The undersigned provide input the Federal Reserve Board on the Notice of Proposed Rulemaking concerning Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers Through Fedwire.
As described below, we support the Fed’s efforts and recognition of the need to craft rules to govern the operation of FedNowsm and expectations of FedNowsm participants and end users, as clear and specific rules are critical to the broad adoption of FedNowsm by all stakeholders, including consumers, business end users, and financial institutions.
However, we have concerns about the need for clarity on a wide variety of topics including security, red flags for fraud and error, error resolution, and clear delineation of what law and rules will apply. The below comments explore, among other things, the Board’s proposed interplay between the Electronic Funds Transfer Act/Regulation E and Uniform Commercial Code Article 4A as applied to FedNowsm transactions and highlight a number of areas wherein we believe additional consideration is due to ensure adequate clarity and specificity to achieve the Board’s goal of a secure, trusted system.