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 2 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.
and settling payments, which is its
holders to act as either OC1 regarding the Payment Account holder’s intended purpose.
Correspondents or OC 1 Respondents as BSA/AML or OFAC compliance Payment Account holders would be
those terms are defined in OC1. programs.56 responsible for managing their account
These illicit finance terms are to ensure compliance with their Closing
The Account Access Guidelines’ consistent with those the Reserve Banks
consideration of risks to the payment Balance Limit. Under the proposal,
already use to mitigate illicit finance Reserve Banks would also implement an
system includes cyber and operational risks associated with Master Accounts.
risks among the payment risk escalating compliance program—
The Board believes potential Payment moving from counseling to service
considerations. As previously discussed Account holders, in particular, would
in Section III.A.1, given the Payment restrictions, and potentially to account
benefit from the transparency provided closure as the incidence or severity of
Account’s proposed simplified by setting out potential illicit finance
operational and risk profile and the breaches of the Closing Balance Limit
terms that a Reserve Bank might impose. increases.59
reliance on the assessments of The Board anticipates that Payment In setting the individual Closing
requesters’ primary supervisors, the Account requesters are more likely to be Balance Limit, the Reserve Bank would
Board believes Reserve Banks can assess subject to weaker or more divergent analyze internal Reserve Bank data on
requesters’ cyber and operational risks supervisory regimes and are more likely the Payment Account holder’s payment
at that time within the proposed 90-day to engage in new or emerging business flows, in particular at the beginning of
review period. lines. Accordingly, Payment Account the Federal Reserve’s business day, and
3. Terms To Mitigate Illicit Finance Risk requesters could pose greater and more take into consideration periods of time
heterogenous risk than federally insured when external sources of liquidity may
Under the Account Access
institutions. The above non-exhaustive be limited such as during weekends and
Guidelines, provision of a Payment
list of potential terms would inform holidays.60 In addition, the Payment
Account should not create undue risk to
potential Payment Account holders of Account holder could provide the
the overall economy by facilitating
the illicit finance mitigants that Reserve Reserve Bank with forecasts and
illicit finance. In consideration of this
Banks may apply to Payment additional information related to
principle and the comments received on
Accounts.57 expected daily variations in payments
the RFI, the Board is proposing to set
out a non-exhaustive list of terms 4. Terms To Mitigate Risk to Financial and growth in payments over time.
available to a Reserve Bank, at its Stability and Monetary Policy Similarly, the Reserve Bank would
discretion, to mitigate illicit finance risk Implementation 58 The business day of Federal Reserve Financial
associated with the provision of a The Board is proposing that the Services is defined in Part II of the PSR Policy. It
particular Payment Account. If Payment Account would be subject to a is the 24-hour period that begins immediately after
requested by the Reserve Bank, a Closing Balance Limit established by the the regularly-scheduled close of business of the
Payment Account holder would be Fedwire Funds Service (on days when the Fedwire
Reserve Bank pursuant to the new Part Funds Service is open) and the FedNow Service on
required to provide information related IV of the PSR Policy proposed by this all other days, including weekends and holidays
to its BSA/AML and OFAC compliance. notice. Under the framework set out in (which, in both cases, is generally 7:00 p.m. ET).
This information would assist the this proposal, an individual Payment For the purposes of the Closing Balance Limit, the
Reserve Bank in its initial or ongoing open of the Federal Reserve business day would be
Account’s Closing Balance Limit, not to the open of the FedNow Service Funds Transfer
assessment of the illicit finance risk exceed $1 billion, would be based on Business Day (generally 7:01 p.m. ET).
associated with provision of the the Reserve Bank’s analysis of the 59 The Board considered whether Reserve Banks
Payment Account. The Reserve Bank Payment Account holder’s expected should rely solely on an account holders’ internal
could require this additional controls to ensure balance limit compliance or, on
payment flows, in particular at the the other hand, if Reserve Banks should
information on an ad hoc or periodic beginning of the Federal Reserve’s immediately restrict access if an account holder
basis depending on its individualized business day, and take into violated its limit. The Board believes the proposed
assessment of the institution. These consideration periods of time when approach strikes the right balance of ensuring
informational requirements could compliance while not overly penalizing an account
external sources of liquidity may be holder for isolated violations of its limit.
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include: 60 A Reserve Bank would not have internal data
• Providing the Reserve Bank with an 56 Reserve Banks may request independent
to conduct this analysis at account opening. The
independent, third-party assessment of assessments, attestations, and audit reports on an ad Reserve Bank, however, would have obtained
the Payment Account holder’s BSA/ hoc basis or on an ongoing basis at a frequency information to review the institution’s Payment
determined by the Reserve Bank. Account request under the Account Access
AML and OFAC compliance programs; 57 The Board reiterates that Reserve Banks retain Guidelines. The Reserve Bank should rely on this
• Providing the Reserve Bank with an their discretion to implement illicit finance controls information to conduct its analysis to set the initial
attestation regarding the Payment for Master Accounts and OC 1 Respondents. Closing Balance Limit.
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30640 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
review each Payment Account’s holders from commercial bank deposits is proposing that the Reserve Bank
individual Closing Balance Limit at to support higher intraday balances in would take into account the Payment
least annually using Reserve Bank data Payment Accounts.61 Account holder’s individual
and any additional information The Board believes that paying zero circumstance in setting the individual
provided by the Payment Account interest on Payment Account balances Closing Balance Limit, up to a limit of
holder. and establishing the Closing Balance $1 billion.
Limiting the closing balances of Limit would support the goal of limiting Finally, the proposal acknowledges
Payment Accounts would mitigate risks balances in Payment Accounts. During that, in unusual circumstances, the
posed by Payment Accounts to the normal market conditions, it is likely Reserve Banks may temporarily permit
financial sector and overall economy. that a zero interest rate would an institution to exceed its individual
The Board continues to believe that incentivize Payment Account holders to Closing Balance Limit. The Reserve
provision of an account and services to minimize Payment Account balances to Bank would require the Payment
an institution should not create undue the lowest level practical to manage Account holder to provide a reasonable
risk to the stability of the U.S. financial their payment flows. During periods of explanation for why it is seeking to
system. As discussed above, the general market stress, Payment Account temporarily exceed its Closing Balance
Payment Account is designed as a holders may prefer to hold higher Limit. The Board believes that requests
special-purpose account for clearing and account balances than during non-stress to temporarily exceed the Closing
settling the Payment Account holder’s periods, regardless of the interest rate Balance Limit should be granted only
payment activity and not for the store of paid on the Payment Account. In rarely. For example, a Payment Account
value. However, Payment Account addition, there may be periods where holder could anticipate larger than
holders may seek to hold balances in the Payment Account holder has normal payment outflows and request to
excess of those needed for payments in idiosyncratic incentives to hold higher temporarily exceed its Closing Balance
the Payment Account. Such a scenario balances at a Reserve Bank. In these Limit to maintain the smooth flow of
could have negative financial stability periods, the Closing Balance Limit payments. Given the reasons for limiting
implications. In particular, during would further support minimizing Payment Account balances explained
periods of market volatility or stress, balances in Payment Accounts. above, the Reserve Bank would be
and in the absence of a Closing Balance Together, these two Payment Account expected to consult with the Board if
Limit, Payment Account holders might terms—paying zero interest and the the requested temporary Closing
quickly increase Payment Account Closing Balance Limit—support the Balance Limit exceeds $1 billion. The
balances at a Reserve Bank, which could Board’s goal of minimizing the direct Reserve Bank would be expected to
rapidly drain balances from other effects of Payment Accounts on the consult with the Board if it temporarily
account holders. A rapid decrease in the Federal Reserve balance sheet to only permitted a Payment Account’s closing
amount of reserves that account holders what is needed for efficient and balance to be equal to or less than $ 1
can access could increase money market effective implementation of monetary billion (but, in excess of its Closing
rate volatility. policy. Balance Limit) for two consecutive
Furthermore, a Closing Balance Limit In proposing the maximum size of the Federal Reserve business days.
would help the Federal Reserve Closing Balance Limit, the Board
maintain an overall balance sheet that is completed a distributional analysis of B. Proposed Changes to the PSR Policy
consistent with its monetary policy closing balances data for existing The Board is proposing to amend the
implementation framework. Consistent Reserve Bank accounts over the past five PSR Policy to provide transparency
with the Board’s proposal to amend years and found that $1 billion would around certain standard terms that
Regulation D, the Board has considered be equal to or greater than would apply to accounts that Reserve
the effects of limiting balances in approximately 97 percent of account Banks provide to legally eligible
Payment Accounts on monetary policy closing balances over the review institutions.63 The Board believes that
implementation. As discussed in greater period.62 such transparency would benefit
detail in the Board’s Federal Register In determining the appropriate institutions as they make decisions
notice proposing to amend Regulation D maximum Closing Balance Limit, the around business structure and potential
to prohibit Payment Account balances Board considered several options, account usage.
