The Federal Reserve Board on May 20 published a proposed limited master account framework for legally eligible non-bank financial institutions. Approved institutions would access Fedwire Funds Service, FedNow, and the National Settlement Service through a restricted payment account with a closing balance cap of $1 billion. The accounts carry no intraday credit, no discount window access, and no interest on balances.
The Board approved the proposal 6-1, with Governor Michael Barr dissenting on grounds that the framework lacks sufficient anti-money laundering safeguards. The Fed directed Reserve Banks to pause decisions on Tier 3 institution access requests until the rulemaking concludes. A 60-day public comment period begins upon Federal Register publication.
The proposal explicitly excludes FedACH access, distinguishing it from the bipartisan PACE Act that would open all three Fed payment services to non-banks. Eligible institutions include fintech firms, cryptocurrency exchanges, and other non-traditional financial services companies already legally qualified for Fed accounts.