Proposed change ensures American payments industry remains a critical part of the global payments ecosystem

Washington, D.C. (September 6, 2024) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies, innovative banks, and a variety of payments providers, submitted a comment letter to the Board of Governors of the Federal Reserve System’s (FRB) Request for Comment on the Expansion of Fedwire Funds Service and National Settlement Service Operating Hours. AFC supports the Federal Reserve’s proposal, as the expansion will enhance the safety and efficiency of the U.S. payment system by allowing settlement in risk-free central bank money over a larger portion of each day.

“As the global economy grows and the demand for seamless cross-border payments increases, American financial market infrastructure must continue developing to support responsible, impactful, and fast-paced innovation that mitigates risk and increases accessibility for all consumers,” said Phil Goldfeder, Chief Executive Officer of AFC. “The FRB’s proposal is a welcome step in that continued evolution. AFC and its members strongly support and are ready to accommodate this change.”

In their letter, AFC noted that the extended operating hours will reduce counterparty risks, particularly credit and liquidity risks, by minimizing settlement delays that currently exist due to the limited operating hours of Fedwire and the National Settlement Service (NSS). By allowing for more timely settlements, financial institutions can better manage their liquidity and risk profiles, ultimately contributing to a more resilient financial services industry.

AFC members, comprising responsible financial institutions and fintech companies, are well-prepared to operate under the proposed extended hours, and this change would support the ongoing development of advanced payment platforms and technologies, promoting further innovation within the U.S. financial system.

“AFC believes it is crucial that the Federal Reserve expand the hours of operation of the Fedwire Funds Service and NSS to 22x7x365, with the further intent to move these systems to a 24x7x365 operating posture.” wrote Ian P. Moloney, SVP, and Head of Policy and Regulatory Affairs in AFC’s Letter to FRB. “We ultimately recognize the importance of moving to this operating posture as soon as possible in order to further innovation in the payments system, meet industry and consumer expectations, and ensure that the U.S. payments system remains a core aspect of the global payments ecosystem.”

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative BaaS banks. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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The AFC’s full letter is available here.