from earning interest, the contained size including setting the limit to zero. The
of Payment Accounts would help ensure Board believes a limit of zero would be 1. Proposal to Add Part IV to the PSR
that their direct effect on Federal inconsistent with a Payment Account Policy
Reserve liabilities would be modest and holder’s need to prefund its payment The Board believes the PSR Policy is
that the Federal Reserve will not have activity for the beginning of the next the most appropriate existing Federal
to expand its balance sheet significantly business day. For example, the FedNow Reserve policy to document these
beyond what would otherwise be Service operates 24 hours a day, and the account terms. The PSR Policy already
needed to efficiently and effectively Fedwire Funds Service currently covers certain activities that occur in
implement monetary policy. However, operates 22 hours a day. Because accounts, such as risks associated with
the indirect effect of Payment Accounts Payment Accounts will not have access
on other Federal Reserve liabilities is to intraday credit, Payment Accounts 63 The accounts covered by the proposed Part IV
difficult to assess and would depend on will need to maintain a sufficient are distinct from the accounts that Reserve Banks
several factors, including: the balance in the account to settle provide (i) as depository and fiscal agent, such as
characteristics of the Payment Account those provided for the Treasury and for certain
payments. The Board was also informed government-sponsored entities (12 U.S.C. 391, 393–
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holders (i.e., their balance sheet by the comments it received on the RFI 95, 1823, 1435), (ii) to certain international
composition and business models), the when determining the Closing Balance organizations (22 U.S.C. 285d, 286d, 290o–3, 290i–
form of substitution into Payment Limit amount. For the reasons explained 5, 290l–3), (iii) to designated financial market
Accounts from other means of payment utilities (12 U.S.C. 5465), and (iv) pursuant to the
above and in Section II.D.2, the Board Board’s Regulation N (12 CFR part 214), excess
(e.g., deposits at depository institutions, balances accounts (12 CFR 204.10(d)), and joint
physical currency), and the amount of 61 Regulation D Notice.
accounts described in the Board’s Guidelines for
sweeping activity of Payment Account 62 See Appendix I. Evaluating Joint Account Requests.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30641
the incurrence of intraday or overnight Access Guidelines, Part IV of the PSR balance in real time to automatically
overdrafts in Master Accounts. More Policy would include them all for reject any transactions that would create
importantly, the PSR Policy focuses on completeness and transparency. The an overdraft.
risks associated with payments, terms discussed in proposed Part IV
C. Proposed Revisions to the Guidelines
clearing, and settlement. Each of these relate to (a) closing balances, (b) interest
activities is fundamental to Reserve on overnight balances, (c) access to Given that Reserve Banks’ access
Bank accounts and services. The Board Reserve Bank credit, (d) access to decisions can have implications for a
is proposing to introduce a new Part IV Reserve Bank financial services, (e) wide array of Federal Reserve policies
to the PSR Policy to outline the types of account usage restrictions, (f) excess and objectives, the Board continues to
accounts that Reserve Banks provide to balance account participation, and (g) believe that a structured, transparent,
legally eligible institutions, and certain illicit finance risk. and detailed framework for evaluating
standard terms that Reserve Banks apply In addition to serving as a resource to access requests benefits the financial
to these accounts. summarize Payment Account terms that system broadly. Such a framework also
are implemented through other helps foster consistent evaluation of
a. General Terms and Master Account regulations or policies, proposed Part IV access requests, from both risk and
Terms would itself implement certain Payment policy perspectives, across all twelve
Proposed Part IV would include Account terms. First, Part IV would Reserve Banks.
general terms that apply to both Master require Reserve Banks to establish the A Payment Account request would be
Accounts and Payment Accounts. In proposed Closing Balance Limit as evaluated using the same principles as
recent years, some institutions have described in Section III.A.4. Part IV a request for a Master Account. The
requested that Reserve Banks recognize would also clarify that Payment Board considered making changes to the
third-party interests in Master Accounts. Accounts would not have limits on risk-based principles set out in the
For example, some institutions have intraday balances. In addition to the Account Access Guidelines to
requested accounts to hold funds in a proposed changes to Part II discussed accommodate the Payment Account, but
trustee or fiduciary capacity. Reserve below, Part IV would prohibit Payment believes it appropriate to propose no
Banks do not maintain Master Accounts Account holders from accessing amendments at this time.
for the benefit of anyone other than the intraday credit (also known as daylight
1. Proposed Revisions to the Review
accountholder and, as such, do not overdrafts). Relatedly, Part IV would
Framework To Accommodate Payment
recognize third-party interests in Master provide that a Payment Account would
Accounts
Accounts. Accordingly, Part IV would only have access to those services in
state that Reserve Banks do not which the Reserve Banks can As discussed in Section III.A of this
recognize third-party interests in Master automatically reject transactions that notice, the Payment Account, by design,
Accounts and would not recognize them would cause an overdraft. The Board’s would have a lower residual risk profile
in the proposed Payment Account. proposal to restrict a Payment Account than a Master Account due to the
Proposed Part IV would also state that from being an OC 1 Correspondent or proposed Payment Account terms.
an institution may only maintain one OC 1 Respondent would also be Additionally and consistent with the
account except in very limited implemented through Part IV.65 Part IV Account Access Guidelines, the Board
circumstances. For example, following a would also outline a set of non- expects the Reserve Banks would
merger, a bank may maintain two exhaustive, discretionary illicit finance incorporate, to the extent possible, the
accounts for up to a year. The proposal mitigants available to Reserve Banks. assessments of an institution’s primary
to limit institutions to one account and Finally, the Board would include a supervisor into its independent
the exceptions to the one-account rule provision in Part IV, similar to that for assessment of the institution’s risk
are consistent with the Reserve Banks’ Master Accounts, reiterating the Reserve profile. Therefore, the Board is
existing account agreement.64 Banks’ discretion to impose other proposing that requests for a Payment
Finally, as explained in Section III.A., Payment Account terms to manage the Account receive a more streamlined
the Board is proposing to clarify that risks identified in the Guidelines. review relative to the same institution
Master Accounts do not have a standard requesting a Master Account.67
2. Revisions to Part II
set of risk-mitigating terms (although 2. Proposed Timing Expectations for
Reserve Banks have discretion to In addition to the standard account
terms set out in the new proposed Part Reviewing Access Requests
impose terms on Master Accounts) and
are separate from Payment Accounts. IV, the Board is proposing changes to The Board believes that setting
Section II.F of the Board’s PSR Policy. expectations about the period within
b. Payment Account Terms Specifically, the Board proposes to which a Reserve Bank would grant or
As discussed in Section III.A of this revise Section F (Special Situations) of deny an access request would give
notice, the Payment Account is Part II (Federal Reserve Intraday Credit requesting institutions clarity on the
designed with a standard set of risk- Policies) of the PSR Policy to clarify that resources and time needed for the
mitigating terms that create a lower institutions granted a Payment Account evaluation process. While target dates
residual risk profile to the relevant would not be eligible for intraday credit are useful, the Board also believes that
Reserve Bank, the payment system, and and would only have access, at most, to the differences across access requests,
to monetary policy implementation those services for which the Reserve which would involve different charter
relative to a Master Account. Proposed Banks can automatically reject types, business models, regulatory
Part IV describes these standard transactions that would cause an regimes, and risk profiles, preclude
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Payment Account terms. While some of overdraft.66 Reserve Bank systems specification of rigid timelines. Instead,
the terms in Part IV of the PSR Policy would monitor the institution’s account
67 While Payment Account requests will receive
would be implemented through 65 See infra Section III.A.2. a more streamlined review than a Master Account
Regulations A and D and the Account 66 Currently, those services are the Fedwire Funds request from the same institution due to the
Service, the FedNow Service, the National Payment Account’s lower residual risk profile, the
64 See Reserve Banks’ Operating Circular 1 Settlement Service, and the Fedwire Securities Board reiterates that the Guidelines’ tiered
(Accounts), § 2.3, available at FRBservices.org. Service for securities transfers free of payment. framework would continue to apply.
