Custodia Bank Petitions Supreme Court on Fed Access
The bank seeks a master account, potentially changing how regional Fed banks handle applications from nonmember institutions.
Updated on Oct. 29, 2026 in Banking
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Custodia Bank has asked the Supreme Court to intervene in its ongoing legal battle to obtain a Federal Reserve master account. The dispute centers on whether regional Federal Reserve Banks have the discretion to deny account applications from eligible nonmember depository institutions.
Why it matters
This case could clarify the boundaries of Federal Reserve regulatory authority and determine whether all eligible nonmember banks are entitled to direct access to central bank services. A ruling could set a significant precedent for how specialized financial institutions gain access to the core payment infrastructure of the United States banking system.
The case, numbered No. 26-62, centers on whether 12 U.S.C. §342 grants regional Reserve Banks discretion or if 12 U.S.C. §248a mandates service availability. It remains unknown if the high court will accept the appeal or uphold the Tenth Circuit's decision.
The players
Custodia Bank
A Wyoming-chartered nonmember bank seeking direct access to Federal Reserve master account services.
Federal Reserve
The central banking system of the United States that manages the nation's payment infrastructure and oversees banking regulations.
Federal Reserve Bank of Kansas City
The regional Federal Reserve entity that denied the master account application submitted by Custodia Bank.
The details
Custodia Bank argues that the Monetary Control Act requires the Federal Reserve to provide services to all eligible nonmember depository institutions. Conversely, the Federal Reserve maintains that federal law provides regional banks with the discretion to deny applications for master accounts. The case reached this stage after lower courts, including a Wyoming federal district court and a Tenth Circuit panel, ruled in favor of the Federal Reserve.
Timeline
April 1, 2024: The Wyoming district court granted summary judgment to the Federal Reserve.
November 3, 2025: A Tenth Circuit panel affirmed the lower court's ruling.
July 2026: Custodia Bank filed a petition for a writ of certiorari.
October 2026: Custodia Bank filed a reply brief with the Supreme Court.
October 22, 2026: The Federal Reserve requested that the Supreme Court deny the petition.
Money Landscape
The dispute centers on how the Federal Reserve interprets its obligations under the Monetary Control Act of 1980 regarding institutional access. This case marks a high-stakes test of the central bank's discretionary power in a modern financial environment.
This case may ultimately influence the breadth of services available to various depository institutions, which could affect the range of banking options for households in the future. Decisions regarding central bank access remain a complex legal issue to monitor with a professional familiar with banking regulation.
The takeaway
The Supreme Court's decision on whether to hear this case will signal its position on the regulatory power held by regional Reserve Banks. Readers should watch for a formal notice from the high court regarding the certiorari petition to see if the legal challenge proceeds further.
Further reading
For more on how banks navigate the national payment system, visit Banking.
Source note: This article includes information reported by Vitallaw.
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