within three to six Account requests in accordance with payments franchise of insured
months. Some commenters suggested the Guidelines. institutions with Master Accounts and
that the Board publish a standardized In response to comments suggesting that mid-size and community banks
request checklist and release periodic that the Payment Account be designed would face acute competitive pressure.
summary statistics on approvals, as an on- ramp to a Master Account, the 2. Board Response
denials, and typical timelines.24 Board believes that the provision of a
One commenter suggested that the Payment Account should not be an The Board believes the 45-day
Board establish a specific timeline for indication of any future provision of a comment period was reasonable and
Master Account access requests similar Master Account. A request for a Master sufficient for commenters to review the
to the 90-day timeline proposed for Account by a Payment Account holder RFI and provide meaningful input. The
Payment Accounts, arguing that such a would require a full review under the Board also believes it is appropriate to
timeline would provide greater Account Access Guidelines. Although issue this notice, which provides more
transparency and reduce uncertainty in the Reserve Bank would have reviewed information on the proposal, so that the
the application process. the Payment Account holder’s request public has sufficient detail to consider
for a Payment Account under the and comment upon the proposed
2. Board Response Payment Account.
Guidelines, the Reserve Bank would
The Board believes the terms of the have done so in light of the Payment With respect to other commenters’
Payment Account would create a lower Account’s standard terms, which focus on consumer and privacy
residual risk profile relative to a Master substantially limit the range of risks protections, the Board expects all
Account and thereby support the posed. However, the Board accountholders to comply with
proposed 90-day review timeframe. acknowledges that a Reserve Bank’s applicable laws and regulations
Having a clear expected timeframe experience with a Payment Account governing consumer protection.
would create a transparent process and holder could inform its review of a
would help foster consistent evaluation III. Proposal
request for a Master Account.
of Payment Account access requests In response to a comment about A. Proposal To Offer a Payment
across all twelve Reserve Banks. providing timelines for Master Account Account
With respect to illicit finance risk, the requests, the Board proposes that
Board does not have reasonable requests from Tier 1 institutions be The Board is proposing to set forth
evidence to support the assertion that reviewed generally within 45 calendar standard and transparent terms for the
Payment Accounts would pose unique days, as discussed further in Section provision of Payment Accounts by
illicit finance risk. The Board believes III.C.4. Reserve Banks. The Board is proposing
that the Reserve Banks’ experience to create a Payment Account to support
reviewing access requests would I. Other Comments private-sector payments innovation
1. Summary of Comments while prudently managing the risks
24 The Board publishes a list of institutions that identified in the Account Access
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have requested access to Reserve Bank accounts and Several trade associations requested Guidelines.
financial services after December 23, 2022 (or that the Board extend the RFI’s 45-day
had submitted an access request that was pending comment period for an additional 30 The Board encourages Reserve Banks
on December 23, 2022), along with the status of
days. The Board received one comment to pause decisions on access requests
these requests. See Federal Reserve Board, Master from Tier 3 institutions until the Board
Account and Services Database, https://
www.federalreserve.gov/paymentsystems/master- 25 See infra Section II. G 2 and supra Section has completed its policy development
account-and-services-database-about.htm. III.A.3. process on the Payment Account
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30636 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
proposal.26 A pause will allow time for 2 and 3) presents greater and more terms would reduce its residual risk
the public to provide input on the heterogenous risks than federally profile facilitating a more streamlined
proposal, and it will give the Federal insured institutions (Tier 1).28 review relative to the review of an
Reserve the opportunity to consider this Accordingly, the Board believes it is access request from the same institution.
input. A pause also will ensure greater necessary that the Payment Account be Institutions seeking to access intraday
transparency, consistency, and certainty designed with ex ante controls and credit or a broader set of services; to act
for institutions that are seeking access standard terms to mitigate these risks. as an OC 1 Correspondent or OC 1
during this period. The Board requests A Payment Account, as the Board Respondent (defined in Section III.A.2);
that Reserve Banks implement this proposes to define it, would be a or to maintain larger closing balances
temporary pause until the Board has special-purpose account available to would retain the option of requesting a
completed its policy development institutions that are legally eligible to Master Account or to be an OC 1
process with respect to the Payment maintain accounts with a Reserve Bank Respondent.30
Account.27 (regardless of their tier) for the purpose The Payment Account’s terms would
While eligible institutions from any of clearing and settling payments be set out in the Account Access
tier may request a Payment Account, the activity for the institution and its Guidelines, the PSR Policy, the Board’s
Board anticipates that most Payment customers.29 Payment Accounts would Regulation A (12 CFR part 201), and the
Account requesters would be Tier 2 or be a new, optional way for institutions Board’s Regulation D (12 CFR part 204).
Tier 3 institutions. As explained above, to request access to accounts and For convenience, the Board has
access to an account and services by services. As further described in this included a summary of all the proposed
non-federally insured institutions (Tiers notice, the Payment Account’s standard Payment Account terms below:
Implementing
Topic Term document
Eligibility 31 ...................... Institutions that are legally eligible under the Federal Reserve Act or other federal statute to Federal law.
maintain an account at a Reserve Bank and receive services.
Closing Balances 32 ........ Closing balance limits would be set by the Reserve Bank for an individual Payment Account PSR Policy.
based on expected payment activity in the account, not to exceed $1 billion. There would be
no limit on intraday balances in a Payment Account.
Intraday Credit 33 ............ Payment Accounts would not be permitted to access intraday credit. Transactions that would PSR Policy
cause an overdraft would be automatically rejected.
Available Services 34 ...... Only those services for which the Reserve Banks can automatically reject transactions that PSR Policy.
would cause an overdraft would be permitted to settle in a Payment Account (i.e., currently,
the Fedwire Funds Service, the FedNow Service, NSS, and the Fedwire Securities Service
for securities transfers free of payment).
Correspondent Prohibi- A Payment Account holder may not act as a ‘‘Correspondent’’ as defined in the Reserve Bank PSR Policy.
tion 35. Operating Circular No. 1 (OC 1) by permitting other legally eligible institutions to settle their
services activity directly in the Payment Account.
Respondent Prohibi- A Payment Account holder may not act as a ‘‘Respondent’’ as defined by OC 1 by settling its PSR Policy.
tion 36. services activity directly in another institution’s Master Account.
Illicit Finance Risk 37 ...... A Payment Account holder may be required to provide (ad hoc or periodically) information to PSR Policy.
demonstrate its compliance with BSA/AML and OFAC requirements 38.
Discount Window 39 ........ Payment Account holders would not be permitted to access credit from the discount window ..... Regulation A.
Interest on Balances 40 .. Balances in a Payment Account would not receive interest ........................................................... Regulation D.
Excess Balance Account A Payment Account holder would not be permitted to participate in an EBA ................................ Regulation D.
(EBA) Participation 41.
Review Timeline 42 ......... Review of Payment Account requests would generally be completed within 90 calendar days of Account Access
receiving all requested documents. Guidelines.
Under the proposal, Payment (Principle 3 of the Guidelines), financial Payment Account holder to submit
Accounts would have a consistent set of stability (Principle 4 of the Guidelines), information to demonstrate its
terms to mitigate the risks posed to the and the implementation of monetary compliance with BSA/AML and OFAC
Reserve Banks (Principle 2 of the policy (Principle 6 of the Guidelines). A requirements, which would mitigate
Guidelines), the payment system Reserve Bank might also require a illicit finance risk (Principle 5 of the
26 The Board understands that there may be cases 32 Refer to proposed Section IV.B.2.a of the PSR 40 Refer to proposed Regulation D amendment
where extraordinary or unusual circumstances exist Policy, see infra Section VII. (proposed 12 CFR 204.10(b)(3)-(4)), see Regulation
that support a Reserve Bank making a decision 33 Refer to proposed Sections II.F.5 and IV.B.2.b D Notice.
41 Id. An EBA is a limited-purpose account at a
before the Board has completed its policy of the PSR Policy, see infra Section VII.
development process. The Board requests that the 34 Refer to proposed Section IV.B.2.d of the PSR Reserve Bank established for one or more
Reserve Bank consult with the Board in such cases. Policy, see infra Section VII. institutions (participants) that are eligible to earn
27 The Board currently expects the pause to end 35 Refer to proposed Section IV.B.2.e of the PSR interest on balances held at the Reserve Banks.
Policy, see infra Section VII. EBAs are managed by agents that hold Master
on or before December 31, 2026. Accounts. Balances maintained in EBAs may not be
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28 See supra Section I.A for a discussion of the 36 Id.
used for general payments or other activities, but
37 Refer to proposed Section IV.B.2.f of the PSR
different risks reflected in the tiering framework. participants may ask their agents to transfer EBA
29 But see Section III.A.2. Policy, see infra Section VII. balances to another account (such as that of a
38 A Reserve Bank may require similar
30 See Section II.A.2 for further details on OC 1 correspondent) for purposes of making payments.
information when reviewing a Master Account There is no limit on balances that can be
Respondents.
request. maintained in an EBA.
31 Refer to the Account Access Guidelines,
39 Refer to proposed Regulation A amendment 42 Refer to the Account Access Guidelines,
Section 1, Principle 1, see infra Section VIII. (proposed 12 CFR 201.3), see Regulation A Notice. proposed Section 4, see infra Section VIII.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30637
Guidelines). Beyond the Payment have done so in light of the Payment meeting certain creditworthiness
Account’s specified terms, the Reserve Account’s unique terms, which standards.49 These eligibility
Banks would retain discretion to impose substantially limit the range of risks requirements reflect the fact that all
additional restrictions on a Payment posed by the Payment Account. Further, recipients of intraday credit, including
Account, or to remove access to service since Reserve Banks have the discretion collateralized intraday credit, pose some
or close an existing account, on a case- to determine whether to grant a master credit risk to the Reserve Bank.50 The
by-case basis, in the same manner and account, as well as to tailor the terms of Board has intentionally designed the
to the same extent as they can with a Master Account to an institution’s risk Payment Account to minimize its
Master Accounts. profile, conducting a full review operational complexity and risk profile
Under the proposal, requests by Tier according to the Account Access to provide direct access to a basic
2 and Tier 3 institutions for Payment Guidelines would be necessary to account and services to a broader
Accounts, with their standard terms and ensure appropriate calibration of those population of institutions with novel
resulting lower residual risk profile, terms. Holding a Payment Account
and diverse business models and risk
would typically be reviewed by Reserve would not indicate likely approval of a
Banks in a shorter period than Master profiles in a timely manner. Prohibiting
Master Account request, and a Reserve
Account requests from the same Bank would maintain its discretion to access to intraday credit is central to the
institution. However, to the extent a impose terms on the provision of any Board achieving this goal.
Reserve Bank identifies any risk that it Master Account. Nevertheless, the Several additional considerations
cannot evaluate in the proposed 90-day Board recognizes that the Reserve Bank support making intraday credit
review period, the Reserve Bank would may be informed by its review of a inaccessible to Payment Account
consult with the Board about extending Payment Account holder’s request for a holders. For one, institutions seeking
the review period.43 While the Board Payment Account and subsequent Payment Accounts are unlikely to be
believes that the Payment Account experience with the Payment Account subject to the resolution regimes that
terms permit a streamlined review holder when reviewing its request for a accompany federal deposit insurance.
relative to a request for a Master Master Account. Resolution of federally insured
Account from the same institution, depository institutions follows clear,
1. Terms To Mitigate Risk to the Reserve
Reserve Banks would still be expected consistent, and well-established rules
Banks
to use the Account Access Guidelines, for paying Reserve Banks and other
including its tiered review framework, The Board is proposing several terms creditors of a failed institution.51
to review all access requests, regardless for Payment Accounts to manage risks Insolvency regimes applicable to
of account type. to the Reserve Banks (and by extension uninsured Payment Account holders
Payment Accounts and Master to the American public).46 may be new or may involve the
Accounts would be distinct Reserve First, Payment Account holders
application of rarely invoked state and
Bank account types. As described would not be permitted access to
federal laws. Moreover, uninsured
further below, Payment Accounts would intraday credit under the Board’s
proposed revisions to Part II of the PSR Payment Account holders likely would
have a standard set of risk-mitigating not be subject to a framework of
terms designed to create a lower Policy, which governs the amount of
intraday credit, if any, that an prudential supervision and regulation
residual risk profile. Conversely, Master that is as robust as that applied to
Accounts do not have a standard set of institution may receive from a Reserve
Bank.47 In general, the Reserve Banks, at federally insured depository
risk-mitigating terms (although Reserve
their discretion, may provide intraday institutions. Finally, data available to
Banks have discretion to impose terms
credit to institutions with accounts at Reserve Banks may vary across Payment
on Master Accounts). Accordingly, the
Reserve Banks to foster the smooth Account holders. Current credit risk
Board is proposing to define Master
operation of the payment system.48 The monitoring at Reserve Banks relies
Accounts to clarify that they are
Board, however, believes it would be mostly on supervisory information
separate from Payment Accounts. The
proposed definition simply imprudent for the Reserve Banks to received from within the Federal
memorializes the existing characteristics extend intraday credit to Payment Reserve System or from other federal
of a Master Account. Institutions would Account holders. regulators, and similar information on
not be permitted to have both a Payment As described in the PSR Policy, an the full range of potential Payment
Account and a Master Account institution’s eligibility for either Account holders may not be readily
simultaneously, which is consistent uncollateralized or collateralized available. Consideration of the risks
with existing Reserve Bank practice.44 intraday credit (i.e., a positive net debit associated with providing credit to
A Payment Account holder that wants cap) depends, in part, on the institution institutions subject to alternative
a Master Account would have to submit regulatory and resolution regimes would
a new access request to its Reserve 46 The FRA requires the Reserve Banks to remit
require a level of analysis and due
excess earnings to the U.S. Treasury after providing diligence that is likely infeasible in the
Bank, which would review the request for operating costs, payments of dividends, and an
in accordance with the Account Access amount necessary to maintain surplus. 12 U.S.C.
Guidelines. The Board has considered 289(a)(3). 49 See section II.D.1 of the PSR Policy (Eligibility).
comments suggesting that a Payment 47 The Board, in a separate Federal Register Creditworthiness is determined by an institution’s
notice, is also proposing to amend Regulation A to supervisory ratings and, as applicable, its Prompt
Account should be an on-ramp to a prohibit Reserve Banks from providing Payment Corrective Act designation or Foreign Banking
Master Account.45 Although the Reserve Account holders with overnight credit through the Organization (FBO) PSR capital category.
Bank would have reviewed the Payment Discount Window. Regulation A Notice. 50 See also section II.F.5 of the PSR Policy (stating
lotter on DSK8BHNXB4PROD with NOTICES1
Account holder’s request for a Payment 48 Under the PSR Policy, certain institutions are that institutions in weak financial condition should
not eligible for intraday credit. These include Edge refrain from incurring daylight overdrafts).
