Welcome to the July 2024 Executive Summary. In our lead story, the Federal Reserve marks its first anniversary since launching FedNow on July 20, 2023. Additionally, the Federal Reserve Board announced it would extend the comment period to September 6, 2024, on its proposal to expand the operating days of the Federal Reserve Banks' two large-value payments services, Fedwire® Funds Service and the National Settlement Service (NSS), to include weekends and holidays. Also happening at the Fed, the Federal Reserve Bank of Atlanta named Cheryl Venable Chief Operating Officer and First Vice President, effective August 1, 2024.
In other news, Nacha released ACH Operations Bulletin #1-2024, detailing changes to upcoming rules effective dates. The Bulletin extends the effective date for the recently adopted rule requiring an RDFI to notify the ODFI of the status of a request for return within 10 banking days by six months to April 1, 2025. Additionally, two upcoming risk rules are set to take effect on Friday, June 19, 2026. Since this is a federal holiday, the practical effective date for these two rules will be Monday, June 22, 2026.
Nacha also announced the release of its Elder Financial Exploitation Awareness Financial Institution Checklist, designed to help banks and credit unions assist customers targeted by fraudsters.
Furthermore, Fiserv announced that former JPMorgan executive Takis Georgakopoulos will join Fiserv as a Senior Advisor, Executive Vice President, and member of the Management Committee, effective September 3, 2024.
Also, registration is now open for NEACH’s Future of Payments Symposium, which will be held September 15-16 at the Hotel Viking in Newport, RI. Join us as we discuss the future state of payments and strategize how your organization could position itself for the future.
Read on to learn more.
Top Headlines
FedNow Marks First Anniversary
As FedNow nears its one-year mark, demand for instant payments continues to climb, with close to 800 financial institutions participating in the Service. Many of these participants are “receive only.” But recently, the Federal Reserve has begun highlighting the benefits of sending transactions and offers tips on how financial institutions can take a measured approach to enabling this feature while mitigating risk.
Financial institutions could benefit from sending transactions by:
- Gaining operational efficiencies and reducing manual interventions
- Reducing costs associated with processing higher-touch transaction types
- Discovering more revenue-generating opportunities than with receive-only transactions
- Gaining or retaining customers/members seeking this capability
The June 26 post also includes tips to help financial institutions “ease into” sending transactions using the FedNow Service, emphasizing they can maintain control as they adjust strategies early on, including:
- Choosing an initial subset of customers—or your own financial institution to start
- Selecting lower-cost send use cases
- Leveraging existing technical capabilities to mitigate risk
- Collaborating with other financial institutions, service providers, and vendors
To learn more, check out the Fed’s June 26 post.
Fed Extends Comment Period
The Federal Reserve Board announced on June 21 that it would extend the comment period on its proposal to expand the operating days of the Federal Reserve Banks' two large-value payments services, Fedwire® Funds Service and the National Settlement Service (NSS), to include weekends and holidays to September 6, 2024. The Board extended the comment period to allow the public more time to analyze the proposal and prepare their comments. Comments on the proposal were originally due by July 8, 2024.
Currently, the Fedwire Funds Service and the NSS operate Monday through Friday, excluding holidays. Under the proposal, both services would operate every day of the year. The operating hours would remain the same, with the Fedwire Funds Service open 22 hours daily and NSS open 21.5 hours daily.
To read the Federal Register notice, “Expanded Hours for Fedwire Funds Service & National Settlement Service,” click here.
Atlanta Fed Appoints Venable First Vice President
Also happening at the Fed, the Federal Reserve Bank of Atlanta named Cheryl Venable Chief Operating Officer and First Vice President, effective August 1, 2024. Most recently, Venable served as Chief of Payments Operations for Federal Reserve Financial Services and Atlanta Fed Executive Vice President.
"Cheryl is a seasoned and visionary Federal Reserve leader who demonstrates superior business management and operational expertise, high-quality strategic thinking, and exemplary people leadership experience," Claire Lewis Arnold, 2024 chair of the Atlanta Fed board of directors, said in a news release. "I am confident Cheryl's distinguished background will help advance the mission of the Federal Reserve in the years ahead."
As first vice president, Venable will be a member of the Discount Committee, which reviews District discount window lending and serves as a backup to the Atlanta Fed president in executing their monetary policy responsibilities. She succeeds André T. Anderson, retiring on July 31, 2024, after more than 40 years of service to the bank.
Federal Reserve Board Releases Results of Annual Bank Stress Test
Finally, “The results of the Federal Reserve Board's annual bank stress test showed that while large banks would endure greater losses than last year's test, they are well positioned to weather a severe recession and stay above minimum capital requirements,” according to a June 26 news release. “Additionally, the Board published aggregate results from its first exploratory analysis, which will not affect bank capital requirements.”
