The Wyoming Bankers Association (WBA) recently defended its position on banking safety standards following criticism at a legislative committee meeting, where some argued the association was not sufficiently “riding for the brand” of Wyoming, The Cheyenne Post reports.
The WBA strongly countered this assertion, emphasizing its dedication to the interests of Wyoming’s communities, banks, and customers.
The dispute arose after the WBA filed an amicus brief with the US Tenth Circuit Court of Appeals in a case involving Wyoming’s Special Purpose Depository Institutions (SPDIs) and the Federal Reserve Bank of Kansas City. The case involves an SPDI seeking a federal master account, which would grant it access to the Federal Reserve’s financial payment systems. The Wyoming Division of Banking had approved a state charter for the SPDI, prompting it to claim entitlement to a master account. However, Federal District Court Judge Skavdahl ruled that the Federal Reserve has the discretion to deny such accounts.
Critics argue that the WBA’s stance conflicts with Wyoming’s support for SPDIs, which represent an innovative financial model within the state. However, the WBA maintains that federal master accounts, which ensure access to the Federal Reserve’s payment system, should be contingent on the same federal standards for safety and soundness that apply to traditional banks.
“Federal oversight is essential to protect the US financial system from risks that could arise if states lower standards to attract business,” the WBA stated.
The associated aligned with Judge Skavdahl’s concerns over a “race to the bottom” in banking regulations.
During a recent Select Committee on Blockchain and Digital Innovation meeting, WBA representatives clarified that the association’s support for federal discretion over master accounts is rooted in safeguarding the national financial system. The WBA stressed that, while Wyoming law enables SPDIs to operate under state guidelines, federal privileges such as master accounts must meet additional criteria established by the Federal Reserve to ensure industry stability.
Responding to allegations that national banking associations like the Independent Community Bankers of America (ICBA) and the American Bankers Association (ABA) pressured the WBA to file the amicus brief, WBA President Scott Meier refuted the claim. Meier stated that the WBA Board decided to advocate for the safety of Wyoming’s banking ecosystem independent of other associations’ input.
