Federal Reserve Board seeks comment on payment account proposal for eligible institutions and pause on Tier 3 access decisions

The Federal Reserve Board has requested public comment on a proposal to create a payment account that legally eligible financial institutions could use only to clear and settle payments through Federal Reserve payment services. The proposal is intended to address demand for direct access from institutions with a wider range of business models while limiting risks to Reserve Banks and the payment system. It would not expand or otherwise change legal eligibility for Federal Reserve accounts or payment services. The proposed account is substantially similar to the prototype the Board outlined in its December 2025 request for information. Payment account holders would not have access to intraday credit or the discount window, would not earn interest on balances held at a Reserve Bank, and would only be able to use payment services with automated controls to prevent overdrafts. Reserve Banks would also expect holders to mitigate illicit finance risks. Changes from the earlier prototype include linking closing balance limits to an institution's expected payment activity and increasing the maximum closing balance. To support clearer and more consistent implementation, the Board is also encouraging Reserve Banks to temporarily pause decisions on access requests from institutions in Tier 3 of the Board's Account Access Guidelines while the payment account policy is being finalized. The comment period will close 60 days after publication in the Federal Register.