Board of Governors of the Federal Reserve System

While I remain supportive of the concept of the Federal Reserve developing a payment account prototype that it might provide to legally eligible institutions, I cannot support this set of proposals because it does not provide sufficiently specific and robust safeguards to protect against the accounts being used for money laundering and terrorist financing by institutions we do not supervise.

Although there has been progress on addressing this concern relative to what was outlined in the earlier request for information, the protections remain inadequate. For example, there are no provisions for the Federal Reserve to engage in examination and inspection of anti-money laundering/Bank Secrecy Act (AML/BSA) compliance procedures.

While I dissent on this set of proposals, I will be interested in reviewing public feedback about how such safeguards could be designed and implemented, as well as comments on how to mitigate other risks of the payment accounts.