On December 15, a Wyoming-chartered bank petitioned for rehearing en banc in the U.S. Court of Appeals for the 10th Circuit, challenging the court’s earlier decision that upheld the Fed’s discretion to deny master account access to eligible state-chartered banks. The bank filed its petition after a divided panel ruled that regional Fed presidents possess plenary authority to approve or reject master account applications (previously covered by InfoBytes here). The plaintiff argued that this interpretation undermines states’ rights to charter banks and raises constitutional concerns about unreviewable executive power exercised by regional Fed officials.

The petition contended that DIDMCA requires the Fed to provide payment services, including master accounts, to eligible nonmember depository institutions. The plaintiff asserted that the panel’s decision disregarded both the statutory text and decades of regulatory practice, which historically granted master accounts to all legally eligible applicants. The petition also urged the full appellate court to reconsider the case due to its “exceptional importance” and the deep division among the judges.