Public Comment Requested on Payment System Risk Policy
The Federal Reserve Board on Wednesday requested public comment on proposed changes to part II of the Federal Reserve Policy on Payment System Risk (PSR policy) that are designed to enhance the efficiency of the payment system. The proposed changes are largely related to the posting rules for automated clearing house (ACH) and commercial check transactions.
Technology and processing improvements have enabled payment systems and depository institutions to achieve significant efficiencies since the Board first established posting rules to measure depository institutions' intraday Federal Reserve account balances. The proposed changes to the PSR policy posting rules are intended to align them with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement.
Specifically, the Board proposes to move the posting of ACH debit transactions processed by the Federal Reserve Banks' FedACH service overnight to 8:30 a.m. Eastern Time (ET) from 11:00 a.m. ET to align with the posting of ACH credit transactions. The Board is also proposing a set of principles for establishing future posting rules for the Reserve Banks' same-day ACH service.
For commercial check transactions, the Board proposes to move the posting time for receiving most credits for deposits and debits for presentments to 8:30 a.m. ET, and to establish two other posting times at 1:00 p.m. ET and 5:30 p.m. ET. The current posting times were designed for a paper-processing environment and do not begin crediting or debiting for check transactions deposited and presented until 11:00 a.m. ET.
The Board also is proposing companion amendments to Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire) to permit the Reserve Banks to obtain settlement from paying banks by as early as 8:30 a.m. ET for checks that the Reserve Banks present and to permit the Reserve Banks to require paying banks that receive presentment of checks from the Reserve Banks to make the proceeds of settlement for those checks available to the Reserve Banks as soon as 30 minutes after receipt of the checks.
Comments must be submitted within 60 days from the date of publication in the Federal Register, which is expected shortly.
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