A Federal Reserve Bank of St. Louis official told state lawmakers meeting here Monday that all companies offering stored-value cards should be subject to bank regulation.
"All firms which offer liabilities used by the public for making payments should be required to obtain bank charters," said R. Alton Gilbert, a St. Louis Fed vice president. "They would be supervised and regulated as banks, and have access to the discount window to help them deal with occasional liquidity problems."
For the Fed to provide liquidity for nonbanks, Mr. Gilbert said, it must be able to gauge their financial health. Addressing the National Association of State Legislatures annual meeting, Mr. Gilbert said he was speaking for himself and not the Fed.
Mr. Gilbert is one of the first regulators to say that only banks should issue stored-value cards. Top officials at the Federal Reserve Board and at the Office of the Comptroller of the Currency have said it is too early to impose regulations on the stored-value card industry.