A Wyoming court has ruled against Caitlin Long’s Custodia Bank by determining that the lender is not entitled to a Federal Reserve master account.
In a summary judgment on March 29, Judge Scott W. Skavdahl found that Custodia Bank has no statutory entitlement to a master account and will not be granted a writ of mandamus for one.
Custodia had argued that the Federal Reserve Bank of Kansas City (FRBKC) must provide a master account merely because it was eligible to apply for one. Meanwhile, the regulator argued that it has the authority to reject requests at its discretion.
The judge concluded that the plain language of the specific law cited by Custodia supports FRBKC’s position. He noted that the law does not mention master accounts or mandate the Fed to provide them to every eligible depository institution.
Instead, the relevant section of the law is intended to ensure that certain services are available to member and non-member depository institutions — but not every depositor
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