The Federal Reserve said Thursday that its FedLine Advantage online access system had returned to normal operation after glitches earlier in the week snarled automated clearing house access for hundreds of financial companies.
Dan Wassmann, a spokesman for the Federal Reserve Bank of Chicago, said the problem had been solved, but would not say what had caused it.
Several hundred banks had Internet access problems on Monday with the FedLine Advantage system, a virtual private network that serves more than 6,000 small and midsize banks, said David W. Skidmore, a spokesman for the Fed. The problem persisted Tuesday, though for fewer than 100 institutions. The glitch led to processing delays that in some cases lasted several hours, Mr. Skidmore said. All payments ultimately went through.
The problems centered on gaining access to the system, such as failed logon attempts, sessions that timed out too quickly, or stalled system responses, Mr. Skidmore said. There were no problems with the FedACH payments network.
The Fed has shifted thousands of companies to FedLine Advantage, introduced in November 2004, as it phased out an older, dial-up access system that had been in use since the 1980s. Mr. Wassmann would not discuss whether increased volume on the Internet system could have contributed to the access problem.
Colin Kerr, an analyst at the market research firm TowerGroup in Needham, Mass., a unit of MasterCard International, said that Internet transaction systems have extensive security infrastructures — from firewalls and intrusion detection systems to data encryption functions. “It takes a lot of synchronization to make everything work reliably,” Mr. Kerr said.
ACH is a batch-processing system that provides next-day credit to payees, he said. “It may not be as critical as an outage in a wire transfer system,” which can provide same-day settlement, Mr. Kerr said. Even so, he said, “It is essential to have virtual 100% reliability in these payment systems.”
Michael Herd, a spokesman for the electronic payments association Nacha of Herndon, Va., said that the Fed and The Clearing House Payments Co. LLC of New York, which operates the only other U.S. ACH network, usually have nearly 100% system availability, and when problems do arise, “there are a number of backup procedures to serve customers.”
