Banks and Credit Unions Agree to a (Temporary) Cease Fire

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April 27, 2017

It’s not every day that community bankers and credit unions agree. Whether it is over tax-exempt status or capital requirements, we have become accustomed to the battle between community banks and credit unions.  For example, an entire section of the Independent Community Bank Association’s website is dedicated to advocating against the “expansionist agenda” of credit unions.  

So, this month when three associations representing community banks and credit unions jointly sent a letter to the Board of Governors of the Federal Reserve it rightfully deserves our attention.

In the letter, the Independent Community Bankers of America, the Credit Union National Association, and the National Association of Federally-Insured Credit Unions implore the Federal Reserve to take an operational role in the delivery of real-time payments.  Specifically, the letter urges the Federal Reserve to take on three operational roles: (1) to serve as an “on-ramp” to real-time payments; (2) to serve as a real-time payments operator, much like it is for checks, ACH payments, and wire transfers; and (3) to maintain a “payments directory” that would link together financial institutions and private-sector payments directories.

Who knows what real-time payments will drive the digital economy, but regardless of the means the Federal Reserve should play an operational role ensuring the payment system of the future is universally accessible and has safety standards beyond reproach. 

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