Four financial trade groups earlier this week wrote supporting a Federal Reserve proposal to harmonize Regulation J -- which governs the collection of checks or other items by Federal Reserve banks and funds transfers through Fedwire -- with Regulation CC, which implements the Expedited Funds Availability Act.
The proposal would realign Reg J with recent amendments to Reg CC, which updated the check collection framework to reflect a system that is now largely electronic. It would also clarify that financial messaging standards for Fedwire transfers do not confer or connote legal status or responsibilities with respect to Fedwire funds transfers.
The groups noted that the Fed’s proposal “will help to improve consistency between, and reduce unnecessary duplication within, the two regulations.” However, they urged the Fed to further clarify Reg J to ensure that Federal Reserve banks make the Reg CC electronic check warranties to the same recipients (including the drawer and owner of the check).
The four trade associations that signed the letter are the American Bankers Association, The Clearing House, the Credit Union National Association, and the National Association of Federally-Insured Credit Unions.
Read the letter.
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