The Federal Reserve System (Board) proposed to amend Regulation J by making technical changes to subparts A and B and adding a new subpart C to support the future FedNowSM service. As the operator of the RTP® system, TCH submitted comments that focused on aspects of the proposed amendments that may impact the competitive parity between the RTP system and the future FedNow service. TCH asked the Board to:
- Acknowledge in the supplementary information to the final amendments that (i) application of Uniform Commercial Code Article 4A (Article 4A) to consumer transfers is not the only means of providing a consistent, predictable, and clear legal framework for payment systems designed to support both commercial and consumer payments and (ii) private sector payment system rules and contracts that incorporate Article 4A with respect to commercial payments and address the rights and responsibilities of participants with respect to consumer payments are an equally valid and effective means of providing a consistent, predictable, and clear legal framework;
- Revise its competitive impacts analysis by recognizing that private sector operators do not have the ability to issue federal regulations and that the FedNow service will consequently be able to bind remote parties and address creditor process issues with respect to EFTA payments in a way that private sector systems cannot; and
- Perform and publish for public comment a second competitive impact analysis before an operating circular is finalized to support the FedNow service.
To read the full comment letter click here.