DOJ Endorses Interchange Rule that Credit Unions Hate

A fight is brewing between the Biden Administration and credit union trade groups over a Federal Reserve proposal to require financial institutions to give merchants a choice of debit card networks for online transactions and other purchases when consumers do not physically present their debit cards.

The Justice Department this week threw its support behind the Fed’s proposed rule, saying it would enhance competition and save consumers money. Credit union trade groups, on the other hand, said that the proposal would increase compliance costs, while not passing any savings on to consumers.

Federal Reserve Seeking Participants for FedNow Pilot Program

The Federal Reserve is now accepting applications for a pilot test program for its FedNow Service. Financial institutions, including credit unions, are among those eligible to apply, Fed officials said. Once it is implemented, the FedNow service will allow customers to send and receive payments at financial institutions instantly. Credit union trade groups have expressed their support for the program. The pilot program will include three phases: advisory, testing and closed-loop production. Institutions that are not members of the FedNow Community must first enroll by submitting a participant profile form. Organizations that are interested in participating must submit an application

Coin Task Force Issues New Tools to Increase Coin Circulation

A Federal Reserve U.S. Coin Task Force has developed a toolkit for financial institutions and retailers in an effort to push more coins into circulation.

In forming the task force earlier this year, Fed officials said that with many retail businesses where coins are used closed due to the coronavirus crisis, the normal coin circulation network has been disrupted. They said that there is not a shortage of coins, adding that more than $40 billion in coins are in circulation, but many of them are not being used.

Federal Reserve Board Does Not Intend To Reimpose Limits on Savings Withdrawals

The Federal Reserve has no plans to reinstitute a rule that limits consumers to six transactions a month from their savings account.

Last month the Fed released an interim final rule revising so-called “Regulation D,” which imposed the limit. At the time, Fed officials indicated the rule was being loosened because of the coronavirus crisis. Consumers likely have a more urgent need for access to their funds by remote means, the Fed said.