Federal Reserve Board requests public comment on a proposal to establish a "payment account," which legally eligible financial institutions could use for the specific purpose of clearing and settling their payments
The Federal Reserve Board has requested public comment on a proposal to create a 'payment account' for eligible financial institutions. This account aims to facilitate the clearing and settling of payments while addressing risks to the payment system. The comment period will last for 60 days following its publication in the Federal Register.
- ▪The proposed payment account is designed for legally eligible financial institutions to enhance payment speed and reduce costs.
- ▪Institutions that are not federally insured have expressed interest in accessing Federal Reserve payment services.
- ▪The proposal includes changes based on public comments, such as increased closing balance limits based on expected payment activity.
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Following earlier public input, the Federal Reserve Board on Wednesday requested public comment on a proposal to establish a "payment account," which legally eligible financial institutions could use for the specific purpose of clearing and settling their payments. As the payments landscape rapidly evolves, financial institutions with an increasingly wide range of business models have sought direct access to the Federal Reserve's payment services to reduce costs and increase payment speed. Many of these requests for access come from institutions that are not federally insured.
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