To reinforce the Federal Reserve’s authority to create a real-time payments system and mandate that the Fed brings about its own process, two U.S. representatives and two U.S. senators have introduced the Payment Modernization Act of 2019. The legislation was brought forward by Congresswoman Ayanna Pressley (D-MA), Senators Chris Van Hollen (D-MD) and Elizabeth Warren (D-MA), and Congressman Jesús “Chuy” García (D-IL), according to an announcement.
Americans lose billions every year in overdraft fees, which causes consumers to turn to financial products that are more expensive “because of our inefficient payments system,” per a press release from Pressley’s office. Pressley, who is a House Financial Services Committee member, “held Federal Reserve Chairman Jerome Powell accountable for the Federal Reserve’s slow-walking implementation of a real time payments system.” The announcement said that “Pressley reaffirmed that a faster payments system is a public good, if not a right” during a line of questioning.
U.S. Rep Pressley said in the announcement, “Thousands of people in the Massachusetts 7th [district] live paycheck to paycheck and cannot afford to wait days for their checks to clear. The Federal Reserve Bank has a responsibility to respond to the needs of the American public, such as establishing an inclusive and faster payments system. Our bill, the Payment Modernization Act of 2019, will ensure that the Federal Reserve speeds up the process of clearing payments so that all hardworking Americans can access and move their money quickly, safely and securely 24/7/365.”
U.S. Senator Van Hollen said, according to the announcement, “Every day that passes without a better payments system in place puts the United States farther behind other major economies, and millions of working Americans – especially those living paycheck to paycheck – are paying the price. That’s why I’m teaming up with my colleagues to introduce this bicameral legislation, which will ensure that the Fed acts without delay to develop a fast, efficient, equitable and fair payments system.”