The Federal Reserve Board again rejected Custodia Bank's bid to become a member of the central bank system. nikhileshde
"The Board previously concluded that the firm’s application as submitted was inconsistent with the required factors under the law. The Board’s rules permit an applicant to request that the Board reconsider its application decision," Thursday's release said, though it did not share much information beyond that."presented significant safety and soundness risks," and claimed Custodia did not have a sufficient risk management framework in place.
For its part, Custodia has renewed its efforts to force the Fed to grant it access through the courts, filing an amended complaint against the Federal Reserve as part of its ongoing legal fight. Custodia is seeking to both become a member of the Federal Reserve System and undergo Fed supervision and gain access to a Master Account through the Kansas City Fed.
"Custodia’s master account was denied on January 27, 2023, and Custodia has no other method by which it can access Federal Reserve services," the filing noted.
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