The brief underscores the idea that significant executive powers vested in individuals who are not appointed in accordance with the Appointments Clause are fundamentally unconstitutional. This argument is particularly compelling with respect to Custodia because it directly challenges the very structure and legitimacy of the Federal Reserve's decision-making process, bypassing the argument of whether or not granting a Master Account is discretionary.
Shots fired. Has no one tried to disarm the Fed this way before? Maybe it'd work with our recently judicially-active supreme court? The brief the quote summarizes was written by Paul Clement who was one of the petitioners in one of the appeals that overturned the Chevron decision.
I'm not sure Custodia's chances are low overall. Though if you're referring to winning on the specific argument that Clement is making, I may agree with you - that is a much more ambitious argument.
Limiting it to the statutory analysis, however, Custodia's case is pretty good. The District Court really tortured the plain language of the statute to give the Federal Reserve the win here - including ignoring a decision in the 10th Circuit that said the opposite (Fourth Corner -- though that decision is not binding due to the nature of how it was decided).
The Fed is being disingenuous with the FDIC statements. There are at least 400 banks without FDIC insurance, and FDIC insurance is also entirely unnecessary for a fully reserved bank. The FDIC protects against bank runs in a fractional system, and a fully reserved bank cannot be run, by definition.
That's surprising, but maybe there hasn't been reason to challenge the Fed this way before (or reason to believe it'd be effective). Custodia has got to be the most interesting thing going on in Bitcoin that no one is talking about.
A Federal Reserve master account is a record of financial rights and obligations between a financial institution and the Federal Reserve Bank. It is identified by a Primary nine-digit Routing Transit Number (RTN) and is used to settle transactions, manage reserves, and access various financial services provided by the Federal Reserve[2][3].
Good for them, maybe there is a light in the tunnel, hope it ain't the train. With Chevron decision in hindsight, one may actually have some hope. Time will tell.
Shots fired. Has no one tried to disarm the Fed this way before? Maybe it'd work with our recently judicially-active supreme court? The brief the quote summarizes was written by Paul Clement who was one of the petitioners in one of the appeals that overturned the Chevron decision.
I think it's the first time anyone has tried it, and Paul Clement is definitely the guy who can get that done, if anyone.
Chevron was case law.
Federal Reserve Act was a statute. They have no chance of winning. The headline is misleading and too optimistic
I'm not sure Custodia's chances are low overall. Though if you're referring to winning on the specific argument that Clement is making, I may agree with you - that is a much more ambitious argument.
Limiting it to the statutory analysis, however, Custodia's case is pretty good. The District Court really tortured the plain language of the statute to give the Federal Reserve the win here - including ignoring a decision in the 10th Circuit that said the opposite (Fourth Corner -- though that decision is not binding due to the nature of how it was decided).
That's good news regarding the statute
They should marshal their best arguments
In rejecting their application, the Fed cited the lack of FDIC. Why not buy FDIC to improve your odds?
The Fed is being disingenuous with the FDIC statements. There are at least 400 banks without FDIC insurance, and FDIC insurance is also entirely unnecessary for a fully reserved bank. The FDIC protects against bank runs in a fractional system, and a fully reserved bank cannot be run, by definition.
https://www.bankingdive.com/news/fed-master-account-list-fdic-insurance-custodia-bank/653374/
That's surprising, but maybe there hasn't been reason to challenge the Fed this way before (or reason to believe it'd be effective). Custodia has got to be the most interesting thing going on in Bitcoin that no one is talking about.
https://cointelegraph.com/news/custodia-appeal-solicitor-general-regulators-debank-crypto?
Many economists and legal scholars have wondered about the extra constitutional structure of the Federal Reserve
Before 1914 no central bank 🏦 in American
Hate to be a downer but I think this will end in a loss for Custodia. The system can’t handle a fully reserved bank
They will lose because the violation of the administrative procedural act won’t work
Custodia is still a good idea for Wyoming
They can operate without a master account
A master account is a Federal Reserve Bank account held by banks not individuals
But it must be important to their business model or why continually burn cash with this legal fight?
Amicus brief is pro bono
Master account is important for any bank.
A Federal Reserve master account is a record of financial rights and obligations between a financial institution and the Federal Reserve Bank. It is identified by a Primary nine-digit Routing Transit Number (RTN) and is used to settle transactions, manage reserves, and access various financial services provided by the Federal Reserve[2][3].
Sources
[1] Master Account and Services Database - Federal Reserve Board https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-about.htm
[2] Master Account - FRBservices.org https://www.frbservices.org/financial-services/accounting/service-setup/master-account.html
[3] Master Accounts and Services Database -- FAQs https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-faq.htm
[4] [PDF] Federal Reserve: Master Accounts and the Payment System https://crsreports.congress.gov/product/pdf/IN/IN12031
[5] Database: Existing Access - Federal Reserve Board https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm
Good for them, maybe there is a light in the tunnel, hope it ain't the train.
With Chevron decision in hindsight, one may actually have some hope.
Time will tell.
I’m no fan of the federal reserve but it’s not an agency
It’s bigger like a different branch
Why would anyone bank with a fractionally reserved bank again if you could bank with a full reserved bank?
Easier to get credit from fractional reserve banks
https://caselaw.findlaw.com/court/us-dis-crt-d-wyo/116097786.html
The first section contains the decision.
https://www.federalreserve.gov/newsevents/pressreleases/orders20230127a.htm
Custodia does not have federal deposit insurance. That was one reason cited for rejecting application for master account
Custodia is full reserve so they probably don’t need deposit insurance but the Fed doesn’t seem to understand fractional reserve