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February 19, 2019

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Faster Payments Task Force Issues Part Two of Final Faster Payments Report

 The Faster Payments Task Force (the Task Force) has issued part two of its Final Report that sets forth a blueprint for achieving faster and more secure payments in the U.S. by 2020.

Convened by the Federal Reserve Board (FRB) and comprised of a broad cross-section of over 300 industry, government and consumer group stakeholders, the Task Force released part one of its Final Report in January 2017 which outlined the Task Force’s goals and the many advantages of faster payments.  Instead of championing a single method to achieving “ubiquitous faster payments,” the Task Force states in part two that it favors competition among a wide array of potential ways to achieve this goal and supports collaboration with industry stakeholders to ensure “broad adoption; safety, integrity and trust; and interoperability.”

In addition, the Task Force makes ten recommendations:

  • Create an industry-led faster payments governance framework;
  • Put in place requirements that are designed to foster broad adoption; safety, integrity, and trust; and interoperability;
  • Evaluate and propose changes to the existing payments regulatory regime;
  • Develop a design for directory services that facilitates interoperability;
  • Improve FRB settlement mechanisms to support faster payments;
  • Assess the need for a FRB operational role in the faster payments system;
  • Develop and incorporate ways by which to timely detect and report fraud;
  • Create programs for end-users and service providers to enhance awareness and adoption of faster payments;
  • Engage in research and analysis to promote greater understanding of cross-border interoperability; and
  • Conduct continued research about emerging technologies.

To accomplish the ambitious goal of faster payments by 2020, efforts to implement the Final Report’s recommendations must begin this year.  Notably, the FRB has announced that Dave Sapenaro – First Vice President and COO of the St. Louis Fed – will be the payments strategy director in charge of implementing the initiatives detailed in the FRB’s 2015 paper “Strategies for Improving the U.S. Payment System.”  This paper called for the creation of the Task Force, and the Final Report can be expected to inform the FRB’s thinking.  We will monitor and report on new developments as they occur.

Copyright 2019 K & L Gates

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About this Author

Eric A. Love, KL Gates, Capital Markets Compliance Lawyer, Treasury Legislation Attorney
Law Clerk

Eric A. Love is a member of K&L Gates’ Public Policy and Law Practice and is based in the Washington, D.C. office. Mr. Love focuses on federal legislative and regulatory policy issues related to financial services and capital markets, with a particular emphasis on securities and corporate governance. 

Prior to joining K&L Gates, Mr. Love served as a special assistant in the Office of Legislative Affairs at the U.S. Department of the Treasury. In this capacity, he worked to help advance Treasury’s legislative agenda on a broad portfolio...

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Judith E. Rinearson, KL Gates, federal consumer protection lawyer, anti money laundering attorney
Partner

Judith Rinearson is a partner in the firm’s New York and London offices. Ms. Rinearson concentrates her practice in prepaid and emerging payment systems, electronic payments, crypto/virtual currencies, reward programs, ACH and check processing. She has more than 25 years of experience in the financial services industry, including 18 years at American Express’s General Counsel’s Office. Her expertise focuses particularly in the areas of emerging payments and compliance with state and federal consumer protection laws, anti-money laundering laws, state money transmitter licensing laws and abandoned property laws. 

Fully experienced in both the “issuing” and “acquiring” side of the payments business, Ms. Rinearson has drafted and negotiated complex agreements with strategic co-branded partners, processors and Independent Sales Organizations (ISOs), ATM networks, major retailers and service providers, prepaid card issuers and program managers, international remittance companies, virtual and mobile payment providers, as well as the Terms and Conditions and disclosures that usually accompany such products. She has hands-on experience in all legal aspects of launching and managing a range of payment products, from prepaid cards of all kinds, to Bitcoin exchanges and miners, wire transfer services, ACH, electronic banking, money orders and credit cards. Her practice includes advising on fraud avoidance and compliance with federal banking and anti-money laundering laws, as well as state money transmitter licensing laws, consumer protection laws and abandoned property laws. On the international level, Ms. Rinearson has supervised the launch of a range of payment and foreign currency products in Europe, Asia and Latin America; met with international regulators; and spoken on the issue of payment regulation. 

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