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NAFCU is collecting member feedback on whether credit unions support the Federal Reserve developing a 24/7/365 real-time gross settlement (RTGS) service to facilitate interbank settlement of faster payments and how access to such a service might be provided.

Credit unions can provide comments via NAFCU's Regulatory Alert. Comments are due back to the association by Nov. 22; final comments are due to the Fed by Dec. 14.

Earlier this month, the Federal Reserve released a proposal relating to a potential settlement service and liquidity management tool that could help address the future needs of a real-time retail payments environment. The Fed is encouraging comments on the proposal – especially from smaller financial institutions, such as credit unions. The proposal was issued during a NAFCU-attended forum with the FedPayments Improvement Community.

The Fed's request for comments also asks whether it should consider developing an RTGS service that would allow interbank settlement of faster payments using financial institutions' balances in accounts at Reserve Banks, which would be accessed in a way similar to the Fedwire Funds Service. To support faster payments in general, whether offered by the private sector or through Reserve Banks, the Fed is wanting input on whether it should develop a liquidity management tool, possibly based on the existing National Settlement Service (NSS).

The Fed is holding public town hall meetings to go over this proposal in its 12 districts; NAFCU will attend a session Oct. 30 in Philadelphia. More information on dates, locations and registration can be found here.

As the Federal Reserve seeks to update the payments system, NAFCU has ensured that the credit union perspective on any advancements is taken into account. NAFCU has served on both the Fed's Faster Payments and Secure Payments Task Forces, which were formed as a part of the Fed's "Strategies for Improving the U.S. Payment System," since their inception in 2015. The conclusion of those task forces led to the development of the FedPayments Improvement Community, of which NAFCU is a member.

NAFCU continues to be in constant communication with the Fed regarding its work to make the payments system faster and more secure; the association met last week with Fed staff to discuss the strategy for achieving more secure payments. NAFCU has also urged the Fed to stay away from a "one size fits all" approach to the payment system's future. It will continue to represent the credit union industry's best interests in this process.