CBA, ABA Push Fed to Strengthen Safeguards in Proposed Payment Accounts Framework

The Consumer Bankers Association (CBA) and American Bankers Association (ABA) have jointly submitted a comment letter to the Federal Reserve in support of its proposed Payment Account framework. The associations emphasized that while they welcome responsible innovation, any framework must include strong risk management requirements, direct federal oversight, and transparent application standards.

The CBA and ABA urged the Federal Reserve to maintain key safeguards included in the proposal, such as prohibitions on interest payments and FedACH access. They also suggested conditionally granting access based on demonstrated capabilities in governance, independent risk management, and BSA/AML/CFT compliance.

The associations stressed that legal eligibility alone should not guarantee access to a Payment Account and emphasized that applicants' risk profiles, governance structures, and supervisory oversight must be evaluated. They also proposed adopting a conservative, phased implementation approach to increase activity only after institutions demonstrate sustained compliance and effective controls.