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30642 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
the Board believes that the tiering expectations to institutions seeking services to a Payment Account holder
framework and the Payment Account’s accounts and services. for use of FedNow in an OC 1
risk controls permit the creation of The Board considered setting the time Respondent capacity, are there
indicative timelines. periods from the date on which an particular or unique risks the institution
First, the Board is proposing that the institution first requested access. The should consider in deciding whether or
review of any requests for accounts and Board understands that some not to offer such services?
services from Tier 1 institutions, commenters may express concern that 4. The Board is proposing that the
including a Master Account or Payment Reserve Banks will continually request Closing Balance Limit be established
Account access request, should be new documents to extend the review based on an institution’s expected
completed within 45 calendar days after timeline. However, the Board believes payment activity at the beginning of the
the Reserve Bank receives all requested that setting the timeline from the date Federal Reserve’s business day, not to
documentation. The proposed time an institution submits its access request exceed $1 billion.
would not give the Reserve Banks a. Is $1 billion an appropriate
period reflects the less intensive and
sufficient time or information to review maximum for the Closing Balance
more streamlined review for Tier 1
an institution’s request. In many cases, Limit?
institutions under the Guidelines’ b. Are there effects of limiting closing
tiering framework. Because detailed institutions do not submit sufficient
documentation with their access request balances in Payment Accounts that the
regulatory and financial information Board has not identified?
would be available for most Tier 1 to facilitate the Reserve Banks’ review
under the Guidelines. 5. The proposal does not include
institutions, the Board believes review specific illicit finance requirements in
of a Tier 1 institution’s access request For Master Account requests from
Tier 2 and Tier 3 institutions, the Board connection with a Payment Account
should take less than 45 calendar days request. Should there be requirements
once the Reserve Bank receives all believes that the nature of the relevant
variables—including the variety of for institutions that are not federally
documents. The Board, however, is insured? For example, if an institution
proposing 45 calendar days to charter types, business models,
regulatory regimes, and risk profiles— requesting a Payment Account were not
accommodate those requests where a federally insured, should the institution
Reserve Bank may need additional time, precludes specification of a single
timeline. As a result, the Board is not be required to submit an attestation that
for example, if there have been recent it is a ‘‘bank’’ under the BSA or be
material changes to an institution’s setting an indicative timeline for
Reserve Bank reviews of these access required to submit an assessment of its
business model. BSA/AML and OFAC compliance
requests. The Board would continue to
The Payment Account’s standardized monitor the length of Reserve Banks’ programs from an independent third-
controls and limitations would reduce individual reviews. party, or should the Reserve Bank be
its residual risk profile and thereby required to confirm that the BSA/AML
facilitate a more streamlined review IV. Request for Comment and OFAC supervisory and regulatory
relative to the review of a request for a The Board requests comments on all regime of the institution is comparable
Master Account from the same aspects of the proposed changes to the to that of a federally insured institution?
institution. The Board believes it would Account Access Guidelines and the PSR 6. Should the Board make any
be appropriate for Reserve Banks Policy. Further, the Board specifically changes to the existing tiering
generally to evaluate Payment Account seeks comment on the following aspects framework in connection with the
access requests, under the Guidelines’ of the proposal: Payment Account proposal and the
tiered framework, from Tier 2 and Tier 1. Would the design of the Payment proposed amendments to the
3 institutions within 90 calendar days of Account, as updated from the RFI, Guidelines?
receiving all requested support eligible institutions’ payment 7. Is the proposed timeline for
documentation.68 Reserve Banks would activity and be an attractive account reviewing access requests from Tier 1
consult with the Board if their review of option? institutions appropriate? Should the
a Payment Account request might take 2. The Board is proposing to establish Board consider setting timelines for
longer than the 90-calendar day period. the Closing Balance Limit in a new Part reviewing other access requests from
IV of the PSR Policy. Tier 2 and Tier 3 institutions?
The proposal contemplates that
Reserve Banks would consult with the a. Given that paying zero interest and V. Competitive Impact Analysis
Board when the review of an access limiting closing balances on Payment
Accounts both serve a similar function When considering changes to an
request might take longer than the existing service, the Board conducts a
contemplated time period. Each and have important interactions, should
the Board consider codifying the competitive impact analysis to
institution is unique, and in certain determine whether there would be a
instances, an institution’s request might Closing Balance Limit in Regulation D?
Why or why not? direct and material adverse effect on the
require more time than the proposed ability of other service providers to
indicative timelines. In such cases, the b. Are there important interactions
between limiting closing balances and compete effectively with the Federal
Board would expect the Reserve Bank to Reserve in providing similar services
explain the efforts it has made to meet paying zero interest on Payment
Accounts that the Board has not due to differing legal powers or the
the relevant review period, why it has Federal Reserve’s dominant market
been unable to meet the review period, identified?
3. The Board is proposing to restrict position deriving from such legal
and the time expected to complete its differences.69 Consistent with this
a Payment Account from being an OC 1
review. The Board believes the proposal
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Correspondent or OC 1 Respondent for policy, the Board typically conducts a
would provide sufficient flexibility to competitive impact analysis when it
any service to which Payment Accounts
Reserve Banks while giving clearer
have access. Should a Payment Account
69 See Federal Reserve Board, The Federal
68 An institution’s delay or failure to provide
holder be permitted to access the
Reserve in the Payments System (issued 1984, rev.
documents requested by the Reserve Bank might
FedNow Service as an OC 1 1990 and Jan. 2001), https://
result in a delay in the Reserve Bank’s review of its Respondent? If an institution were www.federalreserve.gov/paymentsystems/pfs_
access request. permitted to offer OC 1 Correspondent frpaysys.htm.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30643
proposes amendments to the PSR with a proposed rule, the RFA generally accommodate the Payment Account are
Policy. requires an agency to prepare an Initial not applicable), OC 1 Respondent status,
With respect to the proposed Regulatory Flexibility Analysis (IRFA) or not requesting access. The proposed
amendments to Part II.F of the PSR describing the impact of the rule on changes to the PSR Policy, therefore,
Policy (which would specify that small entities, unless the head of the would not impose mandatory
Payment Account holders do not have agency certifies that the proposal will requirements on any small entities. The
access to intraday credit), the Board not have a significant economic impact Board invites public comments on all
believes that there would be no adverse on a substantial number of small entities aspects of this IFRA.
effects to other service providers and publishes such certification along
resulting from the proposed changes to with a statement providing the factual 1. Reasons Action Is Being Considered
the PSR Policy because the proposed basis for such certification in the As discussed in this notice, the Board
changes do not materially change the Federal Register. An IRFA must contain is proposing to revise the PSR Policy to
current approach of the PSR Policy—the (i) a description of the reasons why accommodate the provision of Payment
amendments would continue to limit action by the agency is being Accounts by Reserve Banks.
intraday credit access to institutions considered; (ii) a succinct statement of
eligible for regular access to the the objectives of, and legal basis for, the 2. Objectives of and Legal Basis for the
discount window. proposal; (iii) a description of, and, Proposal
With respect to proposed new Part IV where feasible, an estimate of the As discussed in this notice, the
of the PSR Policy (which would outline number of small entities to which the proposed changes to the PSR Policy
the types of accounts that the Reserve proposal will apply; (iv) a description of would implement certain proposed
Banks provide to legally eligible the projected reporting, recordkeeping, terms of the Payment Account, most
institutions, and certain standard terms and other compliance requirements of notably the Closing Balance Limit, terms
that the Reserve Banks apply to these the proposal, including an estimate of to mitigate illicit finance risk, the
accounts), the Board is not conducting the classes of small entities that will be intraday credit restriction, the limitation
a competitive impact analysis. Under subject to the requirement and the type of services to those in which the Reserve
Board policy, the Board conducts a of professional skills necessary for Banks can automatically reject
competitive impact analysis when it preparation of the report or record; (v) transactions that would cause an
considers ‘‘an operational or legal an identification, to the extent overdraft, and the OC 1 Correspondent
change, such as a change to a price or practicable, of all relevant Federal rules and OC 1 Respondent restrictions.
service, or a change to Regulation J, if that may duplicate, overlap with, or Section 11(j) of the Federal Reserve
that change would have a direct and conflict with the proposal; and (vi) a Act authorizes the Board to exercise
material adverse effect on the ability of description of any significant
other service providers to compete general supervision over the Reserve
alternatives to the proposal that Banks, including their provision of
effectively with the Federal Reserve in accomplish its stated objectives and
providing similar services due to accounts and services.73 Pursuant to this
minimize any significant economic authority, the Board issued the PSR
differing legal powers or constraints or impact of the proposed rule on small
due to a dominant market position of Policy to support its objective to foster
entities.72 the safety and efficiency of payment,
the Federal Reserve deriving from such While the Board does not believe that
legal difference.’’ (emphasis added).70 clearing, settlement, and recording
the proposed changes to the PSR Policy systems and to promote financial
This policy is focused on the role of the would have a significant economic
Reserve Banks in their provision of stability, more broadly. The proposed
impact on a substantial number of small changes to the PSR Policy would further
financial services, such as the Fedwire entities, and regardless of whether the
Funds Service, the Fedwire Securities these objectives.
