Proposed Rule2026-10376
Regulation A: Extensions of Credit by Federal Reserve Banks
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 26, 2026
Issuing agencies
Federal Reserve System
Abstract
The Board of Governors of the Federal Reserve System (Board) proposes to amend its Regulation A (Extensions of Credit by Federal Reserve Banks) to specify that a holder of a proposed special-purpose payment account (a Payment Account) would not be eligible for access to discount window credit made available by the Federal Reserve Banks (Reserve Banks). The proposal would change neither the existing programs under which the Reserve Banks generally provide discount window credit (primary credit, secondary credit, and seasonal credit) nor the process for establishing the primary credit, secondary credit, and seasonal credit rates.
Full Text
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<title>Federal Register, Volume 91 Issue 100 (Tuesday, May 26, 2026)</title>
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[Federal Register Volume 91, Number 100 (Tuesday, May 26, 2026)]
[Proposed Rules]
[Pages 30498-30503]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10376]
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FEDERAL RESERVE SYSTEM
12 CFR Part 201
[Docket No. R-1892]
RIN 7100-AH24
Regulation A: Extensions of Credit by Federal Reserve Banks
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
proposes to amend its Regulation A (Extensions of Credit by Federal
Reserve Banks) to specify that a holder of a proposed special-purpose
payment account (a Payment Account) would not be eligible for access to
discount window credit made available by the Federal Reserve Banks
(Reserve Banks). The proposal would change neither the existing
programs under which the Reserve Banks generally provide discount
window credit (primary credit, secondary credit, and seasonal credit)
nor the process for establishing the primary credit, secondary credit,
and seasonal credit rates.
DATES: Comments must be received on or before July 27, 2026.
ADDRESSES: You may submit comments, identified by Docket No. R-1892 and
RIN 7100-AH24, by any of the following methods:
<bullet> Agency Website: <a href="https://www.federalreserve.gov/apps/proposals/">https://www.federalreserve.gov/apps/proposals/</a>. Follow the instructions for submitting comments, including
attachments. Preferred Method.
<bullet> Mail: Benjamin W. McDonough, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and
[[Page 30499]]
Constitution Avenue NW, Washington, DC 20551.
<bullet> Hand Delivery/Courier: Same as mailing address.
<bullet> Other Means: <a href="/cdn-cgi/l/email-protection#a4d4d1c6c8cdc7c7cbc9c9c1cad0d7e4c2d6c68ac3cbd2"><span class="__cf_email__" data-cfemail="f78782959b9e9494989a9a92998384b7918595d9909881">[email protected]</span></a>. You must include the
docket number in the subject line of the message.
Comments received are subject to public disclosure. In general,
comments received will be made available on the Board's website at
<a href="https://www.federalreserve.gov/apps/proposals/">https://www.federalreserve.gov/apps/proposals/</a> without change and will
not be modified to remove personal or business information including
confidential, contact, or other identifying information. Comments
should not include any information such as confidential information
that would be not appropriate for public disclosure. Public comments
may also be viewed electronically or in person in Room M-4365A, 2001 C
St. NW, Washington, DC 20551, between 9 a.m. and 5 p.m. during Federal
business weekdays.
FOR FURTHER INFORMATION CONTACT: Benjamin Snodgrass, Special Counsel
(202-263-4877), Legal Division, or Lyle Kumasaka, Lead Financial
Institution and Policy Analyst (202-452-2382), Division of Monetary
Affairs. For users of TTY-TRS, please call 711 from any telephone,
anywhere in the United States or (202) 263-4869.
