TCH supports the efforts of the Federal Reserve Board of Governors’ (Board) to expand access to collateralized intraday credit from the Reserve Banks and to clarify eligibility standards for accessing uncollateralized intraday credit from Reserve Banks.  TCH also supports the incorporation of the Federal Reserve Policy on Overnight Overdrafts into the Payment System Risk Policy (PSR). However, TCH believes there are three issues that deserve more consideration from the Board before final changes are implemented.

1. New definition of “business day.” While TCH understands the need to add a new definition of “business day” to accommodate FedNow, more analysis is needed as to the impact of choosing a definition based on the close of the Fedwire Funds Service rather than a calendar day, which is used by currently operating 24/7 services, like the RTP network.
2. Settlement Correspondents. The proposed modifications to the PSR Policy may not sufficiently account for the use of settlement correspondents in connection with FedNow, especially where such settlement correspondents are not also FedNow participants. 
3. Competitive Impact Analysis. TCH believes that the competitive impact analysis is incomplete and fails to adequately consider the potential competitive impact of the proposed changes on private sector competitors to FedNow.

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