Chair of the House Financial Services Committee Maxine Waters issued a statement yesterday regarding the Federal Reserve’s announcement that it will pursue a faster payments process for consumers. Long discussed with little movement, Federal Reserve Board of Governors Member Lael Brainard revealed the “FedNow” plan in a speech yesterday. Brainard said the goal is to:
“…provide everyone with the ability to send and receive funds securely on a 24x7x365 basis,” noting that banks must embrace real time innovation.
Chair Waters had this to say:
“The Federal Reserve has put off meaningful action on payments system innovations for many years and I am pleased to see that Chairman Powell has finally taken action. Today’s decision towards innovating the payments system will benefit consumers, small businesses, community banks and credit unions, and it will bring the U.S. payments network into the digital era. By creating a system for instant payments, millions of Americans living from paycheck to paycheck can breathe a sigh of relief as they will be able to settle payments securely and with ease. These payment transactions can be the difference between making rent or putting food on the table for many underserved populations and can help families across the country avoid paying hefty fees related to late payments due to their account funds being withheld for several days. I have long called for prudential regulators to take the steps needed to drive financial inclusion and will continue my efforts to ensure the unbanked and underbanked are provided with flexible, secure and affordable means to financial services.”
The House Financial Services Committee has scheduled a hearing on “The Future of Real Time Payments” to take place on September 26th. The Hearing will be chaired by Fintech Task Force lead Representative Stephen Lynch.