Custodia appeals to U.S. Supreme Court over Fed master account denial

Custodia Bank has submitted its final reply brief to the U.S. Supreme Court, challenging the Federal Reserve's refusal to grant a master account. The bank argues that the Fed's actions represent a tyranny over financial innovation. This dispute follows a ruling by the 10th U.S. Circuit Court of Appeals, which sided with the Fed, stating that a regional Federal Reserve Bank has the discretion to deny a master account even to legally eligible depository institutions. Custodia contends that the Monetary Control Act of 1980 mandates the Fed to provide payment services to eligible nonmember banks, emphasizing the statute's use of the word 'Shall.' Additionally, Custodia claims that unelected officials have misused their power to deny access to the payments system, undermining state sovereignty over bank charters and the dual banking system. Judge Timothy Tymkovich issued a strong dissent in the appellate case, arguing that the decision grants the Fed unlimited power to refuse access.

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