SUPPLEMENTARY INFORMATION:
I. Overview
As described elsewhere in today's Federal Register, the Board is
requesting comment on proposed updates to (1) the Federal Reserve's
Policy on Payment System Risk (PSR Policy) and (2) the Board's
guidelines for Reserve Banks to utilize in evaluating requests for
access to Reserve Bank accounts and services (the Account Access
Guidelines), to accommodate Payment Accounts. That request for comment
(the Payment Account Notice) follows a request for information (RFI)
previously published by the Board.\1\ The Payment Account would be a
new, optional way for institutions to request access to accounts and
services. As proposed in the Payment Account Notice, the Payment
Account would have a standard set of risk-mitigating terms designed to
create a lower residual risk profile than a master account.\2\ The
Board explains in the Payment Account Notice that the terms of the
proposed Payment Account would permit a more streamlined review of
requests for such accounts.\3\
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\1\ 90 FR 60096 (Dec. 23, 2025).
\2\ As used in this notice of proposed rulemaking, the phrase
``Payment Account terms'' (and similar phrases) refers to the
standard set of parameters of the Payment Account as proposed by the
Board in proposed revisions to Regulation A, Regulation D, the
Account Access Guidelines, and the PSR Policy and as would be
implemented by the Reserve Banks through their Operating Circulars
and other agreements.
\3\ Proposed revisions to the PSR Policy would provide that an
institution generally may only maintain one account with a Reserve
Bank, either a Payment Account or a master account.
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In this notice of proposed rulemaking (NPR), the Board proposes to
amend Regulation A to specify that a holder of a Payment Account would
not be eligible for discount window credit. The proposed amendments
complement the proposed risk-mitigating terms for Payment Accounts that
are described more fully in the Payment Account Notice. This
SUPPLEMENTARY INFORMATION comprises six parts. Section I provides a
high-level overview of the proposal. Section II discusses the RFI and
summarizes comments on the RFI germane to this NPR. Section III
provides statutory and regulatory background. Section IV discusses the
rationale for the proposal and describes the revisions the Board
proposes to make to Regulation A. Section V solicits feedback on the
proposal broadly and on questions regarding specific aspects of the
proposal. Section VI addresses several administrative law matters.
II. Payment Account RFI and Comments Received
The RFI, published in the Federal Register on December 23, 2025,
sought public input on a prototype Payment Account and potential
updates to the Account Access Guidelines. The prototype Payment Account
described in the RFI would be designed for the purpose of clearing and
settling the Payment Account holder's payment activity. The Board
explained that Payment Accounts would have a standard set of risk-
mitigating terms, including that an institution holding a Payment
Account would not be permitted to access intraday or discount window
credit from Reserve Banks. The Board noted in the RFI that limiting
access to Reserve Bank credit would reduce the risk that a Payment
Account holder could pose to a Reserve Bank.\4\ The Board invited
comments on all aspects of the RFI.
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\4\ Id. at 60098.
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The Board received 72 comments on the RFI. Commenters discussing
the discount window included trade associations representing commercial
banks and money transmitters, non-traditional institutions, a nonprofit
organization, and others.
A majority of these commenters supported the Board's proposal not
to permit Payment Account holders to access discount window credit as
part of the standard set of terms for Payment Accounts. These
commenters cited several reasons. One commenter argued that not
providing discount window access to Payment Account holders would
mitigate moral hazard concerns. The commenter stated that access to the
discount window might create expectations of government support and
encourage excessive risk taking. Commenters also addressed the discount
window as a tool of monetary policy and systemic liquidity support.
They asserted that the discount window should be available only to
full-service depository institutions subject to a full complement of
prudential standards, capital and liquidity oversight, and supervisory
expectations. Commenters also noted that not permitting discount window
access to Payment Account holders would mitigate risk to Reserve Banks.
Among commenters that discussed the discount window, a minority
expressed support for discount window access. A number of commenters
suggested that the Board consider some discount window access in
unusual or exigent circumstances, including to mitigate the effects of
operational incidents and significant stablecoin redemptions. Another
commenter, while not necessarily advocating for discount window access,
noted that a prefunding model coupled with prohibitions on daylight
overdrafts and lack of access to discount window credit could constrain
money creation and limit Payment Accounts to fully funded payments.
