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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  1. How is the Federal Reserve audited?

    Contrary to conventional wisdom, the Federal Reserve is extensively audited. Politicians on the left and right of a populist ... Read Full Answer >>
  2. Who decides when to print money in the US?

    The U.S. Treasury decides to print money in the United States as it owns and operates printing presses. However, the Federal ... Read Full Answer >>
  3. Why do some people claim the Federal Reserve is unconstitutional?

    The U.S. Constitution does not mention the need for a central bank, nor does it explicitly grant the government the power ... Read Full Answer >>
  4. How can the federal reserve increase aggregate demand?

    The Federal Reserve can increase aggregate demand in indirect ways by lowering interest rates. Aggregate demand is a measure ... Read Full Answer >>
  5. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>
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    The bond market is highly sensitive to changes in the federal funds rate. When the Federal Reserve increases the federal ... Read Full Answer >>

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