RFA applies to the PSR Policy per se,
Service, and the FedNow Service, that the Board has nevertheless prepared the 3. Description and Estimate of the
compete with private-sector financial following IRFA with respect to the Number of Small Entities
services. Financial services are distinct proposed changes to the PSR Policy.
from an account, which at, its core, is The SBA has adopted size standards
The Board believes that the proposed for determining whether a particular
a record of rights and obligations changes to the PSR Policy to
between an account holder and its bank. entity is a ‘‘small entity’’ for purposes of
accommodate the provision of Payment the RFA. The Board believes that the
With the proposed introduction of Part Accounts by Reserve Banks will not
IV, the Board is thus not considering a most appropriate SBA size standard to
have a significant economic impact on apply in determining whether a member
change to any of the Reserve Banks’ a substantial number of small entities.
services (or Regulation J). Accordingly, bank, depository institution, or branch
First, Payment Accounts would be a or agency of a foreign bank is a small
the Board is not conducting a new, optional way for institutions to
competitive impact analyses in entity is the SBA size standard for
request access to Reserve Bank accounts ‘‘commercial banking.’’ Under this
connection with the proposed and services, and therefore no existing
introduction of Part IV. standard, an entity engaged in
account holders would be affected. commercial banking is considered a
VI. Administrative Law Matters Second, institutions would retain the small entity if it has total assets of $850
option of requesting a Master Account million or less.74
A. Regulatory Flexibility Act (for which the proposed changes to
The population of relevant
The Regulatory Flexibility Act, 5 institutions could potentially include all
U.S.C. 601 et seq. (RFA), requires an company, or savings and loan holding company
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with total assets of $850 million or less. See 13 CFR institutions that (1) are legally eligible
agency to consider the impact of its for a Payment Account, and (2) do not
121.201. Consistent with the SBA’s General
rules on small entities.71 In connection Principles of Affiliation, the Board includes the have a Master Account or settle
assets of all domestic and foreign affiliates toward transactions in a correspondent’s Master
70 Id. the applicable size threshold when determining
71 Under regulations issued by the U.S. Small whether to classify a particular entity as a small
entity. See 13 CFR 121.103. 73 12 U.S.C. 248(j).
Business Administration (SBA), a small entity
includes a depository institution, bank holding 72 5 U.S.C. 603(b)–(c). 74 See 13 CFR 121.201.
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30644 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
Account.75 The Board estimates that, as optional way for institutions to request requirements and burden estimates
of the end of 2025, there are access to accounts and services, and the should be sent to the addresses listed in
approximately 7,000 small entities, of proposed changes to the PSR Policy the ADDRESSES section. A copy of the
which 6,800 already have a Master would not impose mandatory comments may also be submitted to the
Account or access to services. requirements on any small entities. OMB desk officer: By mail to U.S. Office
Accordingly, the Board estimates that Therefore, the Board believes that of Management and Budget, 725 17th
there are approximately 200 small proposed changes to the PSR Policy will Street NW, #10235, Washington, DC
entities that the proposed amendments not have a significant economic impact 20503 or by facsimile to (202) 395–5806,
to the PSR Policy might affect, were on substantial number of small entities Attention, Federal Banking Agency Desk
these small entities to decide to request supervised by the Board. Officer.
Payment Accounts. The Board welcomes comment on all
Proposed Implementation of the
aspects of its analysis. In particular, the
4. Description of Compliance Following Information Collection
Board requests that commenters
Requirements describe the nature of any impact on Collection Title: Disclosure Provisions
The proposal to establish a Closing small entities and provide empirical Associated with the Payment System
Balance Limit for Payment Accounts in data to illustrate and support the extent Risk Policy and Account Access
the PSR Policy would impose additional of the impact. Guidelines.
compliance requirements on institutions Collection Identifier: FR 4103.
B. Paperwork Reduction Act OMB Number: 7100–NEW.
requesting and holding a Payment
Account. As discussed in Section III.A.4 Certain provisions of the Guidelines General Description of Collection:
and PSR Policy contain ‘‘collections of PSR Policy: The proposed changes to
above, an individual Payment Account’s
information’’ within the meaning of the the PSR Policy would introduce two
Closing Balance Limit would be based
Paperwork Reduction Act (PRA) of disclosure provisions. First, under the
on the Reserve Bank’s analysis of the
1995.77 In accordance with the proposal, Payment Accounts would be
Payment Account holder’s payment
requirements of the PRA, the Board may subject to a Closing Balance Limit,
flows, using internal Reserve Bank data
not conduct or sponsor, and the which would be set by the Reserve
and any forecasts and additional Banks and reviewed at least annually. In
information provided by the Payment respondent is not required to respond
to, an information collection unless it order to initially set the Closing Balance
Account holder. To comply with the Limit, a Reserve Bank would rely on
proposed terms to mitigate illicit displays a currently valid Office of
Management and Budget (OMB) control information obtained by the Reserve
finance risk in the PSR Policy, a Bank during its review of the
Payment Account holder may be number. The Board has reviewed the
Guidelines and PSR Policy under institution’s Payment Account request.
required on an ad hoc or ongoing basis Payment Account holders would have
to provide information to demonstrate authority delegated to the Board by the
OMB. The Guidelines and PSR Policy an ongoing ability to submit additional
its compliance with BSA/AML and data and information to support the
OFAC requirements as discussed in contain information collections subject
to the PRA. The Board proposes to Reserve Bank’s determination of the
Section III.A.3 above.76 individual Payment Account’s Closing
implement for three years the Disclosure
5. Duplicative, Overlapping, and Provisions Associated with the Payment Balance Limit. The disclosure of this
Conflicting Rules System Risk Policy and Account Access additional data and information would
The Board is not aware of any federal Guidelines (FR 4103; OMB No. 7100– be voluntary. Second, under the
rules that may duplicate, overlap with, NEW) to account for these provisions. proposal, a Payment Account holder
or conflict with the proposed changes to Comments are invited on: may be required on an ad hoc or
the PSR Policy. (a) whether the collection of ongoing basis to provide information to
information is necessary for the proper demonstrate its compliance with BSA/
6. Significant Alternatives Considered performance of the Board’s functions, AML and OFAC requirements.78 If
The Board considered alternatives including whether the information has required by a Reserve Bank, the
such as setting the Closing Balance practical utility; disclosure of this information would be
Limit to zero and calculating the Closing (b) the accuracy of the estimates of the required to retain a benefit.
Balance Limit in a different manner (see burden of the information collection, Guidelines: Pursuant to the
Section III.A.4 above) and not proposing including the validity of the Guidelines, institutions requesting an
any illicit finance terms (see Section methodology and assumptions used; account or services from a Reserve Bank
III.A.3 above). The Board does not (c) ways to enhance the quality, must disclose to the Reserve Bank
believe that any of these alternatives utility, and clarity of the information to information about the institution
considered by the Board would have be collected; sufficient for the Reserve Bank to
affected the economic impact on small (d) ways to minimize the burden of evaluate the request against the
entities because, as noted above, the the information collection on Guidelines. These disclosures are
Payment Account would be a new, respondents, including through the use required to obtain a benefit.
of automated collection techniques or Frequency: Event-generated.
75 The Board assumes that small entities that other forms of information technology; Respondents: Institutions that are
currently have Master Accounts or settle and legally eligible to, and request to, obtain
transactions in a correspondent’s Master Account (e) estimates of capital or start-up an account or services from a Reserve
would not request a Payment Account. Bank. Legally eligible institutions
76 See Section VI.B for the estimated annual
costs and costs of operation,
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maintenance, and purchase of services include member banks, depository
burden hours associated with setting the Closing
Balance Limit and compliance with the terms to to provide information. institutions, and U.S. branches and
mitigate illicit finance risk. As stated in footnote 57 Comments on aspects of this
supra, while the terms in the PSR Policy address 78 As stated in footnote 57 supra, while the terms
document that may affect reporting,
Payment Account holders, the Reserve Banks would in the PSR Policy address Payment Account
retain their discretion to implement illicit finance recordkeeping, or disclosure holders, the Reserve Banks would retain their
controls for Master Accounts and OC 1 discretion to implement illicit finance controls for
Respondents. 77 44 U.S.C. 3501–3521. Master Accounts and OC 1 Respondents.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30645
agencies of foreign banks pursuant to account (e.g., a Master Account) or provision of these accounts and
Sections 13(1) and 13(14) of the FRA.79 services from a Reserve Bank must services.
Total estimated number of disclose to the Reserve Bank
Revision to Section II.F of the PSR
respondents: 34. information about the institution
Policy
Estimated average hours per response: sufficient for the Reserve Bank to
Guidelines—20.80 evaluate the request against the six The Board proposes to revise Section
PSR Policy— principles of the Guidelines. The II.F of the PSR Policy by adding the
Closing Balance Limit disclosure— proposed change to the Guidelines following new section II.F.5 (‘‘Special-
1.81 would add the Payment Account as a purpose account (Payment Account)’’)
BSA/AML and OFAC compliance new type of account that an eligible and renumbering existing section II.F.5
disclosure—3.82 institution may request. The request for as section II.F.6.
Total estimated annual burden hours: a Payment Account, like all other F. Special Situations
816. account requests, would be evaluated
Current actions: pursuant to the Guidelines, and any * * * * *
PSR Policy: The proposal would add institution requesting a Payment 5. Special-Purpose Account (Payment
two disclosure provisions to the PSR Account from a Reserve Bank would be Account)
Policy. First, as discussed above in required to disclose to the Reserve Bank
Section III.A.4, a Reserve Bank would Institutions that have been granted a
information about the institution special-purpose account for purposes of
review an individual Payment sufficient for the Reserve Bank to
Account’s Closing Balance Limit at least settling and clearing payment activity,
evaluate the request. also known as a Payment Account, may
annually, using internal Reserve Bank
data and any forecasts and additional VII. Federal Reserve Policy on Payment not incur daylight overdrafts. Reserve
information provided by the Payment System Risk Banks will monitor the institution’s
Account holder, to ensure the limit activity in real time and reject
For the reasons set forth in the transactions that would create an
remains appropriately sized. The preamble, the Board proposes to amend
Closing Balance Limit, and therefore overdraft. Reserve Banks may apply
the PSR Policy as follows: other risk controls as necessary.2
this disclosure, would only be
[The following titled portion will not
applicable institutions that are granted a Addition of Part IV to the PSR Policy
be published in the Code of Federal
Payment Account. Second, as discussed and Conforming Changes to the Table of
Regulations.]
in Section III.A.3 above, a Payment Contents
Account holder may be required on an Revision to the Introduction to the PSR The Board proposes to revise the PSR
ad hoc or ongoing basis to provide Policy Policy by adding the following new Part
information to demonstrate its IV following Part III and proposes to
compliance with BSA/AML and OFAC The Board proposes to revise the
Introduction section of the PSR Policy make conforming changes to the table of
requirements.83 contents to the PSR Policy.
Guidelines: Reserve Banks use the by adding the following new paragraph
Guidelines to analyze all requests for immediately before the last paragraph in Part IV. Policy on Reserve Bank
access to accounts and services. the existing section. Accounts and Services
Currently, institutions requesting an Introduction This part outlines some of the
* * * * * different types of accounts and services
79 The Guidelines apply to access requests from
that Reserve Banks provide to legally
any institution legally eligible to obtain an account Part IV of this policy outlines some of
eligible institutions, and the standard
or services, including Edge Agreement Corporations the different types of Reserve Bank
(12 U.S.C. 601–604a, 611–631) and to requests to be terms under which these accounts are
accounts (accounts) that Reserve Banks
an agent or participant in an excess balance account provided.3 Decisions regarding the
(12 CFR 204.10(d)); provided that the Guidelines provide to most legally eligible
provision of accounts and services are
and PSR Policy do not apply to accounts and institutions, and the standard terms
made at the discretion of individual
services provided by a Reserve Bank (i) as under which these accounts and Reserve Banks, and the Reserve Banks
depository and fiscal agent, such as those provided Reserve Bank financial services
for the Treasury and for certain government- retain discretion to impose additional
sponsored entities (12 U.S.C. 391, 393–95, 1823, (services) are provided.1 Under this terms to manage the risks set forth in the
1435), (ii) to certain international organizations (22 part, the Board recognizes the benefit of Guidelines on a case-by-case basis.
U.S.C. 285d, 286d, 290o–3, 290i–5, 290l–3), (iii) to providing transparency around the Reserve Banks evaluate requests from
designated financial market utilities (12 U.S.C. standard terms under which the Reserve
5465), and (iv) pursuant to the Board’s Regulation legally eligible institutions for access to
N (12 CFR part 214), or to joint accounts as Banks provide these accounts and accounts and services under the Board’s
described in the Board’s Guidelines for Evaluating services while acknowledging that guidelines for Reserve Banks to evaluate
Joint Account Requests. Reserve Banks maintain discretion requests for access to Reserve Bank
80 These Guidelines disclosure requirements are
whether to provide these accounts and accounts and services (Account Access
currently applicable to all requests for access to
accounts and services (e.g., Master Account
services and whether to impose Guidelines or Guidelines).4
requests) and would be applicable to Payment additional, more restrictive terms on the
Account requests. A. Reserve Bank Account Options
81 The disclosure provision relating to the Closing 1 This policy does not apply to accounts that the
For most legally eligible institutions,
Balance Limit would only be applicable to Payment Reserve Banks provide (i) as depository and fiscal
Accounts. the Reserve Banks offer two account
agent, such as those provided for the Treasury and
82 The disclosure provision relating to illicit
for certain government-sponsored entities (12
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2 See also infra Part IV.
finance controls would be applicable to Payment U.S.C. 391, 393–95, 1823, 1435), (ii) to certain
Accounts, Master Accounts, and OC 1 Respondents, 3 Terms, as used in this part, refers to parameters
international organizations (22 U.S.C. 285d, 286d,
based on Reserve Bank discretion. 290o–3, 290i–5, 290l–3), (iii) to designated financial set by the Board by regulation or policy and as
83 As stated in footnote 57 supra, while the terms market utilities (12 U.S.C. 5465), and (iv) pursuant implemented by the Reserve Banks through their
in the PSR Policy address Payment Account to the Board’s Regulation N (12 CFR part 214), Operating Circulars and other agreements.
holders, the Reserve Banks would retain their excess balances accounts (12 CFR 204.10(d)), and 4 87 FR 51099 (Aug. 19, 2022) (as amended by 89
discretion to implement illicit finance controls for joint accounts described in the Board’s Guidelines FR 100495 (Dec. 12, 2024) (and as proposed to be
Master Accounts and OC 1 Respondents. for Evaluating Joint Account Requests. amended by this Federal Register notice
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30646 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
types: a Master Account or a Payment Accounts for the benefit of third parties. Reserve Bank will analyze internal
Account.5 A Master Account is a For example, Reserve Banks do not Reserve Bank data on the Payment
general-purpose account maintained by maintain accounts for institutions acting Account holder’s payment flows (if
a Reserve Bank for a legally eligible in a trustee, fiduciary, or similar available), in particular at the beginning
institution. A Payment Account is a capacity. of the Federal Reserve’s business day,
special-purpose account maintained by and take into consideration periods of
1. Master Account Terms time when external sources of liquidity
a Reserve Bank for a legally eligible
institution for the purpose of clearing The Reserve Banks’ general-purpose may be limited, such as during
and settling payments activity of the Master Accounts do not have standard weekends and holidays.9 In addition,
institution, its depositors, and its other usage restrictions. A Master Account the Payment Account holder may
customers. may be used to settle any service provide the Reserve Bank with forecasts
approved by the relevant Reserve Bank. and additional information related to
B. Reserve Bank Account and Service Notwithstanding the foregoing, Reserve expected daily variations in payments
Terms Banks have discretion on a case-by-case and growth in payments over time. The
Accounts and services are subject to basis to impose other terms on a Master Reserve Bank will review an individual
the terms set forth in the Reserve Banks’ Account or terminate a Master Account Payment Account’s Closing Balance
operating circulars and any other to manage the risks set forth in the Limit at least annually, using Reserve
agreements governing the provision of Guidelines.7 Bank data and any forecasts and
accounts and services. These terms are additional information provided by the
2. Payment Account Terms Payment Account holder, to ensure the
designed to mitigate a range of risks set
forth in the Account Access Guidelines. Payment Accounts are special limit remains appropriately sized to
The Reserve Banks implement various purpose accounts designed for the support the Payment Account holder’s
controls to mitigate the risks associated purpose of clearing and settling payments at the open of the Federal
with the provision of accounts and payments activity of the institution, its Reserve business day.
services. For example, Reserve Banks in depositors, and its other customers. At the same time, the Federal Reserve
certain cases use credit-limit monitoring Payment Accounts have a standard set desires to limit the overall size of
of account balances, limit access to of risk-mitigating terms that create a closing Payment Account balances.
intraday credit, restrict access to lower residual risk profile than a Master Therefore, notwithstanding the
different services, and impose account Account. foregoing, an individual Payment
balance requirements to mitigate the Account’s Closing Balance Limit shall
a. Account Balances
risks posed by an institution’s access to not exceed $1 billion.
accounts and services. Closing Balance Limit: The Reserve The Reserve Bank has sole discretion
Certain terms apply to the provision Bank will require each holder of a to set the Closing Balance Limit of the
of all Reserve Bank accounts. In Payment Account to limit closing Payment Account within the parameters
particular, institutions generally may balances maintained in its Payment noted above.
only maintain one account with a Account to the amount set pursuant to In unusual circumstances, the Reserve
Reserve Bank, either a single Payment this part (the Closing Balance Limit). Bank may permit, on a case-by-case
Account or a single Master Account.6 The Payment Account holder is basis, a Payment Account holder to
Further, Reserve Banks do not recognize expected to achieve an account balance temporarily exceed its Closing Balance
third-party interests in Master Accounts at or below the Closing Balance Limit at Limit (Temporary Closing Amount). The
or Payment Accounts, and they do not the Federal Reserve’s close of business.8 Reserve Bank will consult with the
maintain Master Accounts or Payment A Payment Account is designed only Board before (i) permitting a Payment
to facilitate the clearing and settlement Account’s Temporary Closing Amount
5 Master Accounts and Payment Accounts are of the Payment Account holder’s to exceed $1 billion or (ii) if it permits
distinct from the accounts that Reserve Banks payment activity. Payment Account a Payment Account’s Temporary
provide (i) as depository and fiscal agent, such as holders are permitted to maintain Closing Amount to excess the relevant
those provided for the Treasury and for certain Payment Account’s Closing Balance
government-sponsored entities (12 U.S.C. 391, 393–
balances in the account at the Federal
95, 1823, 1435), (ii) to certain international Reserve’s close of business only to Limit for two consecutive Federal
organizations (22 U.S.C. 285d, 286d, 290o–3, 290i– provide sufficient liquidity for payment Reserve business days.
