#2023-14, June 30, 2023

Federal Reserve Bank Announces Certified Banks for FedNow Service

The Federal Reserve Bank (FRB) has been working with early adopter financial institutions and service providers during the implementation and readiness phases of the FedNow Service launch. On Thursday June 29th, the FRB announced that 57 organizations have completed formal testing and certification on the FedNow Service. Completing this process means many of these financial institutions will be live when the service launches later this summer, with financial institution participants ready to send and receive transactions and service providers supporting this activity.

The MBA hosted a FedNow Service workshop in late March and continues to engage with FRB colleagues on professional development and member engagement on this key industry issue. Instant payments are of utmost importance, and we would recommend members review certain FRB resources on instant payments and their FedNow Service.

The FRB hosts a video on the role of financial institutions in the life of a FedNow Service payment. You can watch this video by clicking here. Bank staff at your institution should consider signing up for FedNow Service emails at this website.

To read about the FedNow Service 2023 Fee Schedule, please click here.

Finally, your bank can take a FedNow Service readiness assessment at FRBServices.org by clicking here.

FDIC Updates Supervisory Guidance on Representment Fees

In August 2022, the Federal Deposit Insurance Corporation (FDIC) issued supervisory guidance on multiple re-presentment non-sufficient funds (NSF) fees. An important update has been made to the FDIC guidance that publicly indicates the FDIC will not request lookbacks. The final footnote of the guidance read as follows:

        “The FDIC has generally accepted a two-year lookback period for restitution in instances where institutions have been unable to reasonably access accurate ACH data for re-presented transactions. In addition, based on the on-going and extensive challenges observed in accurately identifying re-presented transactions through core processing systems, the FDIC does not intend to request an institution to conduct a lookback review absent a likelihood of substantial consumer harm.”

This language is a positive step but does leave room for subjective assessments of compliance management and does not specifically define “substantial consumer harm”. It should be noted there are components of federal law on banking and commerce that take substantial injury to mean both monetary and reputational harm.

Please contact the MBA with any questions or pertinent information you can share on this important compliance development. In the interim, we suggest reading the updated FDIC supervisory guidance by clicking here.