FedNow Payments System Poised to Increase Transaction Speeds

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Credit Union News

Fed Activates FedNow Payments System

The Federal Reserve's real-time payments system, FedNow, is now operational, enabling banks and credit unions to sign up. The system aims to accelerate payments, allowing instant access to funds and faster paycheck processing. It's the most significant upgrade to the U.S. payments system in 50 years. Changes won’t be obvious until more financial institutions sign up to use the service, a move that will take time and openness to change.

Chair of the Federal Reserve, Jerome Powell, said:

NCUA Reassigns Surplus Cash, Finalizes Expulsion Rule

The National Credit Union Administration Board approved a final rule on member expulsion, allowing federal credit unions to expel members for cause with a two-thirds board vote. The rule balances member rights and congressional intent, providing due process rights while addressing concerns over serving violent or disruptive members. Additionally, the NCUA will reprogram $737,000 surplus funds to support cybersecurity positions and assist with field-of-membership and charter-expansion efforts. The changes aim to adapt to evolving financial and market conditions, including cybersecurity threats.

AI & Blockchain

FTX Brings $1B Suit Against Sam Bankman-Fried

Defunct crypto exchange FTX filed a $1 billion lawsuit against its founder Sam Bankman-Fried and other former executives, accusing them of misappropriating funds for luxury condos, speculative investments, and political contributions while committing one of the largest frauds in modern history. The suit alleges fraudulent transfers and improper use of funds while the exchange was insolvent and lacking oversight. Bankman-Fried and others named in the suit have not yet commented.

Artificial Intelligence May “Amplify Bias,” Says Barr

Michael Barr, the Federal Reserve's vice chair of supervision, warned of potential discriminatory consequences of heavy reliance on artificial intelligence, saying that overuse of the data used to train the AI systems may amplify bias or inaccuracies. He also provided updates on the proposed revision of the Community Reinvestment Act and expressed support for initiatives addressing discrimination in appraisals and bias in housing mortgage credit transactions. Barr emphasized the need for banks to adopt sound credit policies and fair lending principles to advance a safer and fairer financial system.

Barr said: