[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2243 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 2243
To amend the Expedited Funds Availability Act to require that funds
deposited be available for withdrawal in real-time, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 24, 2019
Mr. Van Hollen (for himself and Ms. Warren) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Expedited Funds Availability Act to require that funds
deposited be available for withdrawal in real-time, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Payments Modernization Act of
2019''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds the following:
(1) Families in the United States spend billions of dollars
in overdraft fees in part because they are waiting for checks
to clear over a weekend or holiday.
(2) The inefficient payment system in the United States
drives families, especially those living paycheck to paycheck,
to use high-cost financial services to access funds more
rapidly.
(3) A faster payment system would provide people of the
United States immediate access to funds and relief for those
who overdraw their accounts because their deposits are not
available in real-time, helping families potentially save
billions of dollars each year.
(4) The United States lags behind other countries in the
speed and efficiency of its payment system.
(5) Central banks around the world have already implemented
real-time payment systems, including in the United Kingdom,
Australia, Mexico, Poland, Japan, and South Africa.
(6) The Federal Reserve System was created by Congress on
December 24, 1913, in response to the financial panic of 1907.
(7) Since its beginning, the Federal Reserve System has
played a crucial role in the payment system of the United
States.
(8) The role of the Federal Reserve System in providing
payment services is--
(A) to promote the integrity and efficiency of the
payment mechanism; and
(B) to ensure the provision of payment services to
all depository institutions on an equitable basis and
in an atmosphere of competitive fairness.
(9) The Monetary Control Act of 1980 (title I of Public Law
96-221; 94 Stat. 132) provided the Board of Governors of the
Federal Reserve System with the authority to oversee the
payment system in the United States.
(10) The Expedited Funds Availability Act (12 U.S.C. 4001
et seq.), enacted on August 10, 1987, provided the Board of
Governors of the Federal Reserve System with full authority to
regulate all aspects of the payment system, including the
receipt, payment, collection, clearing of checks, and related
functions of the payment system pertaining to checks.
(11) In a July 2018 report on financial technology, the
Department of Treasury acknowledged the important role of the
Board of Governors of the Federal Reserve System in bringing
real-time payment settlement services to the United States when
the Department recommended the Board of Governors work to
facilitate a faster retail payment system, in particular, for
smaller financial institutions such as community banks and
credit unions, noting that such institutions should also have
the ability to access the most innovative technologies and
payment services.
(12) The authorities described in paragraphs (9) and (10)
are more critical than ever given how the financial services
sector has been defined as a vital component of critical
infrastructure in the United States.
(13) The role of the Board of Governors of the Federal
Reserve System in the financial services sector will ensure the
resiliency of the payment system in the United States.
(14) The Board of Governors of the Federal Reserve System
should develop a real-time interbank payment system to ensure
that--
(A) consumers are prioritized;
(B) consumers and small businesses are protected
from fraud and errors, including with respect to a
payment initiated by a consumer or small business;
(C) the payment system is open to increased
competition; and
(D) outsized entities do not monopolize the
financial infrastructure of the United States.
(b) Purposes.--The purposes of this Act are--
(1) to ensure that the United States has a safe, fast,
efficient, equitable, and fair payment system;
(2) to clarify that the Board of Governors of the Federal
Reserve System has the existing authority to build a real-time
payment system; and
(3) to make certain that the Board of Governors of the
Federal Reserve System follows through on implementing the
system described in paragraph (2).
SEC. 3. DEFINITION.
In this Act, the term ``real-time'' has the meaning given the term
in section 602 of the Expedited Funds Availability Act (12 U.S.C.
4001), as amended by section 4(a) of this Act.
SEC. 4. REQUIREMENT THAT FUNDS DEPOSITED BE AVAILABLE FOR WITHDRAWAL IN
REAL-TIME.
(a) Definitions.--
(1) In general.--Section 602 of the Expedited Funds
Availability Act (12 U.S.C. 4001) is amended--
(A) by redesignating paragraphs (20) through (25)
as paragraphs (21) through (26), respectively; and
(B) by inserting after paragraph (19) the
following:
``(20) Real-time.--The term `real-time'--
``(A) means any time; and
``(B) includes a Saturday, Sunday, and a legal
holiday.''.
(2) Technical and conforming amendment.--Section 3 of the
Check Clearing for the 21st Century Act (12 U.S.C.
5002(2)(D)(iv)) is amended by striking ``section 602(24)'' and
inserting ``section 602(25)''.
