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Powell talks faster payments with Senate panel
Federal Reserve Chairman Jerome Powell – during testimony Thursday before the Senate Banking Committee – answered questions about the development of a real-time payments system. NAFCU has worked to ensure credit unions' perspective on a safer, faster payments system is considered as the Fed and other stakeholders work on the issue.
Powell was delivering the agency's semiannual Monetary Policy Report; he testified before the House Financial Services Committee Wednesday.
Responding to questions from Sen. Chris Van Hollen, D-Md., Powell indicated that the Fed is currently reviewing comments on its proposal to develop a 24/7/365 real-time gross settlement (RTGS) service. Powell also noted the support of the proposal from small financial institutions; NAFCU in December shared how credit unions could benefit from faster payments services and has encouraged the Fed to play an operational role in a future, faster payments system.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, also asked about data collection practices and efforts to ensure consumers have privacy and control over their data. Powell acknowledged the importance of this and said more work needs to be done on the issue. NAFCU's Cybersecurity and Payments Committee recently received an update on the Fed's work to identify and mitigate payments fraud risk from The Federal Reserve Bank of Chicago's Tim Boike, and also discussed consumer privacy legislation.
In addition, Powell provided economic updates to the committee and shared what trends the Federal Open Market Committee (FOMC) is watching as it sets monetary policy. NAFCU Chief Economist and Vice President of Research Curt Long expects the FOMC to cut rates later this month.