III. Statutory and Regulatory Background
The discount window plays an important role in supporting the
liquidity and stability of the banking system and the effective
implementation of monetary policy. By providing ready access to
funding, the discount window helps depository institutions manage their
liquidity risks efficiently and avoid actions that have negative
consequences for their customers, such as withdrawing credit during
times of market stress. Thus, the discount window supports the smooth
flow of credit to households and businesses. Providing liquidity in
this way is one of the original purposes of the Federal Reserve System.
The statutory framework for the discount window is set forth in the
Federal Reserve Act
[[Page 30500]]
(FRA), and general policies that govern discount window lending are set
forth in Regulation A. The twelve Reserve Banks administer the discount
window within this framework.
Several sections of the FRA authorize Reserve Banks to extend
credit to member banks, depository institutions, and branches and
agencies of foreign banks. Reserve Banks generally extend credit
pursuant to sections 10B, 13(14), and 19(b)(7) of the FRA. Section 10B
of the FRA provides that any Reserve Bank, under rules and regulations
prescribed by the Board, may make advances to any member bank on its
time or demand notes, subject to certain maturity limitations, and
which are secured to the satisfaction of the Reserve Bank.\5\ Section
13(14) of the FRA provides that, subject to such restrictions,
limitations, and regulations as may be imposed by the Board, each
Reserve Bank may discount paper endorsed by and make advances to any
branch or agency of a foreign bank in the same manner and to the same
extent that the Reserve Bank may exercise such powers with respect to a
member bank, if the branch or agency is maintaining reserves with the
Reserve Bank pursuant to section 7 of the International Banking Act of
1978 (codified at 12 U.S.C. 3105).\6\ Section 19(b)(7) of the FRA
provides that any ``depository institution'' in which transaction
accounts or nonpersonal time deposits are held shall be entitled to the
same discount and borrowing privileges as member banks.\7\ Certain
other provisions of the FRA authorize Reserve Banks to extend credit
through discounts and advances to depository institutions, such as
sections 13(2) and 13(8) of the FRA.\8\
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\5\ 12 U.S.C. 347b(a). In addition, FRA section 4(8) provides
that a Reserve Bank may, subject to the provisions of law and the
orders of the Board, extend to each member bank such discounts,
advancements, and accommodations as may be safely and reasonably
made with due regard for the claims and demands of other member
banks, the maintenance of sound credit conditions, and the
accommodation of commerce, industry, and agriculture. The Board of
Governors may prescribe regulations further defining within the
limitations of the FRA the conditions under which discounts,
advancements, and the accommodations may be extended to member
banks. 12 U.S.C. 301.
\6\ 12 U.S.C. 347d.
\7\ 12 U.S.C. 461(b)(7). The term ``depository institution'' is
defined in FRA Sec. 19(b)(2). 12 U.S.C. 461(b)(2).
\8\ See, e.g., 12 U.S.C. 343 and 347.
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The Board's Regulation A (12 CFR part 201) provides that the
Federal Reserve System extends credit with due regard to the basic
objectives of monetary policy and the maintenance of a sound and
orderly financial system.\9\ It establishes rules under which a Reserve
Bank may extend credit to depository institutions and, as provided in
Sec. 201.1(b), U.S. branches and agencies of foreign banks that are
subject to reserve requirements under the Board's Regulation D (12 CFR
part 204). Section 201.2 of Regulation A defines certain terms,
including the term ``depository institution.'' To qualify as a
depository institution for purposes of Regulation A, an institution
must maintain reservable transaction accounts or nonpersonal time
deposits.\10\ The term ``depository institution'' excludes bankers'
banks and corporate credit unions that are not required to maintain
reserves under Sec. 204.1(c)(4) of Regulation D.\11\
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\9\ 12 CFR 201.1(b).
\10\ In addition, an institution must be (i) an insured bank as
defined in section 3 of the Federal Deposit Insurance Act (FDI Act)
(12 U.S.C. 1813(h)) or a bank that is eligible to make application
to become an insured bank under section 5 of such act (12 U.S.C.
