A proposed rule that would require the Federal Reserve Banks to periodically publish lists of the depository institutions that have access to their accounts (“master accounts”) and payment services was released for comment Friday by unanimous vote of the Federal Reserve Board.
The proposal, out for a 60-day comment period, is described by the Fed as an enhancement to the Account Access Guidelines published this August to establish a transparent, risk-based, and consistent set of factors for the Reserve Banks to use in reviewing requests to access these accounts and services.
“The longstanding practice of both the Board and the Reserve Banks has been to not disclose account-related information to the general public on the basis that such information is considered confidential business information,” the Fed said in its proposed rule notice for the Federal Register. “However, the development and publication of the Account Access Guidelines prompted the Board to consider the potential benefits of expanding the disclosure of the names of institutions that have access to accounts and services. For example, the Board received comments and inquiries from a range of stakeholders calling for greater public disclosure of account-related information.”
The proposed rule would add a Section 3 to the guidelines titled “Public Disclosure.” Key features are described as follows:
- On a quarterly basis, the Reserve Banks would produce a single, Federal Reserve System-wide report with two lists: (1) a list of federally insured depository institutions with access to accounts and services, and (2) a list of non-federally insured depository institutions with access to accounts and services. The report would be posted to a Federal Reserve System public website shortly after the end of the quarter. The quarterly cadence would be intended to balance providing timely public transparency with reducing potential reputational harm to institutions that have had their access to accounts and services removed since the previous report.
- The report would include two data elements for each institution with access to accounts and services: (1) institution name, and (2) the Reserve Bank district in which the institution is located.
- In a separate section, the report also would identify (1) the institutions that have received access to accounts and services since the publication of the previous report, and (2) the institutions that no longer have access to accounts and services since the publication of the previous report.
The Fed said all comments are welcome, but it would particularly welcome comments on the following:
- Would the two data elements in the proposed Public Disclosure section appropriately balance providing public transparency with protecting information that institutions consider to be confidential?
- Would the proposed publication schedule (quarterly cadence) appropriately balance providing timely transparency with reducing potential reputational harm to institutions that no longer have access to accounts and services? Would a less frequent cadence, such as semi-annual publication, strike that balance more effectively?
- Are there additional data elements for each institution with access to accounts and services that the Federal Reserve should consider publishing to provide greater transparency to the public (such as the date on which access was provided, to extent known, or removed, location of the institution, etc.)? Are there additional data elements that the Federal Reserve should avoid publishing to prevent potential harm to these depository institutions?
- Are there additional actions that the Board or Reserve Banks should take to provide transparency with respect to accounts and services? For example, should the Board establish a requirement for the Reserve Banks to publish a list of institutions that have requested an account or access to services (including the date on which the request was submitted, rejected, or withdrawn, etc.)?
- Should categories of private sector institutions with access to accounts and services that are not covered by the Guidelines, such as designated financial market utilities, be scoped into the proposed Public Disclosure section?
Federal Reserve Board invites public comment on a proposal to publish a periodic list of depository institutions that have access to Federal Reserve accounts—often referred to as “master accounts”— and payment services