The Federal Money Services Business Association (FedMSB) announced that it has submitted a comprehensive comment package to the Federal Reserve in response to the Fed's Request for Information on a proposed "Payment Account" designed for clearing and settlement purposes.

FedMSB welcomed the Federal Reserve's willingness to explore a purpose-built, payments-only access model—while cautioning that the proposal, as framed, does not address a deeper structural reality of the U.S. payments system: Money Services Businesses (MSBs) remain systematically excluded from direct access to Federal Reserve clearing and settlement rails and must rely on indirect pathways through eligible account holders.

"The Fed deserves credit for recognizing that payments innovation requires new access models," said Van Young, President of FedMSB. "But a narrower door is not the same as broader access. MSBs operate at national scale, move significant payment volumes, and serve millions of consumers—yet the industry remains structurally dependent on indirect settlement arrangements that can be fragile, opaque, and vulnerable to sudden disruption."

In its filing, FedMSB emphasized that while the proposed Payment Account could streamline access for certain legally eligible institutions, it does not change statutory eligibility for Federal Reserve accounts—and therefore leaves MSBs outside the fence of direct Fed connectivity.

That reliance on indirect access, FedMSB argued, has real-world consequences. When banks withdraw or restrict services—a trend commonly described as "de-risking"—MSBs and the communities they serve can face abrupt payment interruptions, liquidity stress, and inconsistent compliance expectations across counterparties.

"Indirect access works—until it doesn't," Young said. "When settlement depends on a shrinking number of intermediaries, operational and liquidity risks can become concentrated very quickly."