Payments Access, Choice, and Governance

Position

• ICBA is a strong advocate for secure, financial institution-centric payments systems, and urges policymakers and regulators to maintain their position that direct access to these systems be limited to federally regulated financial institutions.
• ICBA advocates for comprehensive and consolidated supervision of novel firms entering the financial services landscape and encourages cross-agency collaboration to harmonize and provide more clarity to regulatory frameworks.
• ICBA strongly urges policymakers to ensure a competitive level playing field for the financial services ecosystem.
• ICBA supports both public and private sector payments settlement networks that facilitate competition and that permit financial institutions to select the provider(s) of their choice.
• ICBA supports the industry rules and the payment market infrastructure (PMI) providers that play a role in developing and maintaining payments systems’ access and functionalities. ICBA urges these organizations to ensure that their governance processes enable and foster community bank participation and support transparent, timely, and inclusive rulemaking.

Background

The Payments industry is constantly changing and presenting new opportunities. ICBA continues to support a regulatory regime that does not impede community bank access to payment systems through the imposition of anti-competitive pricing or policies, membership requirements, operating rules, or technological barriers. ICBA opposes any legislative or regulatory changes that would materially or adversely impact the competitive nature of our nation’s payments system.

A secure and well-regulated payments system is essential to all financial institutions and the customers and communities they serve. All traditional U.S. payments systems have restricted direct access exclusively to federally insured financial institutions. New technology has enabled the rapid proliferation of non-bank financial technology (“fintech”) companies that are providing a full suite of banking services but sit outside the regulatory perimeter.

These differences create an unfair advantage for fintechs, while adding risk to the financial system as these providers are not subject to the same safety and soundness, regulatory oversight, and supervisory requirements as banks. These entities should not be provided a competitive advantage through policy preferences. Maintaining a level playing field ensures equitable access, provides options for community banks, and fosters systemic resiliency for the settlement of payments.