Community banks need data to ensure successful FedNow launch in 2023
Washington, D.C. (Dec. 13, 2021) — The Independent Community Bankers of America (ICBA) asked the Federal Reserve to accelerate the flow of information about the FedNow instant payments service to ensure community banks have the data they need to maximize participation ahead of the 2023 launch.
“2022 will be a pivotal year as the community banking industry prepares for the launch of FedNow, which ICBA has staunchly supported,” ICBA President Rebeca Romero Rainey said today. “To ensure community banks are well-positioned to deploy the FedNow service and remain at the payments forefront, ICBA urges the Fed to accelerate the flow of FedNow information, implement a fair and equitable pricing model, prioritize service enhancements, and continue allowing only fully chartered and regulated institutions to access the service.”
Among its FedNow recommendations in a letter to the Federal Reserve Bank of Boston, ICBA called for more information on the 2023 launch date, regular updates on core processor and technology partner readiness, details about onboarding and testing, and additional research on community bank and customer opportunities.
In its letter to the Boston Fed, ICBA also recommended:
- A fair and equitable pricing model. The Federal Reserve should implement creative approaches to pricing plans for existing and new payments services so community banks continue to “lead from the front” and flourish.
- Prioritizing high-demand future service enhancements. While ICBA supports the Fed’s phased implementation of FedNow to maximize speed to market, additional communications on future FedNow milestones will encourage swift adoption, foster innovation, mitigate risk, and bolster transaction security.
- Continuing restricted FedNow access to fully chartered and regulated financial institutions. This policy—which is consistent with Fed processes for other payments systems—ensures that payments are secure while avoiding systemic risks from unregulated institutions.
More information on ICBA’s efforts on FedNow and faster payments is available on the ICBA website.
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 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.