5, 290l–3), (iii) to designated financial market activity at the beginning of the next A Reserve Bank may contact a
utilities (12 U.S.C. 5465), and (iv) pursuant to the Payment Account holder if its Payment
Board’s Regulation N (12 CFR part 214), excess
Federal Reserve business day. In setting
balances accounts (12 CFR 204.10(d)) and joint the Closing Balance Limit for an Account balance exceeded its Closing
accounts described in the Board’s Guidelines for individual Payment Account, the Balance Limit at the close of Federal
Evaluating Joint Account Requests. Reserve business. If a Payment Account
6 An institution may have more than one account 7 Such conditions or limitations may include holder repeatedly violates its Closing
only in the following circumstances: credit-limit monitoring of account balances, Balance Limit, a Reserve Bank should
(i) it may retain, for a transitional period not to limiting access to intraday credit, restricting or not
exceed 12 months, the account of an acquired, permitting access to different Reserve Bank
consider additional restrictions or
failed, or a non-surviving institution with which it services, and imposing account balance terminating the institution’s access to
has merged or consolidated. The relevant Reserve requirements. one or more services. The Reserve Bank
Bank may restrict the use of such an account as it 8 The business day of Federal Reserve Financial
should consider closing the account in
deems necessary or appropriate, and may require Services is defined in Part II. It is the 24-hour
that the Financial Institution execute a security cases where the Payment Account
period that begins immediately after the regularly-
agreement covering multiple accounts; scheduled close of business of the Fedwire Funds holder is in frequent or material
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(ii) a U.S. branch or agency of a foreign bank, an Service (on days when the Fedwire Funds Service
Edge Act corporation, or an Agreement Corporation is open) and the FedNow Service on all other days, 9 When setting the initial Closing Balance Limit
may maintain a single account, or it may maintain including weekends and holidays (which, in both for a Payment Account, internal Reserve Bank data
an account for each group of offices located in the cases, is generally 7:00 p.m. ET). For the purposes may not be available. The Reserve Bank will rely
same state and the same Federal Reserve District; of the Closing Balance Limit, the open of the on information obtained by the Reserve Bank
and Federal Reserve business day is the open of the during its review of the institution’s Payment
(iii) the relevant Reserve Bank, in its discretion, FedNow Service Funds Transfer Business Day Account request to conduct its analysis to set the
may allow multiple accounts in other situations. (generally 7:01 p.m. ET). initial Closing Balance Limit.
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30647
noncompliance with its Closing Balance access to an account and services Guidelines Covering Access to Accounts
Limit. should not create undue risk to the and Services at Federal Reserve Banks
Intraday Balance Limit: Payment overall economy by facilitating activities (Account Access Guidelines)
Accounts have no intraday account such as money laundering, terrorism
Section 1: Principles
balance limit. During the Federal financing, fraud, cybercrimes, economic
Reserve business day, a Payment or trade sanctions violations, or other The Board of Governors of the Federal
Account holder is allowed to maintain illicit activity (illicit activity). Reserve System (Board) has adopted
an unlimited balance in a Payment In many cases, the Reserve Bank will these account access guidelines
Account. This will allow the Payment receive, on an ongoing basis, an comprised of six principles to be used
Account holder to fund its payments assessment of the Payment Account by Federal Reserve Banks (Reserve
activity flexibly during the Federal holder by its primary supervisor. A Banks) in evaluating requests (access
Reserve business day. Reserve Bank may, at its discretion, requests) for Reserve Bank accounts
require a Payment Account holder to (accounts) and Reserve Bank financial
b. Interest on Overnight Balances services (services).1 2 The Board has
provide additional information to
Pursuant to the Board’s Regulation D, mitigate illicit finance risk. These issued these account access guidelines
a Payment Account holder will not mitigants may include, but are not under its general supervision authority
receive interest on balances maintained limited to, requiring that the Payment over the operations of the Reserve
at a Reserve Bank.10 Account holder: Banks, 12 U.S.C. 248(j). Decisions on
c. Access to Reserve Bank Credit • Provide the Reserve Bank with an individual requests for access to
independent, third-party assessment accounts and services are made by the
No Access to the Discount Window: that the Payment Account holder’s BSA/ Reserve Bank in whose District the
Pursuant to the Board’s Regulation A, a AML and OFAC compliance programs requester is located.
Payment Account holder will not be are consistent with the terms in the The Account Access Guidelines apply
permitted to access credit from the Board’s Account Access Guidelines; to access requests from all institutions
discount window. • Provide the Reserve Bank with an that are legally eligible to receive an
No Access to Intraday Credit and attestation regarding the Payment account or services, as discussed in
Credit-Limit Monitoring: Payment Account holder’s BSA/AML or OFAC more detail in the first principle.3 The
Account holders will not be permitted compliance; Board expects the Reserve Banks to
to utilize Reserve Bank intraday credit • Meet regularly with the Reserve engage in consultation with each other
(i.e., incur daylight overdrafts). Reserve Bank to discuss noteworthy or material and the Board, as appropriate, on
Banks will reject transactions that compliance issues regarding BSA/AML reviews of access requests, as well as
would create an overdraft.11 and OFAC; ongoing monitoring of accountholders,
d. Reserve Bank Financial Services • Notify the Reserve Bank of any to ensure that the guidelines are
BSA/AML or OFAC enforcement action implemented in a consistent and timely
A Payment Account may only be used manner. The Board believes it is
taken against the Payment Account
to settle services for which the Reserve important to make clear that legal
holder by a regulatory or supervisory
Banks have automated solutions to eligibility does not bestow a right to
authority;
reject a transaction that would cause the • Notify the Reserve Bank of any obtain an account and services. While
Payment Account balance to be material deficiencies identified decisions regarding individual access
negative.12 regarding the Payment Account holder’s requests remain at the discretion of the
e. Account Usage Restrictions BSA/AML or OFAC compliance individual Reserve Banks, the Board
program; or believes it is important that the Reserve
Correspondent Prohibition: A
Payment Account holder is not • Provide the Reserve Bank with Banks apply a consistent set of
copies of audit reports of the Payment guidelines when reviewing such access
permitted to act as a Correspondent as
Account holder’s compliance programs. requests to promote consistency across
defined in the Reserve Banks’ Operating
At its discretion, the Reserve Bank Reserve Banks and to facilitate equitable
Circular 1 (Accounts) (OC 1).13
may take additional actions in response treatment across institutions.
Otherwise, a Payment Account may be These Account Access Guidelines
to heightened illicit finance risk,
used to clear and settle transactions for also serve to inform requesters of the
including restricting or terminating the
which the Payment Account holder is
Payment Account holder’s access to
not the originator or beneficiary or for 1 As discussed in the Federal Reserve’s Operating
services or closing of the institution’s
which the Payment Account holder is Circular No. 1, an institution (other than a Payment
account.
the intermediary bank. Account holder) has the option to settle its Federal
Respondent Prohibition: A Payment g. Discretion To Impose Other Terms Reserve financial services transactions in its master
account with a Reserve Bank or in the master
Account holder is not permitted to act Reserve Banks have discretion on a account of another institution that has agreed to act
as a Respondent as defined in OC 1. case-by-case basis to impose other terms as its correspondent. These principles apply to
requests for either arrangement.
f. Illicit Finance Risk Mitigants to manage the risks set forth in the 2 Reserve Bank financial services mean all
Under the Account Access Guidelines with respect to the ongoing services subject to Federal Reserve Act Section 11A
Guidelines, a Payment Account holder’s provision of a Payment Account. (‘‘priced services’’) and Reserve Bank cash services.
Financial services do not include transactions
VIII. Updated Account Access conducted as part of the Federal Reserve’s open
10 12 CFR part 204.
Guidelines market operations or administration of the Reserve
11 See also supra Part II.
Banks’ Discount Window.
