Amendment to Regulation J for FedNow Cross-Border Payment
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This proposed rule allows FedNow participants to use intermediaries, like correspondent banks, for the cross-border parts of payments. It aims to improve the efficiency and speed of international transactions while keeping FedNow for domestic parts. The rule change won't heavily impact compliance for small banks.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Allows use of intermediaries for cross-border payments in FedNow
- Aligns FedNow with Fedwire Funds Service rules
- Ensures funds availability rules are unchanged for beneficiary banks
Obligations
What this law requires
FedNow participants must comply with amended Regulation J section 210.42(a) permitting Reserve Banks to rely on routing numbers identifying intermediary banks in payment orders, consistent with UCC Article 4A
FedNow participants may now designate non-Reserve Bank intermediary banks in payment orders sent to Reserve Banks, as permitted under amended section 210.45(b)
Beneficiary banks accepting payment orders over FedNow Service remain obligated to pay the amount to beneficiaries immediately upon acceptance and credit accounts in accordance with section 4A-405(a) of Article 4A, except when an intermediary bank accepts the order
Reserve Banks, when acting as receiving bank, must apply the proposed amendments to allow reliance on intermediary bank routing numbers specified in payment orders, even if another bank is identified by name
All interested parties must submit comments on the proposed amendments by June 9, 2026, identified by Docket No. R-1891 and RIN 7100-AH23