federal reserve

Subscribe to federal reserve via RSS

Consumers and businesses stand to benefit from rapid access to funds at any time when routed through participating financial institutions.

By Parag Patel, Barrie VanBrackle, Mik Bushinski, and Deric Behar

On July 20, 2023, the Federal Reserve announced the long-awaited launch of its real-time payment service, FedNow. The new service enables consumers and businesses to send and receive payments instantly on a 24/7/365 basis via participating financial institutions. It is available to financial institutions eligible to hold accounts at Federal Reserve Banks, and participating depository institutions may appoint a service provider or agent to submit FedNow payment instructions on their behalf. FedNow will initially only support domestic payments between US depository institutions.

FedNow can benefit consumers, businesses, and financial institutions with the promise of more flexibility and transparency of payments, improved cash flow and money management, and new customer service solutions.

feature-7

Banking organizations should ensure appropriate risk management, but regulators are skeptical of certain crypto activities as principal.

By Arthur S. Long, Pia Naib, and Deric Behar

On January 3, 2023, the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) issued a concise joint statement on crypto-asset risks to banking organizations.

Relatedly, on January 7, 2023, Mark Van…

The RFIA could make it easier for fintechs dealing in digital assets and stablecoins to access Federal Reserve bank services.

 By Alan W. Avery, Pia Naib, and Deric Behar

Latham & Watkins presents a blog series on the Responsible Financial Innovation Act, which was introduced in the US Senate on June 10, 2022, to create a framework for digital assets, cryptocurrency, and blockchain technology. This fourth post in the series covers banking and payment stablecoin issues.

In a long-awaited paper, the FRB continues its exploratory approach and emphasizes the need for congressional support.

By Alan W. Avery, Pia Naib, and Deric Behar

On January 20, 2022, the Board of Governors of the Federal Reserve System (FRB) published its long-awaited discussion paper (the Paper) on the potential benefits and risks of issuing a US central bank digital currency (CBDC). The Paper, titled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” is intended to initiate a discussion around the various factors the FRB is considering with respect to a potential US CBDC rather than “advance a specific policy outcome.”

US lawmakers urge FSOC to designate cloud-based storage systems used by major banks as systemically important financial market utilities.

By Alan W. Avery, Victoria McGrath, and Pia Naib

In an August 22, 2019, letter addressed to Treasury Secretary Steven Mnuchin, in his capacity as chair of the Financial Stability Oversight Council (FSOC), Congresswoman Katie Porter and Congresswoman Nydia Velazquez urged Secretary Mnuchin to designate the three leading cloud-based storage systems used by major banks — Amazon Web Services, Microsoft Azure, and Google Cloud — as systemically important financial market utilities (SIFMUs). This designation would subject such cloud-based storage systems to supervision and regulation by the Board of Governors of the Federal Reserve System (Federal Reserve). Citing Title VIII of the Dodd-Frank Act, which was enacted to promote stability in the financial system, the Congresswomen highlighted the dependence on cloud services by banks and financial institutions for their data needs and the subsequent risks such services pose to the safety and stability of the financial system.

The Federal Reserve is finally stepping into the real-time payments arena.

By Todd Beauchamp, Loyal T. Horsley, and Deric Behar

On August 5, 2019, the Board of Governors of the US Federal Reserve System (the Fed) announced that it plans to roll out a real-time payment and settlement service by 2023 or 2024. The service, named FedNow, is being developed with the stated goal of modernizing the national payment system. Facing political and societal pressure to upgrade the national payment system, the Fed sought comment on the development of a faster payment service in late 2018. After receiving more than 350 comments, the Fed is now moving forward and seeking additional comment on the best way to design the system so that it maximizes inclusivity and utility for all stakeholders. The Fed envisions that FedNow will capitalize on its nationwide infrastructure to provide consumers, businesses, and banks the ability to safely make and receive immediate and fully settled payments 24 hours a day, seven days a week.