August 10, 2022 — Letter

As the Federal Reserve Board (FRB) continues its work to launch the FedNow Service (FedNow), we urge the Federal Reserve Banks (Reserve Banks) to take additional steps to prevent bad actors from using FedNow to steal funds from members of the public and to address errors. We are disappointed that the Board declined our request to incorporate fraud and error protections into the final Regulation J rule, but we appreciate the Board’s statement that it is “committed to promoting the development and implementation of industry-wide measures to help financial institutions detect and prevent fraud.”

Adopting measures to prevent and remedy fraud and errors will not only protect consumers and other users of FedNow, but will be critical to protecting the integrity of and confidence in the system.