1815); (ii) a mutual savings bank as defined in section 3 of the FDI
Act (12 U.S.C. 1813(f)) or a bank that is eligible to make
application to become an insured bank under section 5 of such act
(12 U.S.C. 1815); (iii) a savings bank as defined in section 3 of
the FDI Act (12 U.S.C. 1813(g)) or a bank that is eligible to make
application to become an insured bank under section 5 of such act
(12 U.S.C. 1815); (iv) an insured credit union as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752(7)) or a credit
union that is eligible to make application to become an insured
credit union pursuant to section 201 of such act (12 U.S.C. 1781);
(v) a member as defined in section 2 of the Federal Home Loan Bank
Act (12 U.S.C. 1422(4)); or (vi) a savings association as defined in
section 3 of the FDI Act (12 U.S.C. 1813(b)) that is an insured
depository institution as defined in section 3 of the act (12 U.S.C.
1813(c)(2)) or is eligible to apply to become an insured depository
institution under section 5 of the act (12 U.S.C. 15(a)).
\11\ See 12 CFR 201.2(c)(2). Hereafter, unless the context
otherwise requires, references to ``depository institution'' should
be read to include branches and agencies of foreign banks.
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Section 201.3 of Regulation A sets forth general provisions for
extensions of credit by Reserve Banks. As provided in Sec.
201.3(a)(1), a Reserve Bank may lend to a depository institution either
by making an advance secured by acceptable collateral under Sec. 201.4
or by discounting certain types of paper, but a Reserve Bank generally
extends credit by making an advance. Section 201.3(a)(2) provides that
an advance made to a depository institution must be secured to the
satisfaction of the Reserve Bank making the advance and sets forth a
non-exclusive list of asset types that are satisfactory collateral.
Section 201.3(a)(3) addresses use of discounts in lieu of advances.
Section 201.3(b) states that no person or entity is entitled to obtain
any credit or any increase, renewal, or extension of maturity of any
credit from a Reserve Bank. Section 201.3(c) prescribes certain
information requirements related to discount window credit. Finally,
Sec. 201.3(d) pertains to indirect credit obtained by one depository
institution as an agent or medium for another depository institution.
Section 201.4(a) through (c) of Regulation A sets forth the three
discount window programs under which the Reserve Banks extend credit.
IV. Proposed Revisions
The Board proposes to amend Sec. 201.2 and Sec. 201.3 of
Regulation A to define the term ``payment account'' and to specify that
a Payment Account holder is not eligible for access to discount window
credit from the Reserve Banks.
A. Rationale for Proposed Revisions
As explained in the Payment Account Notice, the Board has continued
to monitor developments in the payments ecosystem since the Board
issued the Account Access Guidelines, including the development of new
financial products and technologies. Since then, the types of
institutions seeking accounts and services have continued to evolve.
Several institutions focused on payments innovation have explained that
they are interested in direct access to accounts and services, as
opposed to having to rely on third-party intermediaries to access
services, to reduce costs to their customers and reduce risks while
increasing payment processing speed. The Board is proposing to create a
Payment Account as a new, optional way for institutions to request
access to accounts and services to support private-sector payments
innovation while prudently managing the risks identified in the Account
Access Guidelines. As part of the standard set of risk-mitigating terms
applicable to Payment Accounts, the Board proposes not to permit
discount window access for Payment Account holders.
The Board believes that not permitting discount window access for
Payment Account holders would mitigate risk to the Reserve Banks (and
by extension to the American public) in a consistent and transparent
manner across different types of Payment Account holders with novel and
diverse business models and risk profiles.\12\ The Board anticipates
that Payment Account holders generally would not be federally insured
(that is, they would be Tier 2 or Tier 3 institutions under the Account
Access Guidelines), and, as noted in the Payment Account Notice, Tier 2
and
[[Page 30501]]
Tier 3 institutions may present greater risk than federally insured
institutions.
