According to the Federal Reserve Board’s guidance, institutions offering new types of financial products or with novel charters—such as cryptocurrency firms— have grown in recent years, and many have requested access to so-called “master accounts” and payment services by Reserve Banks. “The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system,” Vice Chair Lael Brainard stated in a press release.
According to the Federal Reserve Board, the final guidelines don’t stray too far from those issued in its May 2021 proposal and March 2022 supplemental proposal. However, the Board noted it did refine its tiered review approach “to provide more comparable treatment between non-federally-insured institutions chartered under state and federal law.”
Some firms, depending on the level of risk they pose, will require a deeper level of due diligence and scrutiny by Reserve Banks. Specifically, the final guidance states that access requests by Tier 1 institutions (those insured by the Federal Deposit Insurance Corporation) “will generally be subject to a less intensive and more streamlined review,” while Tier 2 institutions (eligible institutions that aren’t federally insured but are subject by statute to prudential supervision by a federal banking agency) “will generally receive an intermediate level of review.”
Access requests by Tier 3 institutions (eligible institutions that aren’t federally insured and aren’t considered in Tier 2) “will generally receive the strictest level of review.” The Federal Reserve Board cited an example in which cryptocurrency firms, “for which authorities are still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.