Respondent or Correspondent

Correspondent

A correspondent is an institution that has authorized a Reserve Bank to make debit and credit entries to its master account on behalf of one or more other institutions (i.e., respondents). This term also refers to an institution that maintains a reserve balance in its master account on behalf of one or more respondents.

Respondent

A respondent is an institution that settles some or all of its non-Fedwire® Services transactions in another institution's master account. The term includes nonmember institutions that maintain required reserve balances through a correspondent; this is commonly referred to as a pass-through relationship.

Pass-through Reserves

A nonmember depository institution, a U.S. branch or agency of a foreign bank, or an Edge or Agreement corporation required to maintain reserve balances may choose either to maintain its required reserve balance directly with its Federal Reserve Bank (as described above) or to pass its required reserve balance through a correspondent's account. The U.S. branches and agencies of a foreign bank and the offices of an Edge or Agreement corporation can, in this manner, simulate a single master account by passing required reserve balances through a single correspondent.

A correspondent holds pass-through balances in a single, commingled master account, along with the correspondent's own reserve and clearing balances (if any) at the Reserve Bank in the District where the correspondent is located, unless otherwise permitted by that Reserve Bank. Eligible correspondents are Federal Home Loan Banks, the National Credit Union Administration Central Liquidity Facility, and depository institutions, U.S. branches and agencies of foreign banks, and Edge and Agreement corporations that maintain required reserve balances at a Federal Reserve Bank. The Board of Governors of the Federal reserve System reserves the right to permit other institutions, on a case-by-case basis, to serve as pass-through correspondents.

If you are a correspondent and have an account with the Federal Reserve Banks, you will need to complete the forms noted on the I have a Master account page. If you are the respondent, you will need to complete the following forms in Step 7 - Complete Forms/Agreements:

  • Form 1 - Statement of Items Through Your Correspondent
  • Form 2 - Statement of Service Charges
  • Form 3 - Electronic Notification of Selected Transactions
  • Form 4a - Cash Management Basic Services

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