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\12\ The FRA requires the Reserve Banks to remit excess earnings
to the U.S. Treasury after providing for operating costs, payments
of dividends, and an amount necessary to maintain surplus. 12 U.S.C.
289(a)(3).
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In addition, different Payment Account holders will be subject to
varying insolvency regimes. Resolution of federally insured
institutions follows clear, consistent, and well-established rules for
paying Reserve Banks and other creditors of a failed institution.
Insolvency regimes applicable to uninsured Payment Account holders may
be new or may involve the application of rarely applied state and
federal laws. Moreover, uninsured Payment Account holders would likely
not be subject to a framework of prudential supervision and regulation
that is as robust as that applied to federally insured depository
institutions. Finally, data available to Reserve Banks may vary across
Payment Account holders. Current credit risk monitoring at Reserve
Banks relies mostly on supervisory information received from within the
Federal Reserve System or from other federal regulators, and similar
information on the full range of potential Payment Account holders may
not be readily available.
In addition to mitigating risk to the Reserve Banks, not permitting
discount window access to Payment Account holders would mitigate risks
posed by Payment Accounts to the financial sector and economy. Payment
Account holders may engage in novel and diverse business models that
involve greater and less-predictable risk-taking than business models
of insured depository institutions, and liquidity provision to such
firms could incentivize risk-taking behavior. Although such incentives
exist across all institutions, Payment Account holders will also be
subject to different supervisory frameworks in a rapidly evolving
regulatory environment. The Board believes that not permitting discount
window access for Payment Account holders would mitigate risk to the
financial sector and the economy in a consistent and transparent manner
across different types of Payment Account holders that present varying
levels of risk.
The Board could, alternatively, leave unchanged the current
discount window eligibility requirements in Regulation A.\13\ It is
possible that permitting discount window access for Payment Account
holders that otherwise meet the current eligibility criteria under
Regulation A may support broader financial stability and the Federal
Reserve's monetary policy implementation goals. Discount window access
would help such Payment Account holders obtain liquidity during periods
of stress and could potentially support control of the federal funds
rate under certain circumstances. On balance, however, and having
considered the comments received, the Board believes it is appropriate
not to permit Payment Account holders to access the discount window.
Not permitting discount window access for Payment Account holders would
mitigate risk to the Reserve Banks, the financial system, and the
economy in a consistent and transparent manner across different types
of Payment Account holders that may present varying levels of risk. It
would also be consistent with the other terms proposed for Payment
Accounts discussed in the Payment Account Notice, which are designed as
a standard set of risk mitigants for Payment Accounts.
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\13\ As discussed above Regulation A establishes rules under
which a Reserve Bank may extend credit to depository institutions
that maintain reservable transaction accounts or non-personal time
deposits and to U.S. branches and agencies of foreign banks that are
subject to reserve requirements under the Board's Regulation D (12
CFR part 204).
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B. Proposed Revisions to Sec. 201.2 (Definitions) and Sec. 201.3
(Extensions of Credit Generally)
Currently, Regulation A addresses eligibility for the discount
window by reference to whether an institution is a ``depository
institution'' as defined in Sec. 201.2(c) or, as provided for in Sec.
201.1(b), a branch or agency of a foreign bank subject to reserve
requirements under Regulation D (12 CFR part 204). The Board proposes
to define the term ``payment account'' in a new Sec. 201.2(d) as the
record maintained by a Reserve Bank of the debtor-creditor relationship
between the Reserve Bank and a single depository institution with
respect to deposit balances of the depository institution that are
maintained with the Reserve Bank and which is governed by an agreement
that states the account is a payment account.\14\ This definition is
structured similarly to the definition of ``master account'' in
Regulation D and the proposed definition of ``payment account'' set
forth in the Board's proposal, published elsewhere in today's Federal
Register, to amend Regulation D.\15\ However, the proposed definitions
for Regulation A and Regulation D differ somewhat based on the
terminology used in each regulation.\16\ Current Sec. 201.2(d) through
(f) would be renumbered accordingly.