"This year's stress test shows that large banks have sufficient capital to withstand a highly stressful scenario and meet their minimum capital ratios," Vice Chair for Supervision Michael S. Barr said in the release. "While the severity of this year's stress test is similar to last year's, the test resulted in higher losses because bank balance sheets are somewhat riskier and expenses are higher. The goal of our test is to help ensure that banks have enough capital to absorb losses in a highly stressful scenario. This test shows that they do."
The Board's stress test helps ensure that large banks can support the economy during downturns. This test assesses the resilience of these banks by estimating their capital levels, losses, revenue, and expenses under a hypothetical recession and financial market shock, using data from the end of the previous year. The stress test results inform each bank's capital requirements, ensuring they could withstand a severe recession and financial market shock.
To read the 2024 Federal Reserve Stress Test Results, click here.
Nacha
ACH Operations Bulletin #1-2024: Changes to Upcoming Rules Effective Dates
The effective date of recently adopted rules language requiring an RDFI to notify the ODFI of the status of a request for return within 10 banking days has been extended by six months to April 1, 2025.
In addition, two upcoming risk management were recently approved, with Friday, June 19, 2026, as the effective date. As this is a federal holiday, the practical effective date for these two rules will be the next banking day – Monday, June 22, 2026:
- Fraud Monitoring by Originators, Third-Party Service Providers/Third-Party Senders and ODFI (Phase Two)
- ACH credit monitoring by RDFIs (Phase Two)
You can download the operations bulletin here.
Nacha’s Payments Innovation Alliance Releases New Resources to Combat Financial Exploitation of Older Americans
In the U.S., more than five million older adults experienced financial exploitation in 2023, with financial losses totaling $36.5 billion. To address this widespread issue, Nacha’s Payments Innovation Alliance’s Consumer Financial Exploitation Project Team developed an infographic providing key statistics on the prevalence of elder financial exploitation, according to a Nacha news release. Additionally, they have created an Elder Financial Exploitation Awareness Financial Institution Checklist designed to help banks and credit unions assist customers targeted by fraudsters.
"Financial exploitation of older adults is a growing concern that demands our attention," Consumer Financial Exploitation Project Team Co-Leader Mary Gilmeister, AAP, NCP, President & CEO, Macha, said in the release. "By equipping financial institutions with these resources, we aim to strengthen their ability to safeguard their account holders and provide critical support to those affected by fraud."
To learn more about elder financial exploitation prevention initiatives, visit nacha.org/consumer-financial-project-team. To learn more about the Payments Innovation Alliance, including how to join, visit https://www.nacha.org/payments-innovation-alliance.
Miscellaneous
Fiserv Hires Former JPMorgan Executive
Fiserv announced on June 20 that former JPMorgan executive Takis Georgakopoulos will join Fiserv as a Senior Advisor, Executive Vice President, and a member of the Management Committee, effective September 3, 2024, according to a news release.
Georgakopoulos will work closely with the Fiserv executive team to drive positive client outcomes and deliver best-in-class technology across the enterprise. Most recently, Georgakopoulos served as Global Head of Payments at J.P. Morgan, overseeing all aspects of the business, including technology, product, sales, and operations. Prior to J.P. Morgan, Georgakopoulos was a partner at McKinsey & Company in New York, where he advised major banks and asset managers and helped lead McKinsey's Asset Management practice.
“We are pleased to welcome Takis to the Fiserv team,” Frank Bisignano, Chairman, President, and Chief Executive Officer of Fiserv, said in the release. “Takis’s extensive payments and leadership experience and operational expertise will be an outstanding addition to our strong team as we continue to focus on creating value for our clients while investing in our products, services, and people.”
NEACH
Registration for NEACH’s Future of Payments Symposium is now open. The event will be held in Newport, RI, at the Hotel Viking on September 15 and 16. It will kick off on Sunday, September 15, with a fireside chat reception and mixology lesson. Join us for cocktails and good conversation. Event speakers, NEACH President & CEO Sean Carter, board members, and NEACH staff will come together to discuss the future state of payments and strategize how organizations should position themselves for the future.
On Monday, September 16, enjoy a one-track program featuring speakers addressing generational changes and needs, adapting workforces, government movements, new technologies, and more. This program ensures all attendees can hear from our esteemed speaker lineup. Come prepared to ask questions, network, and engage with other professionals eager to drive their organizations forward in this evolving environment.
We are excited to have you attend our in-person 2024 Future of Payments Symposium!
For more information and to register, click here.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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