BankNews Feb. 2015

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Chair Janet Yellen Speaks on Monetary Policy and Financial Stability

July 3 – Federal Reserve Chair Janet L. Yellen addressed monetary policy and financial stability at the 2014 Michel Camdessus Central Banking Lecture, International Monetary Fund, Washington, D.C. Below are her comments.

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Ranking Member Waters Leads House Democrats in Supporting Janet Yellen for Federal Reserve Chairman

Aug 1 – Financial Services Committee Ranking Member Maxine Waters, joined by 37 of her fellow Democrats, delivered a letter urging President Obama to nominate Janet Yellen, current vice chairman of the Board of Governors of the Federal Reserve System, to replace Ben Bernanke as chairman of the Federal Reserve when his term expires.

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Fed Vice Chair Janet L. Yellen Gives Outlook on the Economy

October 21 – Federal Reserve Vice Chair Janet L. Yellen gave a presentation titled, “The Outlook for the U.S. Economy and Economic Policy” at the Annual Meeting of the Financial Management Association International. Her comments follow:

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FOMC: Rate Change Unlikely in April

March 18 – The Federal Reserve Board of Governors has issued a statement indicating where the Federal Open Market Committee stands on a rate change at its next meeting. Continue reading “FOMC: Rate Change Unlikely in April” »

In Final Speech as Dallas Fed Chief, Fisher Warns of ‘Incentive to Renege’ on Raising Rates

imagesMarch 17 – Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas, spoke at Rice University Baker Institute for Public Policy recently in what was billed as his final speech as a Fed official. Fisher, whose 10-year tenure at the Fed ends this month, openly questioned whether the FOMC would face an “incentive to renege” on raising rates. Continue reading “In Final Speech as Dallas Fed Chief, Fisher Warns of ‘Incentive to Renege’ on Raising Rates” »

Most Influential Women in Payments Honored by PaymentsSource

March 13 – PaymentsSource, providing news and analysis for payments professionals, has announced the honorees for the 2015 Most Influential Women in Payments. PaymentsSource will celebrate the accomplishments of these exceptional leaders on April 8th at an honoree panel discussion and reception, held during the 27th Annual Card Forum & Expo at the Chicago Marriott Downtown, hosted by PaymentsSource and American Banker.

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NACHA Board of Directors Elects New Officers, Adds New Members

January 20 – NACHA The Electronic Payments Association has announced the election of new officers and the addition of five new and two re-elected members to its Board of Directors. The Board consists of 19 voting members representing a diverse set of depository financial institutions of all sizes and types that support and warrant the payments on the ACH Network.

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Community Banker Legislation Passes Senate as Part of Terrorist Risk Insurance Act

January 9 – U.S. Sen. David Vitter (R-La.) has announced that the Terrorist Risk Insurance Act (TRIA) passed with his legislation to require the Federal Reserve Board of Governors to have at least one member with community bank or community bank supervision experience. TRIA passed the Senate today, with Vitter’s legislation, 93-4.

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NACHA Seeks Comment on Same-Day ACH Proposal

December 9 – NACHA — The Electronic Payments Association has released a Request for Comment on same-day ACH. The RFC outlines a proposal for new, ubiquitous clearing and settlement options to move virtually any ACH payment faster, expanding upon traditional ACH functionality.

“In today’s environment, everyone wants things faster, including payments,” said Janet O. Estep, president and CEO of NACHA. “Moving forward now signals an immediate, tangible commitment to provide choices for the consumers, businesses and government agencies who want to move money more quickly and efficiently, directly between bank accounts.”

In March 2014, NACHA announced a “phased approach” to implementing new Same Day ACH functionality, and that phased implementation approach is the basis for this Same Day ACH proposal. This approach introduces two new same-day settlement windows, for a total of three ACH Network settlements each day.

In developing the proposal, NACHA engaged an external, expert consulting firm to independently evaluate the industry’s costs, potential use cases and transaction volume for Same Day ACH. More than 200 surveys and in-depth interviews were conducted with financial institutions of all sizes, businesses, and core banking processors to get detailed information on anticipated volumes, opportunities and costs.

The research outlined how same-day ACH payments would be generated from 10 primary use cases, and 63 sub-use cases, including same-day payrolls, expedited bill payments, business-to-business (B2B) payments, and account-to-account (A2A) transfers. The majority of same-day ACH payments are expected to enhance existing ACH applications, giving consumers and businesses the choice of speed.

“Same-day ACH serves a variety of end-user needs,” said Estep. “It creates options for both credit and debit payments, and also supports existing capabilities of the ACH Network to send significant information with the payments.”

Under NACHA’s proposal, all Receiving Depository Financial Institutions (RDFIs) will be mandated to receive same-day ACH files and to make funds available to their customers by the end of the work day. These requirements ensure certainty and value for consumers, businesses and government agencies who want the option to send same-day ACH payments to any bank account in the U.S.

To support this ubiquity, the RFC also introduces an interbank fee as a mechanism for RDFIs to recover the implementation and ongoing costs necessary to enable Same Day ACH. The fee would be paid to the RDFI, which would be required to implement and support same-day payment receipt, by the Originating Depository Financial Institution (ODFI), which would have the opportunity to support new payment offerings for its customers.

“Being able to move payments faster to every financial institution in the U.S. is critical to creating value for the consumers, businesses and government agencies who move their money via ACH,” said Estep. “Requiring RDFIs to implement Same Day ACH ensures this value, and the use of an interbank fee supports this requirement.”

The proposal also includes a built-in “checks and balances” methodology to measure the effectiveness of the interbank fee at defined intervals, with opportunities to reduce the fee if actual Same Day ACH volume exceeds projections.

“Same-day ACH is an essential step to move payments faster,” remarked Estep. “It creates a solid foundation on which to build innovative services that meet today’s demands and tomorrow’s needs. We look forward to hearing feedback on the proposal and to moving forward with Same Day ACH.”

The RFC is open until Feb. 6,  and NACHA has created a number of resources to support greater industry understanding of the proposal. All ACH stakeholders are encouraged to participate in rulemaking and respond to the RFC. For more information about Same Day ACH or to comment, visit www.nacha.org/same-day-ach.

Stop Fiddling With the Fed

Could Congress do monetary policy and bank regulation better?

By Bill Poquette, Editor-in-Chief

A year ago this month, on Dec. 16, a ceremony at the Federal Reserve marked the centennial of the signing of the Federal Reserve Act. At that point a year-long observance was launched, with frequent references to the centennial and special portals devoted to it on the websites of the Board of Governors and the regional banks.

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