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\14\ The Board intends the definition of ``payment account'' to
also include payment accounts of U.S. branches and agencies of
foreign banks. See 12 CFR 201.1(b) (noting that, except otherwise
provided, Regulation A applies to U.S. branches and agencies of
foreign banks that are subject to reserve requirements under
Regulation D in the same manner and to the same extent as Regulation
A applies to depository institutions).
\15\ In the Payment Account Notice, published elsewhere in
today's Federal Register, the Board describes a Payment Account as a
special purpose account designed for the purpose of clearing and
settling payments activity of an institution, its depositors, and
its other customers. For purposes of Regulation A, the Board does
not believe it is necessary to describe the functions of a Payment
Account and that an agreement-based definition will be easy to
administer by the Reserve Banks.
\16\ The definition of payment account in Regulation D would
refer to ``eligible institutions,'' a term that is used only in
Regulation D and defines the types of institutions that may earn
interest on reserve balances under Regulation D.
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The Board proposes to revise Sec. 201.3(a)(1) to specify that a
Reserve Bank may lend to a depository institution, except as described
in proposed new Sec. 201.3(a)(4), either by making an advance secured
by acceptable collateral under Sec. 201.4 or by discounting certain
types of paper. Proposed Sec. 201.3(a)(4) would specify that a Reserve
Bank may not lend under Sec. 201.4(a), (b), or (c) to a depository
institution that holds a payment account.\17\ Section 201.3(a)(1) would
continue to specify that a Reserve Bank generally extends credit by
making an advance.
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\17\ Regulation A Sec. 201.4(a), (b), and (c) set forth the
primary credit, secondary credit, and seasonal credit programs,
respectively.
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The proposed revisions to Regulation A would prohibit access to the
discount window only for depository institutions that hold Payment
Accounts and would have no effect on discount window eligibility for
other depository institutions, whether those institutions access the
discount window through their own master accounts or through the master
account of a correspondent.\18\
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\18\ Reserve Banks have no obligation to extend discount window
credit to any depository institution. See 12 U.S.C. 347b(b)(4) (``A
Federal Reserve bank shall have no obligation to make, increase,
renew, or extend any advance or discount under [the FRA] to any
depository institution.''); 12 CFR 201.3(b) (``This section does not
entitle any person or entity to obtain any credit or any increase,
renewal or extension of maturity of any credit from a Federal
Reserve Bank.'').
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V. Request for Comment
The Board invites comment on all aspects of the proposed revisions.
In addition, the Board invites feedback on the following specific
questions related to the proposal:
1. Has the Board appropriately identified and considered the
potential risks and benefits of permitting or not permitting Payment
Account holders to access discount window credit? Are
[[Page 30502]]
there other potential risks and benefits the Board should consider?
2. Should the Board instead retain the existing eligibility
requirements for the discount window set forth in Regulation A? If so,
why?
3. Should the Board instead consider a narrow restriction on
eligibility for discount window credit (e.g., a restriction applicable
to only certain types of Payment Account holders) or permit access to
discount window credit for Payment Account holders in limited
circumstances (e.g., periods of significant market stress)? If so, why?
How should the Board define these restrictions or limitations?
VI. Administrative Law Matters
A. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA),
requires an agency to consider the impact of its rules on small
entities.\19\ In connection with a proposed rule, the RFA generally
requires an agency to prepare an Initial Regulatory Flexibility
Analysis (IRFA) describing the impact of the rule on small entities,
unless the head of the agency certifies that the proposal will not have
a significant economic impact on a substantial number of small entities
and publishes such certification along with a statement providing the
factual basis for such certification in the Federal Register. An IRFA
must contain (i) a description of the reasons why action by the agency
is being considered; (ii) a succinct statement of the objectives of,
and legal basis for, the proposal; (iii) a description of, and, where
feasible, an estimate of the number of small entities to which the
proposal will apply; (iv) a description of the projected reporting,
recordkeeping, and other compliance requirements of the proposal,
including an estimate of the classes of small entities that will be
subject to the requirement and the type of professional skills
necessary for preparation of the report or record; (v) an
identification, to the extent practicable, of all relevant Federal
rules that may duplicate, overlap with, or conflict with the proposal;
and (vi) a description of any significant alternatives to the proposal
that accomplish its stated objectives and minimize any significant
economic impact of the proposed rule on small entities.\20\
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\19\ Under regulations issued by the U.S. Small Business
Administration (SBA), a small entity includes a depository
institution, bank holding company, or savings and loan holding
company with total assets of $850 million or less. See 13 CFR
121.201. Consistent with the SBA's General Principles of
Affiliation, the Board includes the assets of all domestic and
foreign affiliates toward the applicable size threshold when
determining whether to classify a particular entity as a small
entity. See 13 CFR 121.103.
