Golden Finance reported that Custodia Bank has just filed an opening statement of defense with the Tenth Circuit Court of Appeals, challenging the decision of a Wyoming judge to grant the Federal Reserve unfettered power to deny its master account. Custodia asked the Court of Appeals to instruct the Wyoming District Court to revoke the denial of Cutodia's master account and grant it a master account. Custodia CEO Caitlin Long hired a pair of senior Supreme Court lawyers to defend her company. Here are some of the points they argued: 1. Custodia's lawyers claim that the Federal Reserve's power to deny master accounts to state-chartered banks undermines the dual banking system, which allows banks to freely choose to operate under state or federal charters. 2. They also claim that the Federal Reserve's power to discriminate against state-chartered banks that want to obtain master accounts may violate the Monetary Control Act, which allows state-chartered banks that want to obtain Federal Reserve services to obtain services fairly. 3. They emphasized that Congress used the word "shall" in the Monetary Control Act, which reads All Federal Reserve banking services...shall be provided to nonmember depository institutions, to make clear that Congress intended that all eligible banks have equal access to the Federal Reserve's services.