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12 The Reserve Banks maintain a public list of For the reasons set forth in the 3 These principles would not apply to accounts
Reserve Bank services with automated controls to preamble, the Board proposes to amend provided under fiscal agency authority, to accounts
prevent a negative balance. and restate the Account Access authorized pursuant to the Board’s Regulation N (12
13 Many legally eligible institutions access CFR part 214), to joint account requests, or account
Guidelines as follows:
Reserve Bank services directly from a Reserve Bank requests from designated financial market utilities,
but settle the debits and credit associated with their
[The following titled portion will not since existing rules or policies already set out the
Reserve Bank service activity in the Master Account be published in the Code of Federal considerations involved in granting these types of
of another legally eligible institution. Regulations.] accounts.
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30648 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
factors that a Reserve Bank will review needs or models.5 Accordingly, these under the Federal Reserve Act or other
in any access request and thereby allow Account Access Guidelines apprise federal statute to maintain an account
a requester to make any enhancements requesters of two different account types and receive services and should have a
to its risk management, documentation, that come with different terms: Master well-founded, clear, transparent, and
or other practices to attempt to Accounts and Payment Accounts (as enforceable legal basis for its
demonstrate how it meets each of the described in Section 2). operations.7
principles. Establishment of an account and a. Unless otherwise specified by
These guidelines broadly outline provision of services by a Reserve Bank federal statute, only member banks,
considerations for evaluating access under these guidelines is not an entities that meet the definition of a
requests, but they are not intended to endorsement or approval by the Federal depository institution under section
provide assurance that any specific Reserve of the institution. Nothing in 19(b) of the Federal Reserve Act, or U.S.
institution will be granted an account or the Board’s guidelines relieves any branches or agencies of foreign banks
services. The individual Reserve Bank institution from compliance with are legally eligible to obtain accounts
will evaluate each access request on a obligations imposed by the institution’s and services.8
case-by-case basis. When applying these supervisors and regulators. b. The Reserve Bank should assess the
account access guidelines, the Reserve Accordingly, Reserve Banks should consistency of the institution’s activities
Bank should factor, to the extent evaluate how each institution requesting and services with applicable laws and
possible, the assessments of an access to an account or services will regulations, such as Article 4A of the
institution by state and/or federal meet the following principles.6 Each Uniform Commercial Code and the
supervisors into its independent principle identifies factors that Reserve Electronic Fund Transfer Act (15 U.S.C.
analysis of the institution’s risk profile. Banks should consider when evaluating 1693 et seq). The Reserve Bank should
The evaluation of an institution’s access an institution against the specific risk also consider whether the design of the
targeted by the principle (several factors institution’s services would impede
request should also consider whether
are pertinent to more than one compliance by the institution’s
the request has the potential to set a
principle). The Reserve Banks should
precedent that could affect the Federal customers with U.S. sanctions
consider the nature of the institution
Reserve’s ability to achieve its policy programs, Bank Secrecy Act (BSA) and
and the access being sought when
goals now or in the future. anti-money laundering (AML)
reviewing a request under these
If the Reserve Bank decides to grant requirements or regulations, or
guidelines. For example, provision of a
an access request, it may impose (at the consumer protection laws and
Payment Account with its
time of account opening, granting access regulations.
accompanying controls poses materially
to a service, or any time thereafter) lower risk than provision of a Master 2. Provision of an account and
obligations relating to, or conditions or Account. services to an institution should not
limitations on, use of the account or The identified factors are commonly present or create undue credit,
services as necessary to limit, used in the regulation and supervision operational, settlement, cyber or other
operational, credit, legal, or other risks of federally insured institutions. As a risks to the Reserve Bank.
posed to the Reserve Banks, the result, the Board anticipates the a. The Reserve Bank should
payment system, financial stability, or application of these guidelines to access incorporate, to the extent possible, the
the implementation of monetary policy requests by federally insured assessments of an institution by state
or to address other considerations.4 The institutions will be fairly and/or federal supervisors into its
account-holding Reserve Bank may, at straightforward in most cases, which is independent assessment of the
its discretion, decide to place additional consistent with Section 3 of these institution’s risk profile.
risk management controls on the Guidelines. However, Reserve Bank b. The Reserve Bank should confirm
account and services, such as real-time assessments of access requests from that the institution has an effective risk
monitoring of account balances, as it non-federally insured institutions may management framework and governance
may deem necessary to mitigate risks. If require more extensive due diligence. arrangements to ensure that the
the obligations, conditions or Reserve Banks monitor and analyze institution operates in a safe and sound
limitations, or controls are ineffective in the condition of institutions with access manner, during both normal conditions
mitigating the risks identified—or if to accounts and services on an ongoing and periods of idiosyncratic and market
they are breached—the Reserve Bank basis. Reserve Banks should use these stress.
may further restrict the institution’s use guidelines to re-evaluate the risks posed
of accounts and services or may close by an institution in cases where its 7 These principles do not apply to accounts and
the account. condition monitoring and analysis services provided by a Reserve Bank (i) as
indicate potential changes in the risk depository and fiscal agent, such as those provided
While decisions regarding the for the Treasury and for certain government-
conditions or limitations imposed on an profile of an institution, including a sponsored entities (12 U.S.C. 391, 393–95, 1823,
institution’s use of accounts and significant change to the institution’s 1435), (ii) to certain international organizations (22
services are made at the discretion of business model. U.S.C. 285d, 286d, 290o–3, 290i–5, 290l–3), (iii) to
1. Each institution requesting an designated financial market utilities (12 U.S.C.
individual Reserve Banks, the Board 5465), and (iv) pursuant to the Board’s Regulation
believes that setting out a standard set account or services must be eligible N (12 CFR part 214) or to joint accounts as
of terms will facilitate greater described in the Board’s Guidelines for Evaluating
5 Terms, as used in these guidelines, refers to Joint Account Requests.
transparency and consistent treatment
parameters set by the Board by regulation or policy 8 Unless otherwise expressly excluded under the
across institutions with similar business and as implemented by the Reserve Banks through previous footnote, these principles apply to account
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their Operating Circulars and other agreements. and service requests from all institutions, including
4 The conditions imposed could include, for 6 The principles are designed to address the risks member banks, entities that meet the definition of
example, establishing a cap on the amount of posed by an institution having access to an account a depository institution under Section 19(b) (12
balances held in the account. In addition, the Board or services, ranging from narrow risks (e.g., to an U.S.C. 461(b)(1)(A)), U.S. branches and agencies of
may authorize a Reserve Bank to pay a different rate individual Reserve Bank) to broader risks (e.g., to foreign banks (12 U.S.C. 347d), and Edge and
of interest on balances held in the account or may the overall economy). Reviews performed by the Agreement Corporations (12 U.S.C. 601–604a, 611–
limit the amount of balances in the account that Reserve Bank may address several principles at 631), and to requests to be an agent or participant
receive interest. once. in an excess balance account (12 CFR 204.10(d)).
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Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices 30649
i. For these purposes, effective risk comply with any balance requirements idiosyncratic stress, disruptions,
management includes having a robust by the end of the business day.9 outages, cyber incidents, or other
framework, including policies, iv. Have in place an operational risk incidents at the institution might have
procedures, systems, and qualified staff, framework designed to ensure on other institutions and the payment
to manage applicable risks. The operational resiliency against events system broadly. The framework should
framework should at a minimum associated with processes, people, and include:
identify, measure, and control the systems that may impair the i. Clearly defined operational
particular risks posed by the institution’s use and settlement of reliability objectives and policies and
institution’s business lines, products Reserve Bank services. This framework procedures in place to achieve those
and services. The effectiveness of the should consider internal and external objectives;
framework should be further supported factors, including operational risks ii. A business continuity plan that
by internal testing and internal audit inherent in the institution’s business addresses events that have the potential
reviews. model, risks that might arise in to disrupt operations and a resiliency
ii. The framework should be subject to connection with its use of any account objective to ensure the institution can
oversight by a board of directors (or and services, and cyber-related risks. At resume services in a reasonable
similar body) as well as oversight by a minimum, the operational risk timeframe; and
framework should: iii. Policies and procedures for
state and/or federal banking
A. Identify the range of operational identifying risks that external parties
supervisor(s).
risks presented by the institution’s may pose to sound operations,
iii. The framework should clearly business model (e.g., cyber including interdependencies with
identify all risks that may arise related vulnerability, operational failure, affiliates, service providers, and others.
to the institution’s business (e.g., legal, resiliency of service providers), and c. The Reserve Bank should identify
credit, liquidity, operational, custody, establish sound operational risk actual and potential interactions
investment) as well as objectives management objectives to address such between the institution’s use of an
regarding the risk tolerances for the risks; account and services and (other parts of)
management of such risks. B. Establish sound governance the payment system.
c. The Reserve Bank should confirm arrangements, rules, and procedures to i. The extent to which the institution’s
that the institution is in substantial oversee and implement the operational use of an account and services might
compliance with its supervisory risk management framework; restrict funds from being available to
agency’s regulatory and supervisory C. Establish clear and appropriate support the liquidity needs of other
requirements. rules and procedures to carry out the institutions should also be considered.
risk management objectives; d. The institution must, in the Reserve
d. The institution must, in the Reserve Bank’s judgment:
D. Employ the resources necessary to
Bank’s judgment: i. Be in sound financial condition,
achieve its risk management objectives
i. Demonstrate an ability to comply, and implement effectively its rules and including maintaining adequate capital
were it to obtain an account, with Board procedures, including, but not limited to continue as a going concern and to
orders and policies, Reserve Bank to, sound processes for physical and meet its current and projected operating
agreements and operating circulars information security, internal controls, expenses under a range of scenarios.
