The Independent Community Bankers of America (ICBA) is calling on the Federal Reserve to develop a real-time payments settlement system to avoid a megabank monopoly.
The Federal Reserve is uniquely positioned to provide equitable access to real-time payments, ICBA President and CEO Rebeca Romero Rainey wrote in a letter addressed to Fed Chair Jerome Powell. This will encourage innovation that will benefit customers, she added.
“Industry-wide ubiquity may never be achieved without the Federal Reserve developing and operating a real-time gross settlement system and interoperating with the private sector,” Romero Rainey wrote. “The Federal Reserve’s development and operation of a real-time gross settlement system would also insert needed competition into real-time payments.”
Having a Fed-run system for real-time payments would avoid the risk of having only one, for-profit settlement service run by the nation’s largest banks. This would prevent a monopoly and give community banks a choice of settlement providers. In turn, it would extend access to payments technology to local communities.
The nation’s community banks have long advocated for a Fed alternative, as have leading consumer groups, technology leaders, and retailers. ICBA will continue working with policymakers to support a real-time payments settlement system at the Federal Reserve. The letter also went to other members of the Federal Reserve Board as well as members of Congress.
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