NCLC supports the Federal Reserve Board’s proposed rule to expand the operating hours of the National Settlement Service (NSS) but urges the Board to take additional measures to address and prevent fraud occurring via Fedwire before expanding its operating hours.
Expanding NSS operating hours means faster ACH payments, the means by which most Americans pay bills and get direct deposit. American workers could get paid on weekends and holidays, which is especially important for those who work shifts or gigs over weekends and holidays. They could receive Direct Deposits to their bank accounts sooner than the next banking day. Receiving their pay over the weekend also means consumers would be able to make timely payments over the weekend. In addition to paying their credit cards or bills, they would be able to transfer funds between their own accounts or send money to family and friends more quickly. These transfers could all be settled over weekends and holidays, resulting in faster use of those funds. The expansion of the NSS will be a boon to both consumers and businesses, providing a safer alternative to other faster payment platforms like Venmo, PayPal, the Cash App, or Zelle.
However, consumers may be harmed by the expansion of Fedwire operating hours because of the high prevalence of fraud and the lack of strong consumer protections for bank-to-bank wire transfers. If the Federal Reserve Board decides to expand the operating hours for Fedwire, NCLC strongly urges the Board to take measures to prevent and address fraud. These comments suggest measures the Board could employ to address bank-to-bank wire transfer fraud committed through Fedwire.
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