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NAFCU writes to Fed on guidelines for evaluating account, services requests
NAFCU Senior Counsel for Research and Policy Andrew Morris wrote to the Federal Reserve Tuesday to reiterate the association’s support for its proposal to publicly disclose which depository institutions have access to Reserve Bank accounts and financial services. Morris stated that NAFCU supports the Fed developing a transparent and risk-based policy for granting access to Reserve Bank accounts as non-traditional institutions seek access.
The letter noted that continued developments in digital asset markets have created a greater need for the Fed to use “transparent standards to assess whether firms promoting, transacting or facilitating exchange of digital assets are effectively managing risk in a way that does not create additional exposures for the Federal Reserve and its payment systems."
Morris also argued that the Fed should focus on meeting the statutory criteria in the National Defense Authorization Act for Fiscal Year 2023 when charting a path forward “to publish a list of account holding institutions more frequently or include additional data regarding the timing of individual applications."
NAFCU previously wrote to the Fed in support of this proposal and “efforts to promote a uniform and transparent framework for evaluating access requests for Reserve Bank services centered on a foundation of risk management. NAFCU agrees that this framework and its component principles should be tailored to recognize the strong prudential supervision that already exists for federally insured depository institutions such as credit unions.”
The association will continue to promote the use of transparent guidelines by the Fed to ensure that firms that might present unique risks meet appropriate safety and soundness standards before being granted access to accounts and services.