Fed should develop, operate real-time payments settlement system
Washington, D.C. (Dec. 17, 2018)—The Independent Community Bankers of America (ICBA)® expressed strong support for the development of a real-time payment system and urged the Federal Reserve to develop and operate the system. In a comment letter, ICBA said Fed leadership on faster payments would ensure access to financial institutions of all sizes and the customers they serve.
“ICBA continues to encourage the Federal Reserve to use its connectivity among financial institutions to provide universal access and serve an operational role as it does for other payments services,” ICBA President and CEO Rebeca Romero Rainey said. “By serving an operational role in faster payments, the Fed will provide safety, integrity, continuity and equitable access to all financial institutions, which will lead to greater adoption and support further financial innovation.”
In its comment letter, ICBA strongly urged the Federal Reserve operate a real-time gross settlement service, a suite of liquidity-management tools, and a payments directory switch or hub linking financial institutions to other payments directories. This is consistent with the Fed’s statutory role in serving nearly 11,000 financial institutions for checks, ACH payments, and wire transfers. Providing ubiquity and access for all financial institutions and end-users is a clear public benefit that only the Fed can provide, ICBA said.
Further, ubiquity will not be achieved for consumers and businesses without the Fed linking together the nation’s financial institutions and being able to interoperate with private-sector bank-centric settlement services. Until both objectives are achieved, community banks will operate in an uneven market environment, ICBA said. ICBA urged the Fed to quickly decide on its potential actions on faster payments and to begin developing the system as soon as it has published its decision.
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.