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The Federal Reserve Board Friday issued a proposed rule for Federal Reserve Banks to publish a “periodic list of depository institutions that have access to Federal Reserve accounts,” also referred to as master accounts, and payment services. 

The proposal is an attempt from the Fed to be more transparent about who has access to its payment rails.

Although the impact on credit unions is minimal – the rule aims to advance payment system transparency and would not impose additional compliance obligations for maintaining or requesting a master account. However, the Federal Reserve has acknowledged in the proposal that a financial institution that is revealed to have lost its master account access could potentially face reputational injury.

Of note, the proposal requires Reserve Banks to work cohesively to produce a single, quarterly system-wide report containing a list of federally-insured depository institutions with access to accounts and/or services and another list of nonfederally-insured depository institutions with access to accounts and/or services.

The report would be posted to a Fed public website shortly after the end of each quarter and would include the institution’s name and the Reserve Bank district. It would also identify institutions that have received access to accounts and/or services since the publication of the previous report and indicate institutions that no longer have access to these accounts and/or services following the previous report. 

NAFCU previously commented on the Federal Reserve’s approach to evaluation account and service requests, stating that it supports a transparent payment system, and one that manages and mitigates the risks posed by nontraditional, nonfederally-insured entities seeking master account access.

Stay tuned to NAFCU Today for the latest updates from the Federal Reserve.