Law Commons^™

From Cannabis To Crypto: Federal Reserve Discretion In Payments, Julie Andersen Hill

Articles

From its inception, the Federal Reserve has operated payment systems that let banks move money for their customers. Checks, wire transfers, and electronic consumer payments all happen thanks to the Federal Reserve. Congress by statute specified which banks get access to the Fed's payment services. For more than a century, the Federal Reserve provided services to all legally eligible banks. But when the Federal Reserve received requests for payments access from a cannabis-focused credit union and a cryptocurrency custody bank (both of whom are legally eligible), it denied them. The Fed also issued sweeping guidelines claiming discretion to conduct risk …

Opening A Federal Reserve Account, Julie Andersen Hill

Articles

To open bank accounts, new customers provide personal information and make a deposit. Within a few minutes (or perhaps a few days), new customers get access to payment services. For many years, the process financial institutions used to open accounts at FederalReserve Banks was similar. Eligible banks filled out a one-page form and within a week received an account allowing them access to the FederalReserve's payment systems. Recently, however, Federal Reserve Banks have spent years considering account requests from novel banks.

This Article examines the Federal Reserve's process for evaluating requests for accounts. Using interviews, court documents, and other sources, …