Federal Reserve Clarifies Access to Master Accounts and Services for Financial Institutions, Including for “Novel Charters” in Final Guidelines

20 September 2022
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Key Takeaways:
  • The Federal Reserve Board (“FRB”) has approved final guidelines (“Final Guidelines”) for Federal Reserve Banks (“Reserve Banks”) to use in evaluating requests for master accounts and access to Reserve Bank financial services (“Fed Accounts and Services”). The Final Guidelines reflect the comments to and development of two prior proposed guidelines: (i) the initial proposed guidelines, issued on May 11, 2021; and (ii) the supplemental proposed guidelines, issued March 8, 2022.
  • The Final Guidelines will impose a risk-focused framework that all 12 Reserve Banks will use when evaluating applications for access to Fed Accounts and Services and establish a three-tiered review framework to provide additional clarity on the level of due diligence and scrutiny to be applied by Reserve Banks to different types of institutions.
  • While Final Guidelines largely adopt the initial and supplemental proposed guidelines, there are a few notable changes including the definition and scope of the different tiered institutions.