July 24, 2019
Reps. Pressley, Garcia, Senators Warren, Van Hollen Introduce Faster Payments Legislation
WASHINGTON – Today, Congresswoman Ayanna Pressley (D-MA), Senators Chris Van Hollen (D-MD) and Elizabeth Warren (D-MA) and Congressman Jesús “Chuy” García (D-IL) introduced the Payment Modernization Act of 2019. Every year, hardworking Americans lose billions of dollars in overdraft fees, driving consumers to turn to more costly financial products because of our inefficient payments system. The Payment Modernization Act of 2019 reinforces the Federal Reserve’s existing authority to build a real-time payments system and requires the Fed to implement its own process.
“Thousands of people in the Massachusetts 7th live paycheck to paycheck and cannot afford to wait days for their checks to clear,” said Congresswoman Pressley. “The Federal Reserve Bank has a responsibility to respond to the needs of the American public, such as establishing an inclusive and faster payments system. Our bill, the Payment Modernization Act of 2019, will ensure that the Federal Reserve speeds up the process of clearing payments so that all hardworking Americans can access and move their money quickly, safely and securely 24/7/365.”
“For far too long, consumers and small businesses have unfairly shouldered the costs of our slow payments system – despite the fact that we have the technology to update it and a clear and urgent need to do so. I’ve pushed the Federal Reserve to develop a system that has the necessary guardrails, but progress there has been too slow,” said Senator Van Hollen. “Every day that passes without a better payments system in place puts the United States farther behind other major economies, and millions of working Americans — especially those living paycheck to paycheck — are paying the price. That’s why I’m teaming up with my colleagues to introduce this bicameral legislation, which will ensure that the Fed acts without delay to develop a fast, efficient, equitable, and fair payments system”
“People living paycheck-to-paycheck shouldn’t have to wait up to five days for a check to clear so that they can pay their rent, cover child care, or pick up groceries,” said Senator Warren. “Our bill would create a national, real-time payments system so that families have faster access to the money they earned and don’t have to pay overdraft fees or rely on a shady payday lender to make ends meet.”
“Being poor is too expensive in America,” said Congressman García. “People living paycheck to paycheck shouldn’t be charged overdraft fees simply because their bills are due sooner than their paycheck is deposited into their account. We can’t rely on big banks or tech monopolies like Facebook to look out for hard working families. Instead, the Federal Reserve should modernize and establish a reliable, efficient system using recommendations from its own task force, and that’s what this bill does.”
Earlier this month, Congresswoman Pressley, a member of the House Financial Services Committee, held Federal Reserve Chairman Jerome Powell accountable for the Federal Reserve’s slow-walking implementation of a real time payments system. During the line of questions, Congresswoman Pressley reaffirmed that a faster payments system is a public good, if not a right.
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