NEWS on Payments

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Lawmakers Continue Pressing Fed on Faster Payments

Jul 12, 2019
ICBA’s push for Federal Reserve leadership on real-time payments continued bearing fruit during Fed Chairman Jerome Powell’s second straight day of congressional testimony.

Ahead of Powell’s testimony before the Senate Banking Committee, Ranking Member Sherrod Brown (D-Ohio) sent him a letter encouraging the Fed to quickly develop an alternative real-time-payments network. In the letter, which also focuses on Facebook’s planned Libra digital currency, Brown asked whether the Fed has evaluated the potential negative impact of not offering an alternative system for small financial institutions and their customers.

Responding to questions from Sen. Chris Van Hollen (D-Md.) during the hearing, Powell said he is aware that community banks want the Fed to be involved in real-time payments. Quoting ICBA leadership community banker Bob Steen of Bridge Community Bank in Mt. Vernon, Iowa, Van Hollen cautioned that Fed inaction could cement The Clearing House’s private-sector network as the lone real-time-payments alternative.

That exchange followed several questions about Fed involvement during Powell’s appearance Wednesday before the House Financial Services Committee. In a briefing to that panel’s staff members on Tuesday, ICBA's Cary Whaley said only the Fed can ensure ubiquity and equal access to real-time settlement.

ICBA will continue calling on the Fed to have a leadership role in faster payments, as it has in a recent letter to Powell, op-ed, blog post, and comment letter.