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April 25, 2022

Federal Reserve Should Strengthen Proposed Guidelines on Access to Fed Accounts for Risky Institutions

WASHINGTON, D.C.—Phillip Basil, Director of Banking Policy for Better Markets, released the following statement on the filing of a comment letter to the Federal Reserve Board on its proposed guidelines for Reserve Banks when assessing applications for Federal Reserve accounts and services:

“Unfortunately, the Federal Reserve’s proposed guidelines around assessments of access request to Fed accounts and services are weak and insufficient for the riskiest institutions – those that lack deposit insurance and may also have so-called novel charters and business models. For these institutions the guidelines fall well short, merely indicating that stricter review is necessary but failing to provide any clarity on what that means.

“Access to Fed accounts and services by any institution, even those that are federally insured and subject to supervision and regulation by federal banking agencies, introduces risk to the Reserve Banks, the Fed’s payment system, other financial institutions, the economy, and ultimately the taxpayer. Therefore, access for the riskiest, unconventional institutions should not be granted without transparent, consistent, robust, and strict standards and oversight in place that are commensurate to the unique risks posed by each type of institution. The proposed guidelines provide no confidence that this would be the case.

“While the proposal’s stated goal is to promote transparency and consistency in the process and minimize risk to the Federal Reserve system as well as the financial system and economy, it makes no effort to achieve that goal for the riskiest institutions. In its comment letter, Better Markets urges the Fed to adjust the guidelines to prevent the riskiest institutions from being granted access until robust standards are implemented or at least require Fed Board involvement and lengthy minimum assessment timelines. Without sufficient risk management standards and assertive oversight, these requirements are necessary to protect the American taxpayer, the financial system, and the economy.”

Read our full comment letter here.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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