The Federal Reserve has released a request for comment on potential changes to its National Settlement Service (NSS) and Fedwire Funds Service, as well as feedback on a possible new posting time for transactions, and an increased daylight overdraft fee.
"On Sept. 13, 2018, NACHA, the rules and standards body for the ACH network, announced that its voting members had approved amendments to the NACHA Operating Rules & Guidelines to establish a third Same Day ACH processing and settlement window," the Federal Reserve wrote in the announcement. "Currently, there is a morning window with a submission deadline of 10:30 a.m. ET and settlement at 1:00 p.m. ET, and an afternoon window with a submission deadline of 2:45 p.m. ET and settlement at 5:00 p.m. ET."
The announcement continued, "The new window, with a submission deadline of 4:45 p.m. ET and settlement at 6:00 p.m. ET, would allow originating depository financial institutions to submit same-day items later in the business day. A third Same Day ACH window aligns with the Federal Reserve's ongoing objective to support improvements in the safety and efficiency of payment systems in the United States, as well as public interest in greater availability of payment services. In particular, the later Same Day ACH window would allow more institutions to use Same Day ACH services during a greater portion of their business day, and may promote greater adoption of Same Day ACH, and availability of the service to originators and end users."
In addition, these changes would lead to adjustments in the central bank's services so that The Clearing House (TCH) would be able to settle same-day transactions later in the day, via the NSS. The changes would include "extending the closing of NSS by one hour to 6:30 p.m. ET; changing the cutoff time for Reserve Bank account holders to initiate transfers on behalf of third parties via the Fedwire Funds Service (Fedwire Funds third-party cutoff) by 45 minutes to 6:45 p.m. ET; [and] extending the closing of the Fedwire Funds Service by 30 minutes to 7:00 p.m. ET."
The bank pointed out that these time adjustments could also increase some risks and costs for Federal Reserve account holders and their customers. With that in mind, the Federal Reserve has proposed ways to manage any increased risks that could result from the changes.