ICBA Applauds Circuit Court Ruling Upholding Fed Discretion Over Master Account Access

Washington, D.C. (Oct. 31, 2025) — The Independent Community Bankers of America® (ICBA) today applauded the decision of the United States Court of Appeals for the 10th Circuit affirming the Federal Reserve’s authority to deny Custodia Bank’s application for a master account.

“Today’s 2-1 ruling preserves the Federal Reserve’s role in protecting the integrity and stability of the U.S. financial system by clarifying the Federal Reserve Banks have discretion to deny master accounts to entities that they determine pose undue risks to the Fed’s payment systems and services,” ICBA President and CEO Romero Rainey said.

“Community banks operate under a robust framework of federal oversight, capital standards and deposit insurance—all designed to protect consumers and maintain trust. Extending the privileges of master account access to entities that are not subject to the same regulation as community banks would have undermined that stability. Today’s ruling ensures our nation’s payment systems remains safe, sound and resilient.”

In its opinion, the 10th Circuit majority concluded that “the plain language of the relevant statues grants Federal Reserve Banks discretion to reject master account requests from eligible entities,” rejecting Custodia Bank’s argument that the Federal Reserve is required to approve all such applications.

ICBA has long advocated for limiting access to the Federal Reserve’s master accounts and in an amicus brief filed in the case, warned that granting direct access to novel financial institutions not subject to federal prudential oversight would introduce unnecessary risks and volatility into the broader banking system.

ICBA will continue to work with regulators, Congress, and the courts to ensure that innovation in financial services does not come at the expense of safety, soundness, or fair competition.

About ICBA

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.