New York Fed wins appeal over Puerto Rican bank’s payment-system cutoff

The Federal Reserve Bank of New York on May 13, 2026, won a federal appeals court ruling upholding its decision to cut Banco San Juan Internacional’s access to the U.S. central bank payment system over sanctions and anti-money-laundering concerns. The 2nd U.S. Circuit Court of Appeals in Manhattan ruled 3-0 that the Federal Reserve Act does not entitle the Puerto Rican lender to a master account, which allows banks to use the Fed’s electronic payments infrastructure. BSJI sued in 2023 after being told its 11-year-old account would be closed. Circuit Judge Denny Chin wrote that regional Fed banks have discretion to grant or deny master accounts to protect financial stability. The court also rejected BSJI’s claim that it was targeted because its owner is Venezuelan, finding no discriminatory intent. BSJI had argued the cutoff was part of a broader campaign affecting banks tied to Venezuela, cryptocurrency and cannabis.