No stimulus check yet? Don't (just) blame your bank: blame your banker's bank. As this 2019 op-ed by NACHA's CEO Jane Larimer explains, "ACH payments can only be settled when the Federal Reserve’s settlement service is open." americanbanker.com/opinion/call-f… 1/6
The Fed's services are closed on weekends and holidays, so any payment request sent on such days, or too late on a Friday, can take days to et credited to the recipient's account. For years NACHA and others have urged the Fed to settle payments 24/7/365. 2/6
Yet even a modest increase in those services' weekday hours, which NACHA also urged and Larimer expected to see completed in March 2020, was delayed another year by the Fed. It's now scheduled for next week: digitaltransactions.net/fed-delay-caus… 3/6
And weekend and holiday settlements? Don;t hold your breath. The Fed has been kicking that can down the road for years--w/out offering a single cogent reason for doing so. And now it seems set on treating FedNow as a substitute for that much-needed reform. 4/6
Yet FedNow won't be up-and-running until 2023, assuming the Fed will keep its promise this time (and there are good reasons to be skeptical). Even then, FedNow is unlikely to replace ACH payments. Instead, these services will operate side-by-side. paymentsjournal.com/not-all-payday… 5/6
So, as @Aarondklein and I argued last year, if the Fed wants to do all it can to rid this country of long payday or relief-payment settlement delays, it has to quit making excuses for not enhancing its legacy settlement services. brookings.edu/opinions/we-sh…
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