FedMSB Files Comment on Fed "Payment Account" RFI--Applauds Innovation, Flags MSB Access Gap

NEW YORK, Dec. 22, 2025 /PRNewswire/ -- The Federal Money Services Business Association (FedMSB) today announced that it has submitted a comprehensive comment package to the Federal Reserve in response to the Fed's Request for Information on a proposed "Payment Account" designed for clearing and settlement purposes.

FedMSB welcomed the Federal Reserve's willingness to explore a purpose-built, payments-only access model—while cautioning that the proposal, as framed, does not address a deeper structural reality of the U.S. payments system: Money Services Businesses (MSBs) remain systematically excluded from direct access to Federal Reserve clearing and settlement rails and must rely on indirect pathways through eligible account holders.

"The Fed deserves credit for recognizing that payments innovation requires new access models," said Van Young, President of FedMSB. "But a narrower door is not the same as broader access. MSBs operate at national scale, move significant payment volumes, and serve millions of consumers—yet the industry remains structurally dependent on indirect settlement arrangements that can be fragile, opaque, and vulnerable to sudden disruption."

A Narrow Door, But an Unresolved Access Gap

In its filing, FedMSB emphasized that while the proposed Payment Account could streamline access for certain legally eligible institutions, it does not change statutory eligibility for Federal Reserve accounts—and therefore leaves MSBs outside the fence of direct Fed connectivity.

That reliance on indirect access, FedMSB argued, has real-world consequences. When banks withdraw or restrict services—a trend commonly described as "de-risking"—MSBs and the communities they serve can face abrupt payment interruptions, liquidity stress, and inconsistent compliance expectations across counterparties.

"Indirect access works—until it doesn't," Young said. "When settlement depends on a shrinking number of intermediaries, operational and liquidity risks can become concentrated very quickly."

From Policy Comment to Practical Blueprint

Beyond policy critique, FedMSB's submission provides a detailed, implementation-ready framework intended to strengthen payment system resilience without altering existing legal eligibility standards.

The comment package includes:

• Agreement-ready safeguards for AML/BSA/CFT, sanctions compliance, cyber risk, and operational resilience;
• An escalation and remediation framework for material control deficiencies; and
• A standardized controls, metrics, and reporting template designed to improve transparency, comparability, and supervisory efficiency across indirect settlement arrangements.

FedMSB stressed that these tools are intended to complement—not replace—the Federal Reserve's supervisory objectives, while reducing bespoke review burdens and improving accountability.

"Our goal is not to weaken safeguards, but to make them clearer, auditable, and consistent," Young said. "If indirect access is going to remain the default for a significant part of the payments ecosystem, then the guardrails around it need to be explicit and durable."

Why It Matters Now

The Federal Reserve's Payment Account RFI comes as instant payments and real-time settlement push clearing and liquidity mechanics into the foreground of financial stability discussions. As payment activity becomes faster and more concentrated, FedMSB warned that unresolved access asymmetries could amplify systemic stress during periods of market or supervisory shock.

"Payments infrastructure is no longer a back-office issue," Young added. "Who can connect, how they connect, and under what conditions now matter for continuity, competition, and confidence in the system."

FedMSB's comment was submitted within the Federal Reserve's public comment window, which closes 45 days after publication in the Federal Register.

About FedMSB

The Federal Money Services Business Association (FedMSB) is a national nonprofit trade association organized under IRC § 501(c)(6). FedMSB represents money services businesses across the United States, serving as both a standard-setter and a strategic convener for the non-bank financial services sector. Through policy engagement, standards development, industry certification, technical guidance, and educational resources, FedMSB supports regulatory modernization, technical innovation, and the integrity of next-generation "MSB 2.0" financial services. For more information, please visit www.FedMSB.org.

Contact:

Ms. Jennifer Wynn

Federal Money Services Business Association

Email: [email protected]

Phone: 212-951-1168

SOURCE Federal Money Services Business Association (FedMSB)