FRB Seeks Comment on Multiple Changes to its Policy on Payment System Risk

The FRB issued a request for public comment (the “Request for Comment”) to Part II of the FRB’s Policy on Payment System Risk; Procedures for Measuring Daylight Overdrafts (the “PSR Policy”).  The changes to the PSR Policy largely involve changes to the posting rules for automated clearing house (“ACH”) and commercial check transactions.  The FRB said that the changes “are intended to align [the posting rules] with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement.”

The changes to the PSR Policy, among other things would:

  • move the posting of ACH debit transactions from 11:00 A.M. Eastern Time (“ET”) to 8:30 A.M. ET;
  • provide a set of principles for establishing future posting rules for the Federal Reserve Banks’ same-day ACH service;
  • move the posting time for receiving most credits for deposits of commercial checks and debits for presentments of commercial checks from 11:00 A.M. ET to 8:30 A.M. ET (and establish two other posting times at 1:30 P.M. ET and 5:30 P.M. ET); and
  • adopt parallel amendments to the FRB’s Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire).

Comments on the changes to the PSR Policy are due by February 10, 2014.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  ACH Payments, Bank Deposits, Commercial Checks, Federal Reserve, Overdraft Fees, Payment Systems, PSR Policy

Published In: Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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