Joint Trades Comment on Federal Reserve Payment Account Framework

Ladies and Gentlemen:

The Bank Policy Institute, The Clearing House Association, and the Financial Services Forum^[1] ("Associations") appreciate the opportunity to comment on proposed revisions to the Federal Reserve Policy on Payment System Risk ("PSR Policy"),^[2] the Federal Reserve Account Access Guidelines ("Guidelines"),^[3] and Federal Reserve Regulations A^[4] and D^[5] to accommodate the provision by Federal Reserve Banks of special-purpose accounts that would clear and settle certain payment activity ("Payment Accounts").^[6] This letter responds to each of these three requests for comment and attaches and incorporates by reference the comment letter from the Associations submitted in response to the Federal Reserve's related December 2025 Request for Information and Comment ("Payment Account RFI") on a special-purpose account prototype.^[7]

I. Executive Summary

This proposal represents a fundamental shift in Federal Reserve policy and, if adopted, would permit institutions subject to less rigorous supervision and regulation to access the payments system directly. Although the Associations support responsible innovation, the potential effects of this shift on the payments system, monetary policy implementation, and financial stability warrant commensurate safeguards and controls. The recommendations in this letter are intended to help ensure that any Payment Account framework the Federal Reserve adopts is transparent, consistently applied across Reserve Banks, and accompanied by risk mitigants commensurate with the credit, operational, illicit finance, monetary policy, and financial stability risks that Payment Account holders may pose.

We appreciate the Federal Reserve's efforts to engage in a comprehensive and deliberate process regarding Payment Accounts and support many of the controls and limitations contemplated by the proposal. We would highlight two particularly important controls proposed by the Federal Reserve that we would strongly recommend be retained in any implementation of the Payment Account framework:

• We strongly support the Board's proposed limitation on access by Payment Account holders to the FedACH Service. Allowing Payment Account holders, many of which may not be subject to federal prudential supervision, access to the FedACH Service and similar services would create unacceptable levels of risk to the Reserve Banks and the overall payments system.
• We also strongly support the Board's proposal to codify in Regulation D that Payment Accounts not receive interest. Paying interest to Payment Account holders could create significant risks to financial stability and effective monetary policy implementation.

This letter is organized as follows:

Section II recommends that the Federal Reserve consider the systemic impact of offering Payment Accounts on the payments system, monetary policy implementation, and financial stability.

• Within one year of finalizing the proposal, and every year thereafter, the Federal Reserve should conduct a comprehensive assessment of the aggregate systemic impact of Payment Accounts on the payments system, monetary policy implementation, and financial stability.

• The Federal Reserve should consider delaying the granting of Payment Accounts until the Federal Reserve's task force on balance sheet policy has completed its analysis.

Section III recommends that the Board ensure that the standards governing account access are transparent, rigorous and consistently applied across Reserve Banks.

• The Board should codify in regulation the proposed revisions to Parts II-IV of the PSR Policy and the Guidelines, such that the terms of account access apply consistently across the Reserve Banks and any future changes to the terms would be subject to notice and comment.
• We strongly support the Board's encouragement of the Reserve Banks to pause action on account requests from Tier 3 institutions until the Board has completed its policy development process with respect to Payment Accounts.

Section IV recommends that the Board should publicly provide its interpretation of legal eligibility for a Reserve Bank account.

• We reiterate our recommendations from our comment letter submitted in response to the Payment Account RFI that the Board propose for public comment its interpretation of which entities are legally eligible for Reserve Bank accounts and services.
• The Federal Reserve should also publicly disclose the specific legal authority relied upon whenever a Reserve Bank grants a new account or access to services.

Section V recommends that uninsured depository institutions not subject to federal supervision at both the institution and holding company level should be permitted to seek access only to Payment Accounts.

• The Board should continue to limit Master Account access to Tier 1 and certain Tier 2 institutions, and Tier 3 institutions should be able to seek access only to Payment Accounts, subject to the safeguards we recommend in Section VI.

Section VI emphasizes our support for the proposed limitations on Payment Accounts but recommends further safeguards. In particular, Section VI recommends that the Board adopt certain modifications to the proposed limitations and implement additional limitations, including:

• The Closing Balance Limit should be capped at $500 million, tailored to each Payment Account holder, and be reevaluated periodically. The Federal Reserve should also consider establishing daily maximum transaction limits.
• Payment Account holders should have access only to payments systems that provide final, irrevocable settlement and are subject to real-time monitoring. As discussed above, we strongly support the proposal that Payment Account holders not have access to the FedACH Service and other services that would create unacceptable levels of risk to the Reserve Banks and the overall payments system.
• As discussed above, interest should not be paid on balances in Payment Accounts.Payment Accounts should not be used to benefit third parties: Payment Account holders should not be permitted to act as sponsor banks for other parties.
• The Federal Reserve should ensure that Tier 3 applicants meet the same Bank Secrecy Act ("BSA") and anti-money laundering ("AML") and sanctions risk standards as insured depository institutions ("IDIs") and are subject to appropriate risk-based controls to protect the payments system from illicit finance risk.
• Payment Account holders should be required to take additional steps to mitigate cyber and operational risk.
• Payment Account holders should be required to establish robust measures to enable their orderly resolution.

Section VII recommends that the Federal Reserve adopt additional safeguards to maximize transparency and help ensure Payment Account holders do not present risks to the financial system.

In addition, we reiterate the recommendations made in our response to the Payment Account RFI, attach that response hereto, and incorporate it by reference.

To read the full comment letter, please click here, or click on the download button below.

[1] Please see Annex A for a description of the Associations.

[2] Federal Reserve Policy on Payment System Risk (July 20, 2023), available at https://www.federalreserve.gov/paymentsystems/files/psr_policy.pdf.

[3] Guidelines for Evaluating Account and Services Requests, 87 Fed. Reg. 51099 (Aug. 19, 2022).

[4] 12 CFR Part 201.

[5] 12 CFR Part 204.

[6] See Notice and Request for Comment on Proposed Revisions to the Federal Reserve Policy on Payment System Risk and the Guidelines for Account and Services Requests, 91 Fed. Reg. 30627 (May 26, 2026); Notice of Proposed Rulemaking on Regulation D: Reserve Requirements of Depository Institutions, 91 Fed. Reg. 30503 (May 26, 2026); Notice of Proposed Rulemaking on Regulation A: Extensions of Credit by Federal Reserve Banks, 91 Fed. Reg. 30498 (May 26, 2026).

[7] Bank Policy Institute, The Clearing House Association and Financial Services Forum, Comment on the Request for Information and Comment on Reserve Bank Payment Account Prototype (Feb. 6, 2026), available at https://www.federalreserve.gov/apps/proposals/comments/FR-2025-0083-01-C82 (attached as Annex B).