In its December 13, 2018 comment letter, CBAI highlighted the importance of the Federal Reserve remaining an essential access point to the payments system for community banks regardless of size, charter type or location so they can meet the existing and evolving payment needs of their customers and communities. Read CBAI’s Comment Letter. A fair and secure payments system is at the very foundation of our financial services industry and economy. The number of payment options and the speed of development within the financial system have increased dramatically and the pace of change is unlikely to abate in the future. The importance of the payments system to community banks cannot be overstated and a system which disadvantages community banks will have a devastating impact on the nations consumers, small businesses and agriculture. CBAI is rightly concerned with payments system improvements which are owned and operated by the nation’s largest banks/financial firms and non-bank fintechs. Only the Federal Reserve is able to provide solutions that will: increase competition; reduce concentration risks; be less likely to disadvantage community banks, and reduce the negative impact of future large bank and financial firm missteps and misdeeds on millions of consumers, small businesses and many thousands of urban and rural communities across the nation. In its comment letter, CBAI specifically recommends that the Federal Reserve:
- Use its connectivity to provide all financial institutions with access to real-time payments;
- Provide central bank settlement (i.e., Real Time Gross Settlement or (RTGS);
- Provide a Liquidity Management Tool (LMT) to support services for real-time interbank settlement for faster payments;
- Serve as an operator for real-time payments as it does for checks, ACH, and wire transfers; and
- Operate as a payments directory that would link to financial and other private sector directories.