Custodia: Supreme Court Review Sought on Fed Account Access

Custodia Bank filed a certiorari petition with the Supreme Court seeking review of whether regional Federal Reserve Banks can deny eligible state-chartered banks master account access. The Wyoming crypto bank, represented by Davis Polk, argues the Kansas City Fed’s 2023 rejection creates a fundamental shift in state-federal banking authority and raises constitutional questions on Federal Reserve Bank president powers. Lower courts upheld the Fed’s broad discretion under the Monetary Control Act, citing risks tied to Custodia’s crypto-centric model. The move threatens viability for other banks pursuing innovative structures.