Sec. 104. Public member bank services

1,035 words·~5 min read·/bill/116/hr/8721/ih/section-104

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The Board of Governors shall offer the services described in subsection

(b)to public member banks in order to— promote the safety, soundness, viability, and resiliency of publicly owned and operated financial institutions; facilitate the provision of payments, credit, and other financial services as a public good; and support the financial and budgetary health of State and Tribal governments, local government units, government agencies, State or tribally chartered corporations, nonprofit entities designated by a State or Tribal government to be acting in the public interest of a community within such State or Tribe, or an association of one or more of such entities. The Board of Governors shall offer the following services to public member banks: Fiscal agent accounts— in which public member banks may invest funds held on behalf of any entity described in section 101(b)(1); and under which— the Board of Governors shall pay interest on all balances held overnight in such fiscal agent accounts at a rate that is greater than or equal to the greater of— the sum of the overnight policy target rate plus two percent; or the daily rate on 30-year marketable Treasury bonds; and the interest described in clause

(i)(minus a reasonable administrative fee imposed by the public member bank) shall be paid to the entity for which the public member bank invested such funds. Payment accounts— in which public member banks may invest funds held on behalf of any entity other than an entity described in section 101(b)(1) for purposes of providing money transmitter services; and under which the Board of Governors shall pay interest (minus a reasonable administrative fee) on all balances held overnight in such fiscal agent accounts at a rate that is greater than or equal to the greater of the following: The overnight rate paid on required reserves. The overnight night paid on excess reserves. Digital dollar services in which public member banks may operate as pass-through intermediaries for any digital dollar or other financial services offered by the Federal Government, including— digital dollar account wallets administered by the Board of Governors (commonly known as FedAccounts ); digital dollar cash wallets administered by the Secretary (commonly known as eCash ); and postal banking services provided by the United States Postal Service. The Board of Governors may issue regulations as necessary to ensure effective harmonization and coordination between covered banks and any entities responsible for administering digital dollar services on behalf of the Federal Government. A facility (to be known as the Public Bank Primary Liquidity Facility ) to provide liquidity to public member banks by buying or lending (at a reasonable rate of interest that is not greater than the overnight policy target rate) against federally recognized public loans (as described in section 105) and federally-recognized public securities (as described in section 201(b)), under terms and conditions that the Board of Governors determines to be necessary and appropriate to promote public welfare. The facility under subparagraph

(A)shall purchase or accept loans or securities under such subparagraph at face value. A facility (to be known as the Public Bank Supplementary Liquidity Facility ) to provide liquidity to public member banks by buying or lending (at a reasonable rate of interest that is not greater than the overnight policy target rate) against assets not otherwise eligible to be purchased or accepted as collateral under paragraph (4). The facility under subparagraph

(A)may purchase or accept assets as collateral under such subparagraph at a reasonable discount. A facility (to be known as the Public Bank Credit Facility ) to provide credit to public member banks on an unsecured basis, in such amounts and such rates of interests as the Board of Governors determines to be necessary and appropriate to promote public welfare. A facility (to be known as the Federally Recognized Public Loan Facility ) to, in consultation with the Corporation— develop rules, standards, and criteria for Federal recognition of loans, mortgages, credit cards, account overdrafts, and other direct lending products issued by public member banks; and provide prepurchase agreements under which the facility will purchase loans and agree that such loans will be repurchased by the public member bank at such time as is agreed upon by such facility and member bank. The Board of Governors shall pay all administrative, operating, and maintenance costs associated with the accounts, services, and facilities described in subsection (b). The Board of Governors shall reimburse a public member bank for any expenses reasonably incurred in the process of operating as a pass-through intermediary described in subsection (b)(3). Any expenses incurred by the Board of Governors under paragraphs

(1)through

(3)of subsection

(b)and under subsections

(c)and

(d)shall be recorded— in an account to be known as the Special Public Member Bank Services Account established at the Federal Reserve Bank of New York; and as a deferred asset (as described in section 11.96 of the Financial Accounting Manual for Federal Reserve Banks, as in effect on the date of the enactment of this Act) and maintained separately from the balance sheet of the Federal Reserve Bank of New York and the Federal Reserve System, so as to not reduce or impact the calculation of total income or revenue generated by the Federal Reserve System, or otherwise reduce the total amount of net operating profits to be made available for remittance to the Treasury on an ongoing basis. Any expenses incurred by the Board of Governors under paragraphs

(4)through

(7)of subsection

(b)shall be recorded— in an account to be known as the Special Public Member Bank Liquidity and Credit Account established at the Federal Reserve Bank of New York; and as a deferred asset (as described in section 11.96 of the Financial Accounting Manual for Federal Reserve Banks, as in effect on the date of the enactment of this Act) and maintained separately from the balance sheet of the Federal Reserve Bank of New York and the Federal Reserve System, so as to not reduce or impact the calculation of total income or revenue generated by the Federal Reserve System, or otherwise reduce the total amount of net operating profits to be made available for remittance to the Treasury on an ongoing basis.