Better Markets has filed a Comment Letter to the Federal Reserve on their request for comment on amending its guidelines around master accounts and services to increase transparency.
Why It Matters. Access to the Fed’s accounts and services is a special privilege that allows institutions to keep deposits at the Fed (on which they can earn interest) and access key services that greatly facilitate the execution of financial transactions, such as the Fed’s payment system.
What We Said. The amendments put forth in the proposal are a start, but much more is needed. In addition to the names of institutions that have access and their Reserve Bank district (as proposed), the Fed should also disclose (among other items):
- A means to identify the institution, whether it is a unique identifier or identifying details
- A listing of the specific items to which the institution was given access;
- Type of institution, charter type (if applicable), and applicable Tier from the Account Access Guidelines that were finalized in 2022; and
- A summary of the relevant Reserve Bank’s assessment of any institution applies for Federal Reserve access (approved or denied).
Bottom Line. As an institution that was established to serve the American public, the Fed should always seek to provide the highest level of transparency to the public as possible without creating harm to the public or undermining its core mandates. Thus far, there has been essentially no transparency around Federal Reserve access. Certainly, that must change.
Read our full Comment Letter here or click the button below.