Federal Reserve Bank of New York Account and Financial Services Handbook (“Handbook”) and Related Documentation
In February 2019, the Federal Reserve Bank of New York (“FRBNY”) announced plans to reassess the standards it applies and the risks associated with deciding whether to provide FRBNY accounts or Federal Reserve financial services to in scope financial institutions. The reassessment addressed questions including (i) where FRBNY identifies concerns because providing FRBNY accounts or Federal Reserve financial services to the institution poses heightened risk or frustrates one or more of the purposes, functions, or policy mandates of the Federal Reserve System, and (ii) how FRBNY will manage the relationship if it decides to provide FRBNY accounts or Federal Reserve financial services to such an institution, including whether controls or other mitigants are sufficient to allay the concerns FRBNY identified.
Following its reassessment, on February 25, 2020, FRBNY released the Federal Reserve Bank of New York Account and Financial Services Handbook (the “Handbook”). The Handbook specifies four key factors, among other things, that FRBNY may consider when deciding whether to provide, in its sole discretion, FRBNY accounts or Federal Reserve financial services to financial institutions within the scope of the Handbook (“Covered Financial Institutions”).
As set forth in Section 1 of the Handbook, Covered Financial Institutions are financial institutions that:
- (a) maintain or apply for an account with FRBNY and (b) are not subject to the supervision of a primary federal supervisor;1 or
- (a) maintain or apply for an account with FRBNY or receive or apply to receive Federal Reserve financial services from FRBNY without maintaining an account with FRBNY and (b) engage in activity that FRBNY determines, in its sole discretion, is unusual when compared to financial institutions with a similar type of charter or license or is otherwise unusual or suspicious. FRBNY will provide a financial institution with written notice if it determines that the financial institution falls within the scope of this clause.
As further detailed in the Handbook, the four key factors require that: (1) the Covered Financial Institution must be the type that FRBNY has legal authority to provide FRBNY accounts or Federal Reserve financial services; (2) the Covered Financial Institution must have an effective Bank Secrecy Act/Anti-Money Laundering and Office of Foreign Asset Control compliance program; (3) the Covered Financial Institution must have an operational risk framework to strengthen operational resiliency against events that may impair activities associated with processes, people, and systems; and (4) the Covered Institution must not pose undue credit risk to FRBNY.
The Handbook also describes the minimum actions Covered Financial Institutions must take and the minimum supporting evidence they must deliver in connection with FRBNY's review of whether to provide Covered Financial Institutions with FRBNY accounts or Federal Reserve financial services. Included below are links to the Handbook and related documentation.
The Handbook is effective February 25, 2020
Questions regarding the Handbook and other documentation listed below may be submitted to the FRBNY Administrative Reserve Bank mailbox: Financial.Services@ny.frb.org
- Federal Reserve Bank of New York Account and Financial Services Handbook (PDF)
- Appendix A to Handbook: Know Your Customer (“KYC”) Questionnaire and associated appendices (PDF) In connection with Handbook Factor 1 Applicable Law, Factor 2 Compliance Risk Management, and Factor 4 Credit Risk Management, Covered Financial Institutions must submit a completed KYC Questionnaire and associated appendices.
- Appendix B to Handbook: Security Requirements Attestation Form (PDF) In connection with Handbook Factor 3 Operational Risk Management, Covered Financial Institutions that access a Federal Reserve financial service using FedLine Advantage®, FedLine Command®, or FedLine Direct® must submit a security requirements attestation using the security requirements attestation form.
- Appendix C to Handbook: Business Plan Guidelines (PDF) In connection with Handbook Factor 4 Credit Risk Management, Covered Financial Institutions must submit a business plan using the FRBNY Business Plan Guidelines.
- Supplemental Terms and Conditions Governing the Provision of Financial Services to High-Risk Customers (“Supplemental Terms”) (PDF) Covered Financial Institutions must sign the Supplemental Terms in order to be eligible to obtain or retain FRBNY accounts or access to Federal Reserve financial services.
- Frequently Asked Questions Regarding the FRBNY Account and Financials Services Handbook (PDF) Includes questions and responses received by the FRBNY related to the Handbook and associated documents. (Posted October 2021)
1For purposes of the Handbook, the primary federal supervisors are the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.