Newsroom

September 10, 2019

NAFCU's Hunt breaks down faster payments proposal in op-ed

NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt published an op-ed in the Credit Union Journal discussing the Federal Reserve's proposal to create the FedNow Service, which would give credit unions the option to participate in a real-time payments system.

"Any depository institution eligible to hold an account at a Reserve Bank could connect to the service, including federally insured credit unions," Hunt said. "FedNow would settle interbank obligations by making debit and credit entries in each financial institution's master Reserve Bank account."

Hunt highlighted many benefits credit unions could see with FedNow, but also addressed potential pitfalls of which to stay vigilant. As credit unions consider the proposal, Hunt noted that the Fed is interested in feedback on pricing, fraud prevention and how to implement a directory service through the FedNow Service.

"At this stage, the FedNow proposal is only that – a proposal," Hunt said. "Each credit union must decide based on the needs of its membership, both now and into the future."

Read Hunt's op-ed here. More information on the proposal can be found in NAFCU's Regulatory Alert; association-member credit unions can submit comments through the alert until Oct. 18.

NAFCU is a leading advocate for credit unions in the faster payments discussion, having served on both the Fed's Faster Payments and Secure Payments Task Forces, and holding member meetings with a handful of Federal Reserve Bank presidents.

The association has long pressed the Fed to play an operational role in efforts to modernize the nation's payment system and NAFCU President and CEO Dan Berger met with Federal Reserve Governor Lael Brainard to encourage the Fed to play an operational role in  a future, faster payments system.