| For immediate release |
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The Federal Reserve today issued a report that summarizes opinions and views it received from a series of payments system forums held around the country earlier this year. The forums were part of the work of the Committee on the Federal Reserve in the Payments Mechanism.
The committee is currently examining the Federal Reserve's future role in the nation's payments system, in light of the rapid and significant changes occurring in the financial services and technology sectors. It was established late last year by Federal Reserve Chairman Alan Greenspan and is composed of Vice Chair Alice M. Rivlin as Committee Chair, Governor Edward W. Kelley, Jr., President William J. McDonough of the Federal Reserve Bank of New York, and President Thomas C. Melzer of the Federal Reserve Bank of St. Louis. In May and June of this year, the committee and the Reserve Banks met with representatives from 450 institutions, including depository institutions of all sizes, clearinghouses and other third-party service providers, consumers, retailers, and academics. Discussions at these meetings focused on five hypothetical scenarios depicting various alternative roles of the Federal Reserve, ranging from exiting the retail payments system to adopting a leadership role in the industry. The report summarizes the views expressed by the forum participants on how the alternative roles of the Federal Reserve would affect the price and accessibility of services as well as the efficiency and integrity of the retail payments system. A large majority of forum participants opposed withdrawal of the Federal Reserve from the check and automated clearinghouse (ACH) services. "While a few large banks and clearinghouses thought the Federal Reserve should exit the check collection and ACH business, the overwhelming majority of forum participants opposed Federal Reserve withdrawal, primarily because of concern about payments system disruptions," the summary said. There was also a general consensus that the Federal Reserve should play a stronger leadership role in improving the efficiency of the check collection system and in leading the industry toward more advanced electronic systems of the future. "Many participants urged the Federal Reserve to collaborate with diverse participants in the retail payments system to share ideas and identify impediments to the transition to a more efficient retail payments system," the summary said. Input from the forums is being used by the committee in preparing its final report and recommendations, which are expected by the end of the year. |