Overview
- Circuit Judge David Ebel wrote the majority opinion concluding that the Federal Reserve Act and the Monetary Control Act do not create an automatic entitlement to a master account.
- Judge Timothy Tymkovich dissented, arguing the Monetary Control Act’s “shall be available” language mandates access and warning of Appointments Clause concerns over unappointed Reserve Bank officials wielding decisive power.
- The court rejected Custodia’s claims that the Kansas City Fed improperly coordinated with the Board of Governors or the White House, finding the regional bank made the final decision.
- The Federal Reserve Bank of Kansas City had formally denied Custodia’s application in January 2023, citing deficiencies in risk management and concerns about its crypto-focused business model.
- Custodia said it is considering a petition for rehearing, as policy discussions continue about potential limited “skinny” master accounts that remain subject to Federal Reserve discretion.