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Federal Reserve Standardizes Account and Service Relationships

The Federal Reserve is standardizing the way financial institutions establish account and service relationships. The new procedure is designed to:

• help improve the account-relationship process,
• enhance the Fed’s ability to verify authorized individuals and
• expedite the processing of customer requests.

In addition to the Master Account Agreement, banks will be required to submit several documents, including: “Resolutions Authorizing an Institution to Open and Maintain Accounts and Use Services” and “The Official Authorization List.” These documents will serve as the foundation for establishing each institution’s authority to engage in business with the Fed and for identifying their authorized personnel.

The notifications were mailed to all Eighth District Federal Reserve account holders July 6, and the documents must be returned by Oct. 1. Upon receipt, the new board resolutions will not supersede resolutions authorizing institutions to:

• borrow from and pledge collateral to the Fed,
• engage as a TT&L depository, and
• request certain levels of daylight overdraft capacity and net debit caps on Fed bank accounts.

Moreover, the new official authorization list will not replace any existing service-specific authorizations. After Oct. 1, however, only those individuals whose names appear on the official authorization lists may request changes to these service-specific authorizations. In addition, these new forms must be in place before institutions can begin using FedLine^® Advantage, which will be introduced later this year.

If you have any questions, please contact Norman Broska at 1-800-333-0810, ext. 44-4775, or (314) 444-4775.

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