The Clearing House Association and the Bank Policy Institute submitted a letter to the Federal Reserve Board supporting a regulatory proposal that would allow the use of intermediaries, other than Reserve Banks, to send funds transfers through the FedNow^® Service. The proposed changes would enable the FedNow Service to settle the domestic legs of international funds transfers.

While generally supportive of the proposal, the letter makes several recommendations that recognize banks’ sanctions compliance and anti-money laundering obligations in the context of an instant payment system. These recommendations include establishing a specific FedNow message code to identify cross-border transactions, providing an initial discretionary opt-in period for participants, and adjusting FedNow response times for international transactions.

To read the full letter click here.