Custodia bank's fight against the Federal Reserve for a Master Account

**Bern** · 05-07-2024, 09:55 AM

... This week American Banker Reporter Kyle Campbell interviewed Custodia Bank CEO Caitlin Long. Their topic was her bank's legal tussle with the Federal Reserve Bank over its decision to deny Custodia a master account. ...

No paywall (video and transcript both):
https://www.americanbanker.com/podca...t-with-the-fed

^^ This is the kind of important news event that you won't find mentioned in most financial media, but has massive implications for everyone. I highly recommend spending some time watching or reading that interview. Caitlin Long is doing some heavy lifting for financial liberty.

**acptulsa** · 05-07-2024, 10:29 AM

Originally Posted by Caitlin Long

Remember, they all have, all of the states and chartering territories also have their own banking rules and regulations that all the banks have to adhere to when they're doing business in those states. You have to register to do business in those states, as a corporation. You can't just willy-nilly go in and take deposits in a state. You start with registering with the Secretary of State in every state for example. So that's the point that that ignores, the elephant in the room, which is the states...

And when the Fed just ignores congressional oversight as they did in the case of the master accounts, the only oversight comes from the courts. And we just had a court say, well, the San Francisco Fed is not a federal agency. So the Administrative Procedure Act, the due process that's associated with that, does not apply. And so, literally, in the state of Idaho right now, if that court decision stands, any bank can have its master account yanked by the Federal Reserve Bank of San Francisco with no redress. That's where it stands right now.

So the federal government says the Fed should have precedence over the states because it's federal. But the courts won't curb their federal powers because it isn't a federal agency, and doesn't have the very federal powers the Congress has de facto imbued it with.

Neat loophole, if we let them get away with it.