As policymakers consider proposals related to payment system access, such as new chartering models and Federal Reserve account access, they should proceed cautiously or risk weakening the coherence of the existing payments framework, the American Bankers Association told House lawmakers.
The House Financial Services Financial Institution Subcommittee held a hearing today on the future of payments, with lawmakers exploring topics such as the increasing number of nonbank entities seeking trust charters and a Fed proposal to create new “skinny” master accounts for payment services. In comments submitted ahead of the hearing, ABA noted that many payment innovations were developed and deployed by banks operating within a strong regulatory framework.
“ABA and our members support continued innovation in payments,” the association said. “At the same time, we believe that efforts to expand access to payment system infrastructure and create new chartering pathways must reinforce the core strengths of the U.S. financial system – its safety, soundness and trust – rather than weaken them.”
ABA said any changes to payments system policy or regulation should adhere to the following principles:
- Access to the payments system must be paired with robust supervision
- Avoid proposals that allow firms to selectively access key elements of the banking system, such as payment rails, without assuming the full set of obligations that accompany those benefits
- Maintain Fed discretion and risk-based review for accounts and access
- Proceed cautiously with new access and charter models
