For years, the debate was over Federal Reserve Account access has largely focused on who logs in.
The latest executive and regulatory moves suggest that the next phase of the discussion may be about what happens after entry, especially for fintech companies that are likely to demand access.
The executive order issued by President Donald Trump on Tuesday (May 19), “Integrating FinTech innovation into regulatory frameworks,” directs federal agencies to examine access to regulated financial infrastructure, stating that federal policy should “simplify regulatory processes, reduce unnecessary barriers to entry, and encourage cooperation among fintech companies, federally regulated financial institutions, and federal financial regulators.”
One of the most important orders falls directly to the Federal Reserve. The Fed is required to conduct a “comprehensive assessment” of the legal, regulatory and policy framework governing access to Reserve Bank accounts and payment services by uninsured depository institutions and non-bank financial companies.
There is a wide range of potential participants, including companies involved in digital assets and other new financial activities. FinTech is defined in the order as providing “any application or any digital or online technology that facilitates access to, management of, or data processing of financial products or services. Such financial products or services may include, but are not limited to, payment processing, lending, deposit taking, derivatives, investment management, brokerage services, underwriting and capital market activities,” among other endeavors.
Follow the Federal Reserve Bank-higher
The Federal Reserve followed suit on Wednesday (May 20). an offer A comment request provides a narrower path than broad main account access. This proposal is not a direct response to the White House, but it signals a final meeting of evolving policies that converge on the role of banking and the role of fintech companies in banking.
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Instead of expanding the Fed’s full participation rights, the Board proposed a new class of special-purpose “payment accounts” designed to clear and settle payment activity while intentionally excluding many of the traditional benefits associated with Reserve Bank accounts.
The proposal would review both Payment system risk policy and Account access instructions To accommodate these accounts while pausing decisions on some Level 3 account requests while the policy is developed.
Under this proposal, payment account balances would not earn interest, account holders would not have access to the debit window, and would not be able to access daily credit from the Federal Reserve. Instead, access will be limited to payment services where automated controls can prevent overdrafts, including… Fedwire Money Service and FedNow® Service.
This design suggests what may be a central political compromise emerging from Washington, which is more direct involvement in payment pathways without expanding the broader public sector support mechanisms built around the banking model.
For fintech companies, direct settlement can reduce reliance on sponsor banks and correspondent relationships. Payments-focused companies have claimed that direct access may reduce transaction costs, increase settlement speed, and reduce concentration risks resulting from reliance on a small number of intermediaries. The Fed directly acknowledged these arguments in outlining the proposal.
Real-time settlement may create new space Treasury management Models, more compact Liquidity Positioning and products built on permanent operation Money movement Instead of cutting off banking services.
But the proposal also makes clear that access does not diminish responsibility.
The Fed has repeatedly framed accounts payable as a less risky structure only because it is associated with clear controls and governance expectations. Payment account holders continue to be expected to meet the risk management standards included in the Account Access Guidelines and maintain appropriate operating and compliance frameworks for direct participation in the infrastructure.
Anti-money laundering controls, fraud monitoring, sanctions compliance, operational resilience and liquidity planning are becoming more difficult to outsource. The Fed proposed closing balance limits tied to payment activity, with individual limits set by the Reserve Banks at a maximum of $1 billion, while continuing to prohibit access to intraday credit.
The board also said that all account holders must prove their strength Bank secrecy law/ Anti-money laundering and sanctions compliance programs and show that they are able to manage the illicit financing risks associated with account access.
The executive order opened the door to rethinking accessibility, but setting commitments (and meeting those commitments) will bring scrutiny to preparedness.
