WASHINGTON--The Federal Reserve has proposed a suite of changes to its policies and rules to create a special purpose account called the Payment Account. In response, America’s Credit Unions Innovation and Technology team provided written comments outlining what credit unions would like to see before a final rule is issued.
The letter shares concerns raised with an earlier request for information (RFI) and recommends the Federal Reserve Board revise the proposal to specify concrete Bank Secrecy Act/anti-money laundering (BSA/AML) safeguards—including the supervisory framework that would apply to certain nontraditional Payment Account holders—and reissue the proposal for public comment before adopting any final rule or policy.
The letter specifically points out:
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The proposal appropriately preserves the Statutory Eligibility Criteria for account access
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The Board should articulate specific BSA/AML safeguards and reissue the proposal for public comment before finalization
- The payment account’s credit risk mitigants are sensible, but operational risks warrant continued attention and specialized supervision
In addition, the letter outlined credit union support for related proposed amendments to Regulations A and D. The letter noted the changes mitigate risk by excluding the proposed payment accounts from the discount window and from earning interest on balances maintained at a Reserve bank.