Payments System Integrity

ABA Position

ABA believes that U.S. consumers benefit from a payment system that is secure and reliable and that regulated depository institutions serve as vital stewards, working with federal regulators to support the long-term interests of the system. To maintain long-term reliability and security, strong, uniform standards for direct payment system access are critical.

An efficient payment system allows consumers, businesses and banks to send and receive payment transactions with confidence. That confidence is predicated on transactions being conducted by intermediaries that are subject to full federal regulation and oversight, and that comply with applicable anti‐money laundering and sanctions requirements. This ensures the integrity of the system, but also that consumer protections are uniformly applied. The payments system has performed amazingly well through times of economic stress, but its strength is derived from consistent application of high regulatory and supervisory standards across every endpoint.

Access to Federal Reserve Accounts and Services

ABA supports the transparent vetting and adoption of a uniform policy across the Federal Reserve System that sets forth appropriate criteria for evaluating applications by non-traditional applicants for master account and direct payment system access. As non-banks begin to offer payment products, it is imperative that they comply with the same requirements as banks and are subject to the same comprehensive system of federal regulation and oversight. Entities that do not meet the criteria for direct access to Federal Reserve Bank payment services should be required to offer such services through qualifying depository institutions.

Novel Charters

ABA supports new technology and business models in banking, but has concern with proposals that would create lower standards for safety, soundness and consumer protection. We support the transparent and thorough vetting, through notice and comment, of changes to OCC policy regarding eligibility for a national bank charter. Non-depository applicants for national bank charters may be called banks, but they will not be subject to consolidated supervision, will not have FDIC oversight, do not fit the definition of “bank” under the Bank Holding Company Act, and may create new opportunities for fraud or money laundering. Further, as non-depositories, special-purpose state charters and non-traditional OCC chartered banks will not be subject to the Community Reinvestment Act, and it is not clear how they might be held to equivalent requirements to meet the needs of low and moderate income Americans. Although innovation in financial products and services is an important priority, a national bank charter grants the bearer significant privileges and responsibilities and the consequences of altering the eligibility for that charter must be considered carefully.