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The U.S. Federal Reserve Board has said it has released the final guidelines which are set to be used by Reserve Banks when \u201creviewing requests to access Federal Reserve accounts and payment services.\u201d According to the board, the final guidelines will become effective as soon as they are published in the Federal Register. <\/strong>\n<\/p>\n \n As per the bank\u2019s statement, the latest guidelines are almost identical to the ones proposed in May 2021 and the supplemental ones which were proposed in March this year. These new guidelines will become effective once they are published in the Federal Register.<\/p>\n The move could pave the way for fintech and crypto banks and special purpose depository institutions (SPDIs). Kraken Bank applied<\/a> for a master account with the Federal Reserve Bank in October 2020. In the Fed\u2019s recent statement, Lael Brainard<\/a>, the vice chair of the U.S Federal Reserve, is quoted explaining why the guidelines are needed.<\/p>\n \u201cThe new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system,\u201d Brainard said.<\/p>\n \n On the other hand, for institutions adjudged to be engaged in novel activities or those for which an \u201cappropriate supervisory and regulatory framework\u201d is yet to be formulated, a more extensive review would be required, the statement said.<\/p>\n In June, Custodia Bank (formerly Avanti) sued the Federal Reserve<\/a> Board of Governors over an alleged \u201cunlawful delay\u201d of the company\u2019s master account application. Similar to Kraken, Custodia also applied for a Fed master account in October 2020, and it has been waiting 21 months for an answer since the filing.<\/p>\nNew Guidelines Aimed at Establishing a Transparent and Consistent Set of Factors for Reserve Banks<\/h2>\n
\nThe board of the U.S. Federal Reserve recently announced<\/a> what it called the \u201cfinal guidelines which establish a transparent, risk-based, and consistent set of factors for Reserve Banks to use in reviewing requests to access Federal Reserve accounts.\u201d<\/p>\nGrowing Requests for Access to Accounts<\/h2>\n
\nThe growing requests for access to accounts \u2014 aka master accounts \u2014 stem from the rising number of institutions offering \u201cnew types of financial products\u201d or those with novel charters. According to the U.S. Federal Reserve, the new guidelines stipulate that institutions with federal deposit insurance will be subjected \u201cto a more streamlined level of review.\u201d<\/p>\n