\20\ 5 U.S.C. 603(b)-(c).
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The Board is providing an IRFA with respect to the proposal. The
Board believes that the proposal will not have a significant economic
impact on a substantial number of small entities. Payment accounts
would be a new, optional way for institutions to request access to
Reserve Bank accounts and services. Institutions would retain the
option of requesting a master account or not requesting any account,
and eligibility for access to the discount window would remain
unchanged for master account holders and non-account holders. The
proposal, therefore, would not impose mandatory requirements on any
small entities. The Board invites comment on all aspects of this IRFA.
1. Reasons Action is Being Considered
As discussed in this Supplementary Information, the Board is
proposing to amend Sec. 201.2 and Sec. 201.3 of Regulation A in
connection with the Board's proposal to update the PSR Policy and
Account Access Guidelines.
2. Objectives of and Legal Basis for the Proposal
As discussed in this Supplementary Information, the proposal
relates to proposed amendments to the PSR Policy and Account Access
Guidelines regarding Payment Accounts and would implement a proposed
standard term applicable to Payment Accounts. The Reserve Banks
generally extend credit pursuant to sections 10B, 13(14), and 19(b)(7)
of the FRA. Each of those sections of the FRA authorizes the Board to
prescribe regulations regarding the Reserve Banks' extensions of
credit.
3. Description and Estimate of the Number of Small Entities
Under Regulation A, Reserve Banks may extend discount window credit
to ``depository institutions'' and, in the same manner as Regulation A
applies to depository institutions, to branches and agencies of foreign
banks. The SBA has adopted size standards for determining whether a
particular entity is a ``small entity'' for purposes of the RFA. The
Board believes that the most appropriate SBA size standard to apply in
determining whether a depository institution or branch or agency of a
foreign bank is a small entity is the SBA size standard for
``commercial banking.'' Under this standard, an entity engaged in
commercial banking is considered a small entity if it has total assets
of $850 million or less.\21\
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\21\ See 13 CFR 121.201.
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Under the proposed amendments to Regulation A, a Reserve Bank would
not be permitted to extend discount window credit to Payment Account
holders, a population that could potentially include all institutions
that are (1) legally eligible for access to the discount window; and
(2) do not have a master account or settle transactions in a
correspondent's master account.\22\ The Board estimates that, as of the
end of 2025, there are approximately 7,000 small entities, of which
6,800 already have a master account or access to financial services.
Accordingly, the Board estimates that there are approximately 200 small
entities that the proposed amendments to Regulation A might affect,
were these small entities to decide to request Payment Accounts.
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\22\ The Board has estimated the number of small entities that
are legally eligible for the discount window on the basis of
institution type. Small entities that currently have master accounts
or settle transactions in a correspondent's master account are
already subject to the Account Access Guidelines. The Board assumes
that these small entities would not request a Payment Account.
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4. Description of Compliance Requirements
The proposed amendments would not impose reporting, recordkeeping,
or other compliance requirements.
5. Duplicative, Overlapping, and Conflicting Rules
The Board is not aware of any federal rules that may duplicate,
overlap with, or conflict with the proposal.
