(Oct. 22, 2021) “FedNow” – the Federal Reserve’s much-anticipated (and delayed) round the clock payment system – will be ready “sooner rather than later,” Federal Reserve Bank President Esther George (the “executive sponsor” of the Fed initiative) told a bankers’ group Tuesday, reiterating that a 2023 debut is on track. Her comments confirmed an announcement by the Fed made in February, also targeting 2023 as the debut for the system. Originally, the Fed had set the system’s debut for as late as 2024 … Likely in response to strong political pressure brought by both the credit union and banking industries, the Treasury this week raised the proposed threshold to $10,000 for reporting of balances at accounts held at credit unions and banks to the IRS. The banking industry immediately rejected the amended proposal (as it had the previous threshold of $600 or more). Under the proposal, meant to find and track account holders who are not paying their taxes, credit unions and banks would have to provide data on accounts with total annual deposits or withdrawals worth more than $10,000, not including payroll and beneficiary deposits … Large technology companies operating U.S. payments systems were ordered this week by the CFPB to provide information on their business practices, which CFPB said would help it better understand how the firms use personal payments data and manage data access to users in order to ensure adequate consumer protection. CFPB said the initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square. CFPB said it will also be studying the payment system practices of Chinese tech giants, including Alipay and WeChat Pay.
LINKS:
Statement by Secretary of the Treasury Janet L. Yellen on Congressional Tax Compliance Proposals
CFPB Orders Tech Giants to Turn Over Information on their Payment System Plans
(June 4, 2021) A “new and comprehensive” set of rules – but with concepts that are like existing regulations – to govern the Federal Reserve’s new round-the-clock instant payments service was proposed this week by the agency.
The new rules apply to the Fed’s upcoming “FedNow” service, expected to be available in 2023. The service, the Fed has said, will support instant payments in the U.S. (using concepts similar to existing provisions) 24 hours a day, seven days a week, 365 days a year.
In a release, the Fed said the rules it is proposing detail legal rights and obligations of Federal Reserve Banks and FedNow participants. Under the proposal, the Fed would amend its Regulation J (which governs funds transfers, particularly by check processing and Fedwire funds, among other things), establishing a new subpart C. That subpart would set up the new rules governing funds transfer using FedNow; the current subpart B (applying to Fedwire Funds Service) of the rule would no longer apply to transfers over FedNow.
Subpart B would be altered to reflect the fact that the reserve banks will be operating a second funds transfer service in addition to the Fedwire Funds Service, the Fed said. Some technical changes to subpart A, governing the check processing service, are also proposed.
The proposal was issued with a 60-day comment period.
(Feb. 5, 2021) New NCUA Board Chairman Harper met with state regulators this week during a regularly scheduled conference call of state regulators. During the hour-long “regulator to regulator” session, the new NCUA leader outlined his priorities for the agency in 2021 and responded to questions from the state supervisors … An advisory warning financial institutions of a proliferation of fraud schemes tied to health care or health insurance services bought and paid for amid the COVID-19 pandemic was issued this week by the Treasury’s Financial Crimes Enforcement Network (FinCEN). The agency said law enforcement and financial institutions have detected numerous instances of potential frauds to health care benefit programs, health insurance, and COVID-19 health care relief funds. The advisory also stated that frauds have also been seen related to COVID-19 relief funds for health care providers, such as those provided under the Paycheck Protection Program (PPP) and Health Care Enhancement Act (HCEA) … The Federal Reserve now says 2023 (rather than 2024) is the launch time for its planned FedNow instant payments system. The agency said the one-year, shortened timeframe is the result of “significant strides” made over the last several months toward program milestones. The Fed said it continues to take a phased approach to launching the service, with the initial launch set for two years from now to include core clearing and settlement functionality and key value-added features, such as a request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions … The Texas Credit Union Department has a job opening for a Director of Examination Support Activities (Director IV); see the State Job Announcements page on the NASCUS website for more information.
LINKS:
FinCEN advisory (FIN-2021-A001)