PAYMENTS SYSTEMS ACCESS AND GOVERNANCE
- ICBA supports payment systems that are competitive, progressive, and secure and that offer fair and open access to all community banks regardless of size and operational capability so they can meet the existing and evolving global payment needs of their customers.
- ICBA supports industry efforts that encourage greater efficiency and faster payments and that make bank-centric models supported by the public and private sectors more competitive in an evolving and dynamic marketplace.
- Ubiquitous faster payment initiatives should include compensation to the receiving bank for its role in processing the transaction.
- While ICBA strongly supports payments innovation, we believe that regulations that apply to banks in the areas of privacy, security, and consumer protection should apply equally to non-bank providers.
- ICBA encourages the CFPB to use its authority to regulate large market participants to address non-banks serving as payments channels and create consistent transparency and protections for consumers as well as a level playing field for all payments providers.
- ICBA encourages a federal and state regulatory framework for virtual currencies and the virtual wallets, exchange services, and merchant enablers that support these services.
- ICBA welcomes the development of digital and mobile wallets as an important consumer innovation. These products must evolve in a way that protects consumer privacy, accommodates bank-centric payments, and allows all financial institutions an equal opportunity to have their cards and accounts at the top of the wallet.
- ICBA supports the Federal Reserve System in its dual role as payment systems regulator and provider/operator of services.
- ICBA strongly supports the Federal Reserve Banks’ effort to create a ubiquitous, near-real-time payment system and urges them to participate in this new system as an operator and service provider.
- ICBA encourages the Federal Reserve to use vigorously its authority to identify and regulate systemically important payment, clearing and settlement systems.
- ICBA supports the important roles private-sector rulemaking organizations – payment card networks, and check and ACH clearing houses – play in developing and maintaining rules supporting fair, open, and efficient access to payment systems.
- ICBA encourages the Federal Reserve Board and private-sector rulemaking and standards-setting bodies to uniformly enforce rules and timely refine rules to address new services and technologies, and encourages them to collaborate to further establish uniformity and efficiency between their rules.
- ICBA promotes active community banker involvement in payment rulemaking and standards-setting, operations, and governance at the national and regional levels.
Access. Community banks’ payment systems access must not be limited through the imposition of anti-competitive and discriminatory pricing or policies, membership requirements, standards, operating rules or technological barriers. The concentration of market power should not be used to force changes that would materially and adversely impact the competitive nature of our nation’s payments system.
Faster Payments. Community banks need a strong, efficient, bank-centric payments system to effectively serve their customers and communities. ICBA is an active participant in industry efforts toward faster payments and in faster payments initiatives by the Federal Reserve Banks, NACHA and The Clearing House, ensuring coordination between these efforts. Core attributes of any faster payments system should include end-user payment experience, ubiquity, efficiency, inter-bank compensation, and strong oversight by financial institutions.
Non-Bank Providers. The emergence of non-bank payment providers can add risk and threaten the integrity of the payment system. Such providers are not subject to regulatory compliance. They put customers at risk and capture payments-related data and mine it or resell it for other purposes. Emerging technologies should not disrupt or disintermediate the bank-centric payments system. These technologies should be safe and secure, adhere to the same regulations and consumer protections as banks, and enable banks, regardless of size, charter-type or location, to play an active role in the customer relationship. Banks should be compensated for their role in transactions.
Virtual Currencies. Virtual currencies offer consumers a new choice of payment method and are spurring significant investments in payments technology that have the potential to create further new options for consumers and investors in the future. However, current limited regulation and oversight applied to the virtual currency marketplace and transactions in virtual currency mean that consumers and investors that pay with or hold virtual currency are exposed to significant risks. ICBA continues to advocate on behalf of community banks to educate policymakers regarding the risks related to virtual currencies.
Digital and Mobile Wallets. Digital and mobile wallets, such ApplePay, MasterPass, and Samsung Pay, offer consumers a means of consolidating their card and account information. It is imperative that these wallets evolve in a manner that ensures that customer data is protected, login credentials are never shared, non-banks (software companies, retailers, and phone manufacturers) do not have access to customer account information, and bank-centric payments are accommodated. Digital and mobile wallets should be ubiquitous – connecting all consumers to all businesses – through all financial institutions. They should allow for an open competitive environment and not add unrecoverable costs.
Federal Reserve System. The Federal Reserve’s ongoing dual payments role as a regulator and a provider of services allows it to maintain efficient, accessible, reliable, and safe payment systems for all financial services stakeholders. The strategic focus of Federal Reserve’s Financial Services bodes well for all participants as the industry strives to meet the payments needs of consumers and businesses in a dynamic and innovative commerce environment fueled by the emergence of smart-phones, tablets, and other mobile devices. This strategy moves the Federal Reserve’s focus from the interbank payments market to the entire payments supply chain to shape the end-user payments experience. It is essential that, as part of this initiative, the Federal Reserve participates as a payments operator and service provider to all banks, regardless of size and charter.
Private-Sector Governance. Given that private sector rules govern the ACH, payment card networks, and check clearing houses, it is vital for community banks to participate in the rulemaking, operations, and governance of these organizations, particularly at the regional level. At the national level, ICBA actively represents the community bank perspective before NACHA --The Electronic Payments Association as new ACH rules and innovative products are vetted and implemented. ICBA Bancard representatives are active participants in the Visa and MasterCard governing bodies. Additionally, ICBA and community bankers interject the community bank voice in the Electronic Check Clearing House Organization (ECCHO) rulemaking process governing check image exchange and the Accredited Standards Committee X9 mission to develop standards for the financial services industry.
Staff Contact: Cary Whaley