Proposal aims to provide direct access to Fed payment services for eligible institutions, including non-federally insured firms, to enhance efficiency.
The Federal Reserve Board has proposed establishing a ‘payment account’ for legally eligible financial institutions to streamline clearing and settlement processes. The move follows growing demand from institutions seeking direct access to Fed payment services to reduce costs and accelerate transactions.
The proposal builds on a December 2025 request for information and targets institutions not currently federally insured. Payment account holders would not receive intraday credit, discount window access, or interest on balances, mitigating risks to the Reserve Banks and broader payment system.
Public comments on the proposal are open, with the Fed emphasizing the need to balance innovation with risk management as the payments landscape evolves.