Allowing flexibility as FedNow develops will simplify implementation

September 9, 2021

CUNA supports the Federal Reserve Board’s ongoing development of the FedNow service and rule updates needed to operate FedNow, it wrote to the Fed Thursday. The Fed proposed amendments to govern funds transfers through the Federal Reserve Banks’ new FedNow service.

Part of the proposal concerns the Fed asking if it should set a specific definition of the term “immediately” as used in the funds availability requirement.

“Products and services that allow credit unions to use FedNow are under development. Allowing flexibility in the development and initial operation of these products and services will simplify implementation as service providers and credit unions make FedNow services available,” the letter reads. “A too restrictive definition of ‘immediately’ could complicate development of products and services. Defining ‘immediately’ would be best after FedNow matures and financial institutions have experience with the service.”

CUNA also encourages the Fed to implement rules that can used by both FedNow and The Clearing House’s Real Time Payments Network (RTP), which is currently in the marketplace.

“Consistency would help credit unions use both FedNow and RTP and ensure coherent products for consumers,” the letter reads.