The American Bankers Association last week submitted comments in support of the Federal Reserve’s recent proposal to modify the Federal Reserve Banks’ National Settlement Service and Fedwire Funds Service to accommodate a third same-day ACH processing and settlement window. The proposal would extend the operating hours of the NSS to close at 6:30 p.m. instead of 5:30 p.m. and Fedwire would close at 7:00 p.m. instead of 6:30 p.m. This would compress the time window between the closing of Fedwire for one day and its reopening for the next business day from 150 minutes to 120 minutes.
ABA offered support for the proposal with two recommended modifications to mitigate the risk of delayed Fedwire openings due to the shorter period between closing and reopening. First, ABA recommended that the Fed increase the threshold for extension requests from $1 billion to $2 billion. Second, the association called on the Fed to change its policy requiring a two-hour window between the closing of Fedwire for one day and reopening of the next day to 90 minutes.