Key Points: Custodia Bank filed a second case against the Federal Reserve on Friday, weeks after the bank was denied a request to open a master account and join the Federal Reserve System.
Custodia sued the Fed for the first time last year. She claimed that the Fed had missed the legal deadline to decide on its master account application.
The lawsuit argues that Custodia’s request cannot be rejected by the Fed, noting that the statute states that Fed services “shall always be available to non-member depository institutions.”
Custodia Bank filed a second case against the Fed, this time claiming that Custodia’s master application for a bank account was rejected by the Federal Reserve. The suit also claimed that Custodia was denied her request to join Federal Reserve System.
“Defendants had a nondiscretionary obligation to grant Custodia a master account application and not discriminate against Custodia in its access to all bank services using that account. Any other outcome would endanger the dual-banking system which has served our nation since its foundation,” the filing stated.
Custodia sued the Fed for the first time last year. She claimed that the Fed had missed the legal deadline to decide on its master account application.
“Defendants attempted to settle the litigation after being faced with discovery requests from the Kansas City Fed and a deadline for the Board, which would have revealed the Board’s control over Kansas City’s Fed’s decision making process, they made a request for an administrative record. In a coordinated move orchestrated by the Board with the White House, and leaked to reporters the day before, the Kansas City Fed reported Custodia’s master account denial immediately after the Board denied Custodia’s membership application.” Friday’s filing claimed.
The lawsuit argues that Custodia’s request cannot be rejected by the Fed, noting that the statute states that Fed services “shall always be available to non-member depository institutions.”
Custodia spokesperson Nathan Miller stated that Custodia Bank had filed an amended complaint against the Federal Reserve Board of Governors of Kansas City Federal Reserve Bank. This amended complaint focuses on the core legal question of whether Congress granted the Fed the discretion to decide master accounts.
The amended lawsuit was filed the same day that Custodia founder Caitlin long tweeted that she had provided evidence of “probable crime” by a crypto company. She also warned regulators about potential bank run risks linked to crypto. We encourage you to do your research before investing.Join us to keep track of news: https://linktr.ee/coincuWebsite: coincu.comAnnieCoincu NewsTags: Custodia BankfedFederal Reserve System