Community bankers testify before Congress on FedNow payments system

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The Independent Community Bankers of America (ICBA) testified in front of two Congressional committees this week to speak in support of the Federal Reserve’s decision to build a real-time payments system.

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The Federal Reserve’s proposed FedNow system is designed to ensure direct access to faster payments for all financial institutions and their customers.

“The Federal Reserve is uniquely positioned to provide access to real-time payments because it already provides payments services to nearly 11,000 financial institutions of different sizes and charter types,” Steen said. “The Fed has not only the authority but the duty, to build and operate our real-time settlement system. Now, the Fed must move quickly to establish the service,” Robert Steen, chairman and CEO of Bridge Community Bank in Mount Vernon, Iowa, speaking before both the Senate Banking Committee and the House Financial Services Committee’s Task Force on Financial Technology.

The U.S. payments system lags much of the rest of the world in faster payments, Steen said. He contends that the Clearing House’s for-profit payments network is a monopoly unable to provide ubiquitous access to financial institutions and consumers. FedNow will ensure competition, choice, universal access and affordability, Steen said. ICBA has been a long-time advocate for the Fed’s role in real-time payments.

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