Account under the Guidelines, it would 51 While federally insured depository institutions
and Agreement Corporations, bankers’ banks that
are not subject to reserve requirements, limited- may, in theory, maintain Payment Accounts, given
43 See infra Section III.C.3.
purpose trust companies, government-sponsored their status as Tier 1 institutions and the proposed
44 See Reserve Banks’ Operating Circular 1
enterprises, and certain international organizations. Payment Account controls, the Board does not
(Accounts), § 2.3, available at FRBservices.org. See section II.F of the PSR Policy (Special anticipate that federally insured institutions will
45 See supra Section II.I.2. situations). seek Payment Accounts.
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30638 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
expedited review period for Payment risks. Today, Reserve Banks mitigate because these relationships pose unique
Account requests. cyber and operational risk through and complex risks.
The Board has considered the strong risk management controls and Under these arrangements, multiple
comments that addressed the RFI’s processes, including a security and OC 1 Respondents can settle debits and
proposal not to permit Payment resiliency assurance program that credits associated with Federal Reserve
Accounts intraday credit access. For the requires institutions to attest to their payments in a single OC 1
reasons explained above and in Section compliance with Reserve Bank security Correspondent’s account. Assessing the
II.E.2, the Board is proposing that requirements.53 Payment Account risks associated with multiple
Payment Accounts would not have holders would be subject to the same institutions settling their transactions in
access to intraday credit, either controls, processes, and attestation the Master Account of a single OC 1
uncollateralized or collateralized. As requirement. Given the Payment Correspondent involves detailed due
such, an institution would need to Account’s proposed simplified diligence. Additionally, if an OC 1
prefund all transactions settling in its operational and risk profile, the Board Correspondent fails or decides to
Payment Account. If an institution abruptly terminate its relationship with
believes Reserve Banks generally should
desires access to intraday credit, the an OC 1 Respondent, the OC 1
be able to assess requesters’ cyber and
institution should request a Master Respondent’s continued access to
operational risks within the proposed
Account. services could be affected and,
Second, and consistent with the lack 90-day review period. particularly when the OC 1 Respondent
of intraday credit access, the Reserve 2. Terms To Mitigate Risk to the is accessing FedACH as an OC 1
Banks would only permit Payment Payment System Respondent, could cause challenges for
Account holders to access, at most, other participants in the payment
services for which the Reserve Banks The Board is proposing a usage system.
can automatically reject transactions restriction for Payment Accounts to The Board believes acting as an OC 1
that would cause an overdraft. reduce their risk to the payment system. Correspondent should be subject to the
Currently, the Reserve Banks can The Board anticipates that a Payment full review associated with the
implement credit-limit monitoring Account holder, like a Master Account provision of a Master Account.
controls to prevent overdrafts at a holder, would use its account to clear Similarly, the Board is proposing that
service-line level for the Fedwire Funds and settle its depositors’ and other Payment Account holders would not be
Service, the FedNow Service, and the customers’ payment activity. However, permitted to act as OC 1 Respondents.
National Settlement Service. In the Reserve Banks’ OC 1 also permits a The Board reiterates, however, that this
addition, the Reserve Banks can prevent contractually defined Correspondent- would not prevent the Payment Account
overdrafts caused by securities transfers Respondent relationship in which an holder from clearing and settling
over the Fedwire Securities Service by account holder may agree to act as a activity associated with its customers’
limiting Payment Account holders to Correspondent (OC 1 Correspondent) payments activity in the Payment
securities transfers free of payment.52 and allow its Master Account to be used Account subject to the Payment
The Board acknowledges the comments to settle certain transactions and service Account’s terms.
