The Federal Reserve is seeking public comment on establishing limited "payment accounts" for certain financial institutions.

PANews reported on December 19th that the Federal Reserve announced on Friday that it is seeking public comment on establishing limited "payment accounts" for certain financial institutions. These accounts would allow these institutions to use the Fed's payment services for clearing and settlement, but would not enjoy the broader rights currently enjoyed by banks. Fed Governor Waller stated that such accounts could "support innovation" while protecting the security of the payment system. If such accounts are established, they will be distinct from the Fed's main accounts, will not pay interest, and will not provide Fed credit services. These accounts will also be subject to balance limits. Waller first proposed the idea of such accounts last October, when the Fed was seeking a balance that would allow institutions such as fintech companies to use the Fed's payment services more broadly without granting full main account privileges to less regulated institutions.