WASHINGTON, D.C.—Phillip Basil, Director of Banking Policy at Better Markets, released the following statement on a comment letter to the Federal Reserve Board led by the National Consumer Law Center:
“Better Markets joined efforts led by the National Consumer Law Center to ensure the Fed more fully considers consumer and small business protections in its proposed regulations that would govern its FedNow instant payments service. Faster payments can provide greatly increased convenience, competition to traditional payment methods, and access to financial services, but the speed of funds transfer could lead to more opportunities for fraudulent activities.
“Without a delay in payments settlement, there is no time to reverse a payment if fraudulent activity has been discovered, and there is very limited recourse once payment has settled. Consequently, accurate and instant verification of payment details and payment recipients as well as algorithmic detection of fraudulent activity are key aspects of ensuring consumers and businesses are protected.
“The Fed should look to incorporate these in its operations and regulations while minimizing any potential disruption to the instant payment process. Maintaining a safe and secure instant payments system through the FedNow service will benefit millions of American households and small businesses and enable them to enhance their financial wellbeing.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.