Custodia Bank has filed an opening brief in the 10th Circuit Court of Appeals. They are challenging a Wyoming judge’s decision that granted the Federal Reserve the power to deny it a master account. Moreover, the brief urges the appeals court to instruct the Wyoming district court to revoke its denial and grant Custodia a master account.
Custodia Bank Files Opening Brief In 10th Circuit
Custodia Bank CEO Caitlin Long has hired two veteran Supreme Court attorneys for the lawsuit against Fed. Their arguments are focused on several key points, including violation of the dual banking system. Custodia Bank’s lawyers argue that the Fed’s authority to deny master accounts to state-chartered banks undermines the dual banking system.
This system allows banks to choose between a state charter or a federal charter. Hence, they referenced the case Cantero v. Bank of America. The 10th circuit brief stated, “The United States maintains a dual system of banking, made up of parallel federal and state banking systems.”
In addition, Custodia’s lawyers also argue that the Fed’s power to discriminate against state-chartered banks may violate the Monetary Control Act (MCA). The MCA ensures fair access for state-chartered banks to the Fed’s services. In addition, they pointed to Congress’s mention of the word “shall” in the MCA, which states that “all Federal Reserve bank services…shall be available to non-member depository institutions.”
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