With a problem at the Federal Reserve that has since reportedly been fixed, direct deposits, as well as other financial transactions, were delayed on Thursday (Dec. 19). Banks were told about a “disruption” in the automated clearing house (ACH) network that brought about delays in settlements, CNN reported.
The Fed noted at 10:31 a.m. Eastern Time that all systems were functioning as they typically do, and the issue had been resolved by technical staff. According to the report, it is not known how many banks experienced or what caused the glitches. However, the Fed said in a statement per the report that tech staff still are still looking into the problem’s fundamental cause.
The central bank also noted that payment files for Dec. 18 have been finished, but some transaction reports will not be on time. Florida-based financial service firm VyStar Credit Union told clients about delays. VyStar noted in a tweet, “The Federal Reserve is encountering issues, which is delaying ACH files.” It continued, “This issue is affecting all financial institutions. We will process the file as soon as we receive it.”
The biggest U.S. bank, JPMorgan Chase, told the outlet that is seeing just “minimal impact for customers at this time.” In an alert, the Fed said, “We apologize for the inconvenience and disruption this has caused to your operations.”
In separate news, reports surfaced in August that the Fed plans to build its own instant clearing and settlement rails. The Fed’s instant payment scheme FedNow, which was introduced by Federal Reserve Board Governor Lael Brainard, is designed to offer an option for business as well as consumers to transfer money instantly or nearly instantly in a “ubiquitous, safe and efficient” manner from one bank account to another.
“We only get to make this kind of decision once every 30 or 40 years,” Brainard said, noting that this was the largest payments oriented move made by the Federal Reserve as of the early 1970s and the implementation of the ACH system.