$104.06 trillion. That’s the value that moved through FedACH in 2024, and it’s the one rail the Federal Reserve just excluded from its new fintech-friendly payment account.
The Fed’s Payment Account proposal, docket OP-1878, closed for public comment today. It would let institutions already legally eligible for a Reserve Bank account get a narrower, special-purpose account instead of a full Master Account: access to Fedwire Funds, FedNow, National Settlement Service and Fedwire Securities, capped at $1 billion in normal circumstances. No intraday credit, no discount window, no interest, and overdrafts get rejected outright. FedACH isn’t on the list.
The Financial Technology Association says that omission guts the whole idea. Payroll, direct deposit, government disbursements, consumer bill pay: all ACH. Without it, fintechs still need a bank in the middle.
Community banks want the opposite fix. ABA and CBA argue non-federally-insured applicants shouldn’t get direct Fed access without matching BSA/AML and sanctions oversight, and warn the accounts could pull deposits straight out of small-town lenders.
Here’s the real stake: two banks handled roughly half of U.S. ACH transactions in 2024, per Nacha figures the FTA cites. Keep FedACH walled off and that concentration holds. Open it, even partially, and the Fed rewrites who gets to originate payments in this country. That’s a bigger call than any single fintech’s account application.
The Fed set 45- and 90-day review targets for the new accounts, but they’re targets, not deadlines. The real deadline was today. Now the Board decides who was right.
Marcus Webb