6. Significant Alternatives Considered
As discussed in Section IV.A above, the Board considered not
proposing revisions to Regulation A. The Board does not believe that
this alternative would have affected the economic impact on small
entities because, as noted above, the Payment Account would be a new,
optional way for institutions to request access to accounts and
services, and the proposed amendments would not impose mandatory
requirements on any small entities.
Therefore, the Board believes that the proposed revisions will not
have a significant economic impact on substantial number of small
entities supervised by the Board.
The Board welcomes comment on all aspects of its analysis. In
particular, the Board requests that commenters describe the nature of
any impact on small entities and provide empirical data to illustrate
and support the extent of the impact.
[[Page 30503]]
B. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposed
rule under the authority delegated to the Board by the Office of
Management and Budget (OMB). The proposed rule contains no requirements
subject to the PRA.
C. Plain Language
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113
Stat. 1338, 1471, 12 U.S.C. 4809) requires the federal banking agencies
to use plain language in all proposed and final rules published after
January 1, 2000. The Board has sought to present the proposal in a
simple and straightforward manner and invites comment on the use of
plain language and whether any part of the proposal could be more
clearly stated.
D. Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 (5
U.S.C. 553(b)(4)) requires that an NPR include the internet address of
a summary of not more than 100 words in length of the proposed rule, in
plain language, that shall be posted on the internet website under
section 206(d) of the E-Government Act of 2002 (44 U.S.C. 3501 note).
In summary, the Board proposes to amend its Regulation A
(Extensions of Credit by Federal Reserve Banks) to specify that a
holder of a proposed special-purpose payment account would not be
eligible for access to discount window credit made available by the
Federal Reserve Banks (Reserve Banks). The proposal would change
neither the existing programs under which the Reserve Banks generally
provide discount window credit (primary credit, secondary credit, and
seasonal credit) nor the process for establishing the primary credit,
secondary credit, and seasonal credit rates.
The proposal and such a summary can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a> and <a href="https://www.federalreserve.gov/supervisionreg/reglisting.htm">https://www.federalreserve.gov/supervisionreg/reglisting.htm</a>.
List of Subjects in 12 CFR Part 201
Banks, Banking, Federal Reserve System, Reporting and recordkeeping
requirements.
Authority and Issuance
For the reasons set forth in the preamble, the Board proposes to
amend Regulation A, 12 CFR part 201, as follows:
PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION
A)
0
1. The authority citation for part 201 continues to read as follows:
Authority: 12 U.S.C. 248(i)-(j), 343 et seq., 347a, 347b, 347c,
348 et seq., 357, 374, 374a, and 461.
0
2. In Sec. 201.2, redesignate paragraphs (d) through (f) as paragraphs
(e) through (g) and add new paragraph (d) to read as follows:
Sec. 201.2 Definitions.
* * * * *
(d) Payment account means the record maintained by a Federal
Reserve Bank of the debtor-creditor relationship between the Federal
Reserve Bank and a single depository institution with respect to
deposit balances of the depository institution that are maintained with
the Federal Reserve Bank and which is governed by an agreement that
states the account is a payment account.
* * * * *
0
3. Amend Sec. 201.3 by revising paragraph (a)(1) and adding paragraph
(a)(4) as follows:
Sec. 201.3 Extensions of credit generally.
(a) Advances to and discounts for a depository institution.
(1) A Federal Reserve Bank may lend to a depository institution,
except as described in paragraph (a)(4), either by making an advance
secured by acceptable collateral under Sec. 201.4 of this part or by
discounting certain types of paper. A Federal Reserve Bank generally
extends credit by making an advance.
(2) * * *
(3) * * *
(4) A Federal Reserve Bank may not lend under Sec. 201.4(a), (b),
or (c) to a depository institution that holds a payment account.
By order of the Board of Governors of the Federal Reserve
System.
Benjamin W. McDonough,
Secretary of the Board.
[FR Doc. 2026-10376 Filed 5-22-26; 8:45 am]
BILLING CODE 6210-01-P
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