Community Banks Push Back Against Federal Reserve's Proposed Payment Account Framework

Community banks have expressed concerns about the Federal Reserve's proposed 'skinny' payment account framework, which they argue could give nonbank firms an unfair competitive advantage. The proposal would grant approved firms access to certain Fed services, but not others.

The banks argue that this could divert deposits and payment activity away from them, eroding their ability to support local economies.

Jenn Bertematti, managing director of bank operations at INTRUST Bank, wrote that banks are required to devote significant resources to risk management, compliance, consumer protection, and fraud prevention.

The proposal does not provide access to the automated clearing house network (ACH), which processes electronic debits and credits. Fintech companies have urged the Fed to expand the framework by allowing payment account holders to access ACH.