Federal Reserve Files Comments on ACH Transaction Proposal

Fed concerns echo NACS objection to interbank fee, which could pass costs on to customers.

February 17, 2015

WASHINGTON – Last week, NACS responded to NACHA – The Electronic Payments Association’s request for comment on its proposal to implement same-day Automated Clearing House (ACH) transactions. The proposal seeks to modernize the U.S. ACH system, which currently offers next-day processing as its fastest option, to allow for same-day processing of most ACH transactions. To pay for this upgrade, NACHA proposed charging an 8.2 cent “interbank fee” per same-day ACH transaction.

In the comments, NACS noted that implementation of an interbank fee appears suspiciously similar to a swipe fee, and would ultimately undermine ACH as a low-cost alternative to payment cards. Now, the Federal Reserve Board is expressing some concern as well.

According to American Banker, the Fed submitted its own comment letter, raising three significant objections to the plan, including arguing that since banks would be likely to pass the cost of the fee onto businesses originating same-day payments, NACHA should involve those businesses in the rulemaking process. The comments also reflected NACS’ view that determining the fee based on "opportunity costs" and a "risk-adjusted fair rate of return" could wind up inflating the price of what has traditionally been a low-cost service. Lastly, the Fed pointed out that the added costs of a fee would make people and businesses less likely to use same-day ACH, thereby making it a less effective option.

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