Fed Moves to Require Same-Day Payments

The Federal Reserve Board  is taking public comment on whether to require member banks to move to same-day payments after an industry group voted to mandate faster payments among the nation’s 12,000 financial institutions.

Nacha, which regulates the decades-old ACH payment system, voted May 19 to require member institutions to accept same-day payments, effectively moving the entire financial system toward a faster payment system. The Fed said its proposal would be to incorporate Nacha changes into its payment rules, making its FedACH Same Day service a mandatory service for member banks rather than an optional one.

“The board believes that these changes may have a significant longer-run effect on the nation’s payment system,” the notice said. “Specifically, there would be minimal technological and operational investment required by the Reserve Banks to implement the service, and any operating costs can be recovered through fees charged for using the Reserve Banks’ ACH services.”

The proposal would require receiving depository financial institutions to accept same day ACH from originating depository financial institutions. Fed rules had made same day ACH optional, but the board said that in the years since it has been offered, fewer than 100 institutions opted into the program. A requirement that receiving institutions accept same day payments would offer “clear public benefits” and “enhance the efficiency and integrity of the ACH network and the broader U.S. payment system.” 

The board will take comment on the proposed changes through July 2.