The Federal Reserve’s May 20 payment account proposal is the most concrete answer yet to a question the industry has debated for years: what does FinTech access to Reserve Bank infrastructure actually look like in practice?
The proposal creates a new special-purpose account category called the “payment account,” which allows legally eligible non-bank institutions to clear and settle through Fedwire and FedNow. The structure deliberately excludes interest on balances, discount window access, and intraday credit. The Fed revised both the Payment System Risk Policy and the Account Access Guidelines to accommodate this design, while pausing Tier 3 account decisions during policy development.
The Trump executive order of May 19 directed the Fed to complete a “comprehensive evaluation” of its account access framework within 120 days. The Fed’s proposal arrived one day later, technically independent, but the sequencing signals convergence on a narrower path than broad master account access.
For FinTechs, the offer is real but bounded. Direct settlement could reduce reliance on sponsor banks and correspondent relationships. Closing balances are capped at $1 billion per Reserve Bank, with individual limits set by each Reserve Bank based on payment activity. Access doesn’t reduce the compliance burden — it shifts more of it in-house. BSA/AML programs, sanctions screening, fraud monitoring, and operational resiliency aren’t outsourceable once you’re a direct participant.
I read the proposal this week. The framing is deliberate: “lower-risk” is defined by the controls paired with the account, not the nature of the institution holding it. Any FinTech board that read “direct Fed access” as a compliance simplification should read the Account Access Guidelines again. They don’t disappear. They follow you in.
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— Rebecca Lauren