Dive Brief:
- The Federal Reserve Board is extending its public comment period regarding its proposal to expand the operating days of its two large-value payments services, the Fedwire Funds Service and the National Settlement Service, the central bank said Friday. The Fed originally planned in May to close the comment period on its proposal by July 8, but has now extended the deadline to Sept. 6, 2024.
- The two services currently operate Monday through Friday, with the exception of holidays, but the Fed is considering running them both daily throughout the year. The services would operate the same number of hours on the added days as they currently do during the week. While the Fedwire Funds Service is currently open 22 hours per day, the National Settlement Service operates 21.5 hours per day, the agency said.
- The changes to add operating days would exclude any changes to the Fedwire Securities Service or the Fed’s FedNow service, the release said.
Dive Insight:
The Fed has long weighed whether to expand operations of Fedwire and NSS as part of its pursuit of faster payments. After initially announcing in 2019 that it was considering extending the hours, the agency is finally getting around to soliciting public comment on the policy change.
During a 2019 presentation, a former Federal Reserve Governor Lael Brainard noted that the public “deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community.”
Amid its pursuit of improved payments services, the Fed has had some hiccups along the way. In 2021, the agency confirmed that it had an “operational error” that led to outages of its 14 services, including Fedwire Funds. The Fed later told The Wall Street Journal that the issue arose from a “human error.”
Beyond extending its hours, the Fed has sought to make other changes to the Fedwire Funds Service as part of its efforts to set new payment technology standards. In 2021, the agency said it would adopt the ISO 20022 messaging standard, which could speed up cross-border payments, for Fedwire Funds Services by 2025.
