Banking and Finance Law Daily Fed changes implementation date for Reserve Bank payment services modifications
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Monday, September 28, 2020

Fed changes implementation date for Reserve Bank payment services modifications

By Colleen M. Svelnis, J.D.

The Fed moved up the date to allow the Reserve Banks to test and implement modifications before the effective date.

The Fed announced that it is amending the implementation date for modifications to the Federal Reserve Banks’ payment services to facilitate adoption of a later same-day automated clearinghouse (ACH) processing and settlement window. This amendment also applies for corresponding changes to the Federal Reserve Policy on Payment System Risk (PSR policy). The previously announced date of March 19, 2021 is being amended to March 8, 2021, with the exception of two changes to the PSR policy regarding posting times for settlement of same-day ACH transactions that will still be implemented on March 19, 2021. The Fed approved the modifications on Dec. 30, 2019.

According to the agency, the earlier implementation date will allow the Reserve Banks to test and implement modifications to the Fedwire® Funds Service and the National Settlement Service, including changes to the operating hours of those services, before March 19, 2021, which is the current effective date for implementing the later same-day ACH window.

The modifications were approved in December 2019 to both the National Settlement Service and Fedwire Funds Service, as well as corresponding changes to the "Federal Reserve Policy on Payment System Risk" related to a new posting time for transactions and an increased daylight overdraft fee.

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