Regulatory changes

Fed seeks comment on proposed changes to payment system

126px-US-FederalReserveSystem-Seal.svg_3The Federal Reserve said last week that it is seeking public comment on proposed changes to the payment system risk policy that are designed to improve the efficiency of the payment system.

The proposed amendments apply largely to posting rules for automated clearing house and commercial check transactions. Since the central bank first established posting rules, a number of technological improvements have helped improve the efficiency of the payment system, and the proposed changes are intended to align posting rules with current operations and processing times.

The Fed board proposed to move the posting of ACH debit transactions processed by the central bank’s FedACH service to 8:30 a.m. (ET) from 11 a.m. (ET) to align with the posting of ACH credit transactions.

For commercial check transaction, the board proposed to move the posting time for deposit credits and debits for presentments to 8:30 a.m. (ET) and to establish two other posting times at 1 p.m. (ET) and 5:30 p.m. (ET). Current posting times were designed for paper processing and do not begin crediting or debiting until 11 a.m.

Additionally, the board proposed companion amendments to Regulation J to allow regional central banks to obtain settlement from paying banks as early as 8:30 a.m. (ET) for checks presented by reserve banks,  and to allow reserve banks to require paying banks that receive checks to make proceeds of settlement available as soon as 30 minutes after receipt.

Comments are due within 60 days from the date of publication in the Federal Register.

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