As The U.S. Federal Reserve decides whether it will build its own real-time payments system, lawmakers have weighed in on if the country’s banking system needs a government agency-built and operated solution.
Politico reports that the issue is “increasingly partisan with free-market Republicans balking at a government-run payment system and some Democrats arguing that the Fed is better positioned to ensure lower-income Americans receive the benefits.”
“I don’t see the need for it,” said Sen. Pat Toomey (R-Pa.) “The private system has committed and would be obligated to be available to all regulated financial institutions.”
Toomey added, “I’m not in favor of the government going into the car business … [or any kind] of other businesses where the private sector provides services.”
Senator Toomey cited the DOJ’s action in reviewing and approving The Clearing House’s then-planned operation of the RTP® network in support of the private sector’s action. “Notably, the DOJ issued a business review letter in 2017 blessing the companies' proposed plan, saying it might be “pro-competitive,”” said Toomey.
In an economic plan released by her campaign on July 18, Sen. Elizabeth Warren (D-Mass.) pledged to appoint Fed board members who would implement real-time payments, per Politico.
“I’m not worried about the competition from the Fed,” said Steve Ledford, senior vice president of products and strategy at The Clearing House. “The more people realize what’s involved, and that the Clearing House is already out there doing this, the more support we get.”
Banking organizations already see value in the RTP Network from The Clearing House.
“In 2015, the Federal Reserve called on the private sector to build a real-time payments system,” said Greg Baer, president and CEO of the Bank Policy Institute. “The Clearing House, and only The Clearing House, responded by building the most advanced payments system in the world.”
Read the entire Politico story.