(Operating Circulars), and other compliance, program management, ii. Demonstrate the ability, on an
applicable Federal Reserve incident management, business ongoing basis (including during periods
requirements. continuity, audit, and well-qualified of idiosyncratic or market stress), to
ii. Be in sound financial condition, personnel; and meet all of its obligations in order to
including maintaining adequate capital E. Support compliance with the remain a going concern and comply
to continue as a going concern and to electronic access requirements, with its agreement for an account and
meet its current and projected operating including security measures, outlined in services, including by maintaining:
expenses under a range of scenarios. the Reserve Banks’ Operating Circular 5 A. Sufficient liquid resources to meet
and its supporting documentation. its obligations to the Reserve Bank
iii. Demonstrate the ability, on an under applicable agreements, Operating
3. Provision of an account and
ongoing basis (including during periods Circulars, and Board policies;
services to an institution should not
of idiosyncratic or market stress), to B. The operational capacity to ensure
present or create undue credit, liquidity,
meet all of its obligations in order to that such liquid resources are available
operational, settlement, cyber or other
remain a going concern and comply to satisfy all such obligations to the
risks to the overall payment system.
with its agreement for a Reserve Bank a. The Reserve Bank should Reserve Bank on a timely basis; and
account and services, including by incorporate, to the extent possible, the C. Settlement processes that are
maintaining: assessments of an institution by state designed to appropriately monitor
A. Sufficient liquid resources to meet and/or federal supervisors into its balances in its account on an intraday
its obligations to the Reserve Bank independent assessment of the basis, to process transactions through its
under applicable agreements, Operating institution’s risk profile. account in an orderly manner and
Circulars, and Board policies; b. The Reserve Bank should confirm comply with any balance requirements
B. The operational capacity to ensure that the institution has an effective risk by the end of the business day.10
that such liquid resources are available management framework and governance iii. Have in place an operational risk
to satisfy all such obligations to the arrangements to limit the impact that framework designed to ensure
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Reserve Bank on a timely basis; and operational resiliency against events
9 All accounts must comply with any applicable associated with processes, people, and
C. Settlement processes that are balance requirements. Generally, Master Accounts systems that may impair the
designed to appropriately monitor must achieve a positive balance at the close of the institution’s payment system activities.
balances in its account on an intraday Federal Reserve business day (as defined in Part II
of the PSR Policy). Payment Accounts must have a This framework should consider
basis, to process transactions through its balance at or below their applicable balance limit
account in an orderly manner and at the close of the Federal Reserve business day. 10 See id.
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30650 Federal Register / Vol. 91, No. 100 / Tuesday, May 26, 2026 / Notices
internal and external factors, including any resulting movements in deposit D. Ongoing training for appropriate
operational risk inherent in the balances could have a deleterious effect personnel, tailored to each individual’s
institution’s business model, risk that on U.S. financial stability. specific responsibilities, as appropriate;
might arise in connection with its use of i. Balances held in Reserve Bank E. Appropriate risk-based procedures
the payment system, and cyber-related accounts present no credit or liquidity for conducting ongoing customer due
risks. At a minimum, the framework risk, making them very attractive in diligence to include, but not limited to,
should: times of financial or economic stress. As understanding the nature and purpose
A. Identify the range of operational a result, in times of stress, investors that of customer relationships for the
risks presented by the institution’s would otherwise provide short-term purpose of developing a customer risk
business model (e.g., cyber funding to non-financial firms, financial profile and conducting ongoing
vulnerability, operational failure, firms, and state and local governments monitoring to identify and report
resiliency of service providers), and could rapidly withdraw that funding suspicious transactions and, on a risk
establish sound operational risk and instead deposit their funds with an basis, to maintain and update customer
management objectives; institution holding mostly central bank information;
B. Establish sound governance balances. If the institution is not subject c. The Reserve Bank should confirm
arrangements, rules, and procedures to to capital requirements similar to a that the institution has a compliance
oversee the operational risk federally insured institution, it can more program designed to support its
management framework; easily expand its balance sheet during compliance with the Office of Foreign
C. Establish clear and appropriate times of stress; as a result, the potential Assets Control (OFAC) regulations at 31
rules and procedures to carry out the for sudden and significant deposit CFR Chapter V.13
risk management objectives; inflows into that institution is i. For these purposes, the Reserve
D. Employ the resources necessary to particularly large, which could Bank may review the institution’s
achieve its risk management objectives disintermediate other parts of the written OFAC compliance program,
and implement effectively its rules and financial system, greatly amplifying provided one has been created, and
procedures, including, but not limited stress. confirm that it is commensurate with
to, sound processes for physical and 5. Provision of an account and the institution’s OFAC risk profile. An
information security, internal controls, services to an institution should not OFAC compliance program should
compliance, program management, create undue risk to the overall identify higher-risk areas, provide for
incident management, business economy by facilitating activities such appropriate internal controls for
continuity, audit, and well-qualified as money laundering, terrorism screening and reporting, establish
personnel. financing, fraud, cybercrimes, economic independent testing for compliance,
4. Provision of an account and or trade sanctions violations, or other designate a bank employee or
services to an institution should not illicit activity. employees as responsible for OFAC
create undue risk to the stability of the a. The Reserve Bank should
compliance, and create a training
U.S. financial system. incorporate, to the extent possible, the
program for appropriate personnel in all
a. The Reserve Bank should assessments of an institution by state
relevant areas of the institution.
incorporate, to the extent possible, the and/or federal supervisors into its
6. Provision of an account and
assessments of an institution by state independent assessment of the
services to an institution should not
and/or federal supervisors into its institution’s risk profile.
b. The Reserve Bank should confirm adversely affect the Federal Reserve’s
independent assessment of the ability to implement monetary policy.
institution’s risk profile. that the institution has a BSA/AML
compliance program consisting of the a. The Reserve Bank should
b. The Reserve Bank should
components set out below and in incorporate, to the extent possible, the
determine, in consultation with the
relevant regulations.11 assessments of an institution by state
other Reserve Banks and the Board as
i. For these purposes, the Reserve and/or federal supervisors into its
appropriate, whether the access to an
Bank should confirm that the independent assessment of the
account and services by an institution
institution’s BSA/AML compliance institution’s risk profile.
itself or a group of like institutions b. The Reserve Bank should
could introduce financial stability risk program contains the following
elements: 12 determine, in consultation with the
to the U.S. financial system. other Reserve Banks and the Board as
c. The Reserve Bank should confirm A. A system of internal controls,
including policies and procedures, to appropriate, whether access to an
that the institution has an effective risk
ensure ongoing BSA/AML compliance; account and services by an institution
management framework and governance
B. Independent audit and testing of itself or a group of like institutions
arrangements for managing liquidity,
BSA/AML compliance to be conducted could have an effect on the
credit, and other risks that may arise in
by bank personnel or by an outside implementation of monetary policy.
times of financial or economic stress.
d. The Reserve Bank should consider party; c. The Reserve Bank should consider,
the extent to which, especially in times C. Designation of an individual or among other things, whether access to
of financial or economic stress, liquidity individuals responsible for coordinating an account and services by the
or other strains at the institution may be and monitoring day-to-day compliance institution or group of like institutions
transmitted to other segments of the (BSA compliance officer); could affect the level and variability of
financial system. the demand for and supply of reserves,
e. The Reserve Bank should consider
11 Refer to 12 CFR 208.62 and 63, 12 CFR the level and volatility of key policy
211.5(k), 5(m), 24(f), and 24(j), and 12 CFR 225.4(f) interest rates, the structure of key short-
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the extent to which, especially during (Federal Reserve); 12 CFR 326.8 and 12 CFR part
times of financial or economic stress, 353 (FDIC); 12 CFR 748.1–2 (NCUA); 12 CFR 21.11,
term funding markets, and the overall
access to an account and services by an and 21, and 12 CFR 163.180 (OCC); and 31 CFR size of the consolidated balance sheet of
institution itself (or a group of like 1020.210(a) and (b), and 31 CFR 1020.320 (FinCEN),