Recommendation 3: Assess the payments regulatory landscape and recommend changes to the regulatory framework.
The Faster Payments Task Force asks the Federal Reserve to initiate an effort with relevant regulators to evaluate current laws with respect to faster payments, clarify the applicability of and make appropriate changes to regulations, and promulgate new regulations as needed.
Detail
The scope of this evaluation should extend to whether existing regulations (in their current form) for other payment systems would cover faster payments solutions as they come to market. As discussed in the task force’s Effectiveness Criteria “Legal Framework” (L.1), relevant regulations include Office of Foreign Assets Control (OFAC), Anti Money Laundering (AML), Bank Secrecy Act (BSA), the Unlawful Internet Gambling Enforcement Act (UIGEA; Regulation GG), Federal consumer protection regulations (such as Regulation E and Regulation Z), Regulation II, Regulation CC, and Federal and State Money Service Businesses (MSB) laws.
This effort should also be ongoing so as to ensure that regulations are flexible to the evolving design of faster payments and the evolving security technologies and threats. Therefore, the scope of this recommendation also extends to research and analysis of a range of potential emerging technologies that may be used for faster payments solutions.
Steps to advance this recommendation
The task force recognizes that work needs to commence on this recommendation as soon as possible upon publication of this Final Report and this effort needs to be driven by payment stakeholders providing insight on where there is most need for change. Accordingly, the task force asks the Federal Reserve to facilitate the formation of an informal regulatory priorities work group that would commence work on identifying and prioritizing areas of laws and regulations where there is most need for change. Once the governance framework is established, this work could be passed on to a group within that framework to take over formal responsibility for this recommendation and to engage with relevant regulators to drive this recommendation forward.
Who
The informal regulatory priorities work group will commence work on identifying and prioritizing the areas where there is the most need for change. The task force asks the Federal Reserve to facilitate the formation of this informal work group. Once a governance framework is established, this recommendation would become a formal responsibility of a group under that framework and that group will have responsibility to engage with relevant regulators (see Recommendation 1).
Timing
The task force recommends the informal regulatory priorities work group be formed as soon as possible upon publication of this Final Report. Once the governance framework is established, the task force recommends that a group under that framework will engage with relevant regulators on priority regulatory concerns from the perspective of payment stakeholders. The task force intends that the evaluation be ongoing through collaborative engagement between the group within the governance framework and the regulators.