The American Bankers Association and Consumer Bankers Association today submitted a joint comment letter supporting the Federal Reserve's proposed Payment Account framework as a prudent approach to responsible innovation if additional safeguards are adopted to protect the safety, soundness and integrity of the U.S. payments system.

The associations said the proposal represents a measured approach to expanding payment system access but stressed that any framework must be accompanied by strong risk management requirements, direct federal oversight and transparent application standards.

In the letter, ABA and CBA urged the Federal Reserve to:

• Maintain key safeguards included in the proposal, including prohibitions on interest payments, daylight credit, discount window access and FedACH access.
• Require clear, transparent and publicly available eligibility and review criteria for all Payment Account applicants.
• Condition access on demonstrated capabilities in governance, independent risk management, BSA/AML/CFT compliance, sanctions compliance, cybersecurity and operational resilience.
• Require all Payment Account participants to be subject to direct federal banking agency supervision as a condition of access.
• Adopt a conservative, phased implementation approach that increases activity only after institutions demonstrate sustained compliance and effective controls.
• Prohibit "nesting" arrangements and other activities that could allow third parties to circumvent Payment Account limitations.
• Develop meaningful enforcement, recovery and resolution expectations for account holders.
• Preserve the distinction between Payment Accounts and Master Accounts, with Master Account access remaining limited to federally supervised institutions with federally insured deposits.
  
  

The associations said legal eligibility alone should not guarantee access to a Payment Account and emphasized that the Federal Reserve must continue to evaluate applicants' risk profiles, governance structures and supervisory oversight.

ABA and CBA noted that the proposal's core guardrails, including prefunding requirements, no overdrafts, no interest and no access to Federal Reserve credit, are essential components of a framework that appropriately balances innovation and risk management.

The full comment letter was submitted in response to the Federal Reserve's request for comment on proposed revisions to its Payment System Risk policy, the Guidelines for Account and Service Requests, Regulation A and Regulation D.

Read the letter.

Media Contacts:

Sarah Grano
American Bankers Association
[email protected]

Weston Loyd
Consumer Bankers Association
[email protected]

About the American Bankers Association
The American Bankers Association is the voice of the nation's $26.1 trillion banking industry, which is composed of small, regional and large banks that together employ over 2 million people, safeguard $20.5 trillion in deposits and extend $13.7 trillion in loans.

About the Consumer Bankers Association
The Consumer Bankers Association represents America's leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA's corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on X @consumerbankers.

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About the American Bankers Association

The American Bankers Association is the voice of the nation's $26.1 trillion banking industry, which is composed of small, regional and large banks that together employ over 2 million people, safeguard $20.5 trillion in deposits and extend $13.7 trillion in loans.