(b) Expedited Funds Availability Schedules.--Section 603 of the
Expedited Funds Availability Act (12 U.S.C. 4002) is amended--
(1) in subsection (a)--
(A) in the subsection heading, by striking ``Next
Business Day'' and inserting ``Real-time'';
(B) in paragraph (1)--
(i) by striking ``Except as provided in
subsection (e) and in section 604, in'' and
inserting ``In''; and
(ii) in the matter following subparagraph
(B) by striking ``not later than the business
day after the business day on which'' and
inserting ``in real-time when''; and
(C) in paragraph (2), in the matter preceding
subparagraph (A), by striking ``not later than the
business day after the business day on which'' and
inserting ``in real-time after''; and
(2) by striking subsection (b) and inserting the following:
``(b) Permanent Schedule.--Funds deposited in an account at a
depository institution by a check drawn on a local or nonlocal
originating depository institution shall be available for withdrawal in
real-time.'';
(3) by striking subsection (c);
(4) by striking subsection (d);
(5) by redesignating subsections (e) and (f) as subsections
(c) and (d), respectively;
(6) in subsection (c), as redesignated by paragraph (5)--
(A) in paragraph (1)--
(i) in subparagraph (A)--
(I) by striking ``Not more than 4
business days shall intervene between
the business day a'' and inserting
``A'';
(II) by inserting a comma after
``subparagraph (B)'';
(III) by striking ``is''; and
(IV) by striking ``and the business
day on which funds from such deposit
are available for withdrawal'' and
inserting ``shall be available for
withdrawal in real-time''; and
(ii) in subparagraph (B), in the
subparagraph heading, by striking ``paragraph''
and inserting ``subparagraph''; and
(B) in paragraph (2)--
(i) by striking ``, (b), and (c)'' and
inserting ``and (b)''; and
(ii) in the paragraph heading, by striking
``temporary and permanent schedules'' and
inserting ``permanent schedule''; and
(7) in subsection (d)(2), as redesignated by paragraph (5),
by striking ``(c), or (e)'' and inserting ``or (c)''.
(c) Safeguard Exceptions.--Section 604 of the Expedited Funds
Availability Act (12 U.S.C. 4003) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in the paragraph heading by striking
``Next business day'' and inserting ``Real-
time''; and
(ii) in the matter following subparagraph
(D) by striking ``on the business day after the
business day on which such cash or funds are
deposited or, in the case of a wire transfer,
on the business day after the business day on
which'' and inserting ``in real-time after such
cash or funds are deposited or, in the case of
a wire transfer, in real-time after'';
(B) in paragraph (2)--
(i) by striking ``, 603(c), or paragraphs''
and inserting ``paragraph''; and
(ii) by striking ``603(e)'' and inserting
``603(c)''; and
(C) by striking paragraph (3)(B) and inserting the
following:
``(B) any such funds deposited in excess of such
amount shall be available for withdrawal in real-
time.'';
(2) in subsection (b), in the matter preceding paragraph
(1), by striking ``(c), or (e)'' and inserting ``or (c)'';
(3) in subsection (c)(1), by striking ``(c), and (e)'' and
inserting ``and (c)''; and
(4) in subsection (d), by striking ``(c), and (e)'' and
inserting ``and (c)''.
(d) Miscellaneous Provisions.--Section 607 of the Expedited Funds
Availability Act (12 U.S.C. 4006) is amended--
(1) by striking subsections (a) and (b); and
(2) by redesignating subsections (c) through (f) as
subsections (a) through (d), respectively.
(e) Regulations and Reports by Board.--Section 609 of the Expedited
Funds Availability Act (12 U.S.C. 4008) is amended--
(1) by striking subsections (d) and (f); and
(2) by redesignating subsection (e) as subsection (d).
SEC. 5. PAYMENTS MANDATE.
The Federal Reserve shall create a real-time payment system that--
(1) at a minimum, conforms with the principles outlined in
the final report of the Faster Payments Task Force of the
Federal Reserve System;
(2) allows end users have fast access to funds in real-
time;
(3) operates as a utility, allowing end users to reach any
other end user, including unbanked, underserved and cross-
border end users, regardless of the solution used by the end
user;
(4) prioritizes safety and soundness, consumer health,
efficiency, and other relevant public interest considerations;
(5) provides end users with the confidence and trust in the
safety and security of the system by ensuring that--
(A) fraud and errors are minimized and resolved
quickly; and
(B) the assets, accounts, and information of the
end user are protected, even as payments cross
different solutions;
(6) has transparent operating information; and
(7) ensures that there are no volume discounts made that
disadvantage smaller financial institutions.
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