Our Position

Payments Access, Choice, and Governance

Position

  • ICBA is a strong advocate for secure, financial institution-centric payments systems, and urges policymakers and regulators to maintain their position that direct access to these systems be limited to federally insured financial institutions.

  • ICBA strongly urges policymakers to ensure a competitive level playing field for the financial services ecosystem.

  • ICBA supports both public and private sector payments settlement networks that facilitate competition and that permit financial institutions to select the provider(s) of their choice.

  • ICBA supports the industry rules and the payment market infrastructure (PMI) providers that play a role in developing and maintaining payments systems’ access and functionalities. ICBA urges these organizations to ensure that their governance processes enable and foster community bank participation and support transparent, timely, and inclusive rulemaking.

  • ICBA encourages standardization efforts in the industry, such as the migration to application programming interfaces (APIs) for customer-permissioned data sharing, that reflect the broad breadth of capabilities and resources of varying financial institutions.

  • ICBA advocates for comprehensive and consolidated supervision of novel firms entering the financial services landscape and encourages cross-agency collaboration to harmonize and provide more clarity to regulatory frameworks that apply to digital assets.

Background

Access. Community bank payments systems access must not be limited through the imposition of anti-competitive and discriminatory pricing or policies, membership requirements, operating rules, or technological barriers. Market power and the shifting digital economy should not be used to force changes that would materially or adversely impact the competitive nature of our nation’s payments system.

Choice and Competition. No traditional payments system, including checks, ACH, funds transfers, or payments cards, has ever achieved nationwide reach through a single PMI provider. Competition ensures ubiquitous equitable access, provides options for community banks, and fosters systemic resiliency for the settlement of payments.

Rulemaking. Given that industry rules govern the ACH, payment card networks, check clearing houses and the next generation of payments, it is vital for community banks to participate in the rulemaking, operations, and governance of these organization. The rulemaking process should be transparent and ensure that community banks have opportunities to review proposed rules and provide comments. Rules should be refined to address new services, technologies, regulatory requirements, and marketplace dynamics.

Industry Standards. Community banks are highly dependent on their core banking platforms and other solution providers for technology and other digital tools. Standards implementation by different market participants should reflect industry progression, and not leave community banks at a disadvantage from any asymmetry of capabilities and resources.

Nonbank Access. A secure and well-regulated payments system is essential to all financial institutions and the customers and communities they serve. All traditional U.S. payments systems have restricted direct access exclusively to federally insured financial institutions. New technology has enabled the rapid proliferation of non-bank financial technology (“fintech”) companies that are providing a full suite of banking services but sit outside the regulatory perimeter. These differences create an unfair advantage for fintechs, while adding risk to the financial system as these providers are not subject to the same safety and soundness, regulatory oversight, and supervisory requirements as banks.

Novel Business Models. The fragmented supervision of crypto firms poses significant risks to consumers, businesses, the financial system, and the broader economy. Additionally, a growing concern is the complex and opaque nature of decentralized finance (DeFi), which uses smart contracts and digital currencies to provide a variety of financial services without intermediaries and clear oversight from regulators.

Staff Contact: Deborah Matthews Phillips and Rhonda Thomas-Whitley

Staff Contacts

Rhonda Thomas-Whitley

Vice President, Regulatory Counsel

ICBA

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