Authorized Settlement Agent

DEFINITION of 'Authorized Settlement Agent'

A bank that is authorized to submit checks and other cash items to the Federal Reserve for collection. The 12 reserve banks collect and pay checks for depository institutions; payments are also made through the automated clearing house (ACH) network and private clearing arrangements.

BREAKING DOWN 'Authorized Settlement Agent'

The Federal Reserve plays a primary role in the in the U.S. payments system. Federal Reserve payment services are available to all depository institutions, including smaller institutions in remote locations that other providers might choose not to serve.

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RELATED FAQS
  1. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  2. Who determines the reserve ratio?

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  3. Why would the Federal Reserve change the reserve ratio?

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  4. Which nations' economies have reserve ratios?

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  5. What happens if the Federal Reserve lowers the reserve ratio?

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    A currency reserve is a currency that is held in large amounts by governments and other institutions as part of their foreign ... Read Answer >>
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