suggesting that Payment Accounts be fees for a Respondent (OC 1 The Board considered whether
provided with access to FedACH. As Respondent).54 This OC 1 Payment Account holders should be
discussed in detail in Section II.B.2, the Correspondent-Respondent relationship permitted to be OC 1 Respondents. The
Board does not believe there is a creates a materially different Board recognizes that OC 1 Respondent
reasonable way to allow Payment relationship between the Reserve Bank, relationships may pose lower residual
Accounts to access FedACH and risks, for example lower credit risk to
the OC 1 Correspondent, and the OC 1
effectively mitigate credit risk to the the Reserve Banks, which may result in
Respondent from a traditional
Reserve Banks without disrupting the a more streamlined review than a
relationship in which a financial
ACH network and potentially Master Account request from the same
institution processes payments on
undermining its efficiency and institution under the Guidelines. OC 1
behalf of its depositors and customers. Respondent relationships only permit
effectiveness. If the Reserve Banks were
In particular, in an OC 1 Correspondent- access to a subset of services, although
to change the controls that apply to their
Respondent relationship, an OC 1 FedACH is among those included, while
payment systems such that it becomes
Respondent can submit payment Master Account holders may, if
possible to automatically reject
additional types of transactions that instructions directly to a Federal approved by the Reserve Bank,
would cause an overdraft, the Board Reserve Bank (rather than to its OC 1 potentially access all services and
might reconsider the suite of services to Correspondent), and the debits and potentially access intraday credit.55
which Payment Accounts are given credits associated with those payments Given the potential operational
access, but the Board would expect to settle in the Master Account of the OC complexity that could arise from an
evaluate any potential expansion of 1 Correspondent. The Board proposes institution maintaining OC 1
Payment Account services through that Payment Account holders not be Respondent status, which would be
public comment. permitted to act as either OC 1 subject to a one type of review and
In addition to credit risk, the Account Correspondents or OC 1 Respondents ongoing monitoring while
Access Guidelines include an simultaneously holding a Payment
assessment of a wide range of risks to 53 Under the FedLine Solutions Security and
Account, which would subject to a
the Reserve Banks that can arise from Resiliency Assurance Program each organization, at
least annually, must conduct a self-assessment of its
different type of review and ongoing
lotter on DSK8BHNXB4PROD with NOTICES1
the provision of an account and compliance with the FedLine Security monitoring, the Board is proposing that
services, such as operational and cyber Requirements and attest to having conducted such Payment Account holders not be
self-assessment, as outlined in Appendix A, Section permitted to act as OC 1 Respondents.
52 Free of payment access to the Fedwire 3 of Operating Circular 5. These measures are
intended to help protect against unauthorized
The Board also does not anticipate that
Securities Service means that a participant may
only use the service to make securities transfers that access to FedLine services or transactional data. Payment Account holders would be
will not result in a debit or credit to a Master 54 The Reserve Banks’ Operating Circulars are
Account other than a transaction fee. available at FRBservices.org. 55 See also Section III.A.1.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30639
interested in being OC 1 Respondents Account holder’s compliance with BSA/ limited, such as during weekends and
when they could instead request a AML and OFAC laws and regulations; holidays. The Payment Account holder
Master Account. • Providing the Reserve Bank with would be required by the Reserve Bank
Therefore, given the Board’s goals of copies of audit reports of the Payment to achieve a closing account balance at
creating a Payment Account with a Account holder’s BSA/AML or OFAC or below its Closing Balance Limit by
relatively simple operational and risk compliance programs; the Federal Reserve’s close of business,
profile, the request for which is subject • Meeting regularly with the Reserve as defined in Part II of the PSR Policy,
to a comparatively streamlined review Bank to discuss noteworthy or material and maintain such balance until the
to that of a request for a Master Account BSA/AML or OFAC compliance issues; open of the Federal Reserve’s next
from the same institution, the Board • Notifying the Reserve Bank of any business day.58 The proposal does not
does not believe the risks associated BSA/AML or OFAC enforcement action contemplate that Payment Account
with a Payment Account holder acting taken against the Payment Account balances would be capped during the
as either OC 1 Correspondent or OC 1 holder by a regulatory or supervisory business day. The Board believes an
Respondent can be sufficiently authority; or intraday balance cap would limit a
mitigated. Accordingly, the proposal • Notifying the Reserve Bank of any Payment Account’s utility for clearing
would not permit Payment Account material deficiencies identified