Payments Modernization Act of 2023

To amend the Expedited Funds Availability Act to require that funds deposited be available for withdrawal in real-time, and for other purposes. 1. Short title This Act may be cited as the Payments Modernization Act of 2023 2. Findings and purposes (a) Findings Congress finds the following: (1) Families in the United States spend billions of dollars in overdraft fees in part because they are waiting for checks to clear over a weekend or holiday. (2) The inefficient payment system in the United States drives families, especially those living paycheck to paycheck, to use high-cost financial services to access funds more rapidly. (3) A faster payment system would provide people of the United States immediate access to funds and relief for those who overdraw their accounts because their deposits are not available in real-time, helping families potentially save billions of dollars each year. (4) The Board of Governors of the Federal Reserve System has created FedNow, an instant payment infrastructure that allows participants to send and receive funds in real time. (5) Financial services providers have a duty to make payments available as soon as it is reasonably possible. (b) Purposes The purposes of this Act are— (1) to ensure that the United States has a safe, fast, efficient, equitable, and fair payment system; and (2) to clarify that financial institutions shall prioritize efficient payments, except in cases in which fraudulent activity is suspected. 3. Definition In this Act, the term real-time 12 U.S.C. 4001 4. Requirement that funds deposited be available for withdrawal in real-time (a) Definitions (1) In general Section 602 of the Expedited Funds Availability Act ( 12 U.S.C. 4001 (A) by redesignating paragraphs (20) through (25) as paragraphs (21) through (26), respectively; and (B) by inserting after paragraph (19) the following: (20) Real-time The term real-time (A) means any time; and (B) includes a Saturday, Sunday, and a legal holiday. . (2) Technical and conforming amendment Section 3 of the Check Clearing for the 21st Century Act ( 12 U.S.C. 5002(2)(D)(iv) section 602(24) section 602(25) (b) Expedited funds availability schedules Section 603 of the Expedited Funds Availability Act ( 12 U.S.C. 4002 (1) in subsection (a)— (A) in the subsection heading, by striking Next Business Day Real-time (B) in paragraph (1)— (i) in the matter preceding subparagraph (A), by striking Except as provided in subsection (e) and in section 604, in In (ii) in the matter following subparagraph (B) by striking not later than the business day after the business day on which in real-time when (C) in paragraph (2), in the matter preceding subparagraph (A), by striking not later than the business day after the business day on which in real-time after (2) by striking subsection (b) and inserting the following: (b) Permanent Schedule Funds deposited in an account at a depository institution by a check drawn on a local or nonlocal originating depository institution shall be available for withdrawal in real-time. ; (3) by striking subsections (c) and (d); (4) by redesignating subsections (e) and (f) as subsections (c) and (d), respectively; (5) in subsection (c), as redesignated by paragraph (4)— (A) in paragraph (1)— (i) in subparagraph (A)— (I) by striking Not more than 4 business days shall intervene between the business day a A (II) by inserting a comma after subparagraph (B) (III) by striking is (IV) by striking and the business day on which funds from such deposit are available for withdrawal shall be available for withdrawal in real-time (ii) in subparagraph (B), in the subparagraph heading, by striking paragraph subparagraph (B) in paragraph (2)— (i) by striking , (b), and (c) and (b) (ii) in the paragraph heading, by striking temporary and permanent schedules permanent schedule (6) in subsection (d)(2), as redesignated by paragraph (4), by striking (c), or (e) or (c) (c) Safeguard exceptