In a significant move yesterday, the Federal Reserve proposed new guidelines that it will use when evaluating requests for master accounts with the Fed or access to the agency’s financial services. The proposal comes amid growing requests from fintech firms and other providers to gain access to the payments system. Comments on the proposal are due 60 days after publication in the Federal Register.

Under the proposed guidelines, the Fed will consider:

• Whether the institution is legally eligible to maintain an account at a Federal Reserve Bank and has a “well-founded, clear, transparent and enforceable legal basis for its operations.”
• Whether the provision of an account and services would present or create undue credit, operational, settlement, cyber or other risks to the Reserve Bank, or to the broader payments system.
• Whether the provision of an account and services would create undue risk to U.S. financial stability.
• Whether the provision of an account and services would create undue risk to the economy by facilitating illicit activities.

In the event the Fed decides to grant an access request, “it may impose (at the time of account opening, granting access to service or any time thereafter) obligations relating to, or conditions or limitations on, use of the account or services as necessary to limit operational, credit, legal or other risks posed to the Reserve Banks, the payment system, financial stability or the implementation of monetary policy or to address other considerations,” according to the proposal. View the proposal.