By Rebeca Romero Rainey
Community bankers, we did it! After years of ICBA-led advocacy on behalf of a real-time payments system that ensures access and choice for community banks, the Federal Reserve has announced that it will build a real-time gross settlement service.
This landmark announcement will ensure universal access to real-time payments, avoid a megabank monopoly and enable competition, and encourage innovation that will benefit consumers and businesses nationwide. And community bankers can take pride in knowing we left nothing on the field during this fierce policy debate.
As ICBA’s new timeline on the debate over faster payments shows, we have been engaged for years on this issue and have actively shaped the real-time initiative. But the rubber really hit the road in recent weeks as the Fed’s internal debate over whether to get involved came to a head. ICBA and community bankers responded in force.
In thousands of messages and phone calls to the Fed and Congress, shoe-leather meetings on Capitol Hill, op-eds and blog posts, and an ad campaign in Beltway publications, ICBA and community bankers applied immense pressure on policymakers and had a direct impact on the Fed’s decision. This followed hundreds of comment letters from community bankers that Fed officials have cited in justifying the move.
As we have said all along, the Fed is uniquely positioned to provide equitable access to real-time payments. A Fed-operated real-time settlement system will ensure industry-wide access, is consistent with the roles it already serves in providing payments services to nearly 11,000 financial institutions, will avoid the risk of having one for-profit settlement service run by the nation’s largest banks, and will encourage further innovations.
Thank you, community bankers, for all of your efforts. The next round of hard work now begins as the Fed begins establishing the service—and we keep up the pressure to ensure swift implementation. But today we can celebrate victory at this stage of the debate, knowing that we have worked diligently for years on this issue while responding to rapidly evolving developments in real time.
Rebeca Romero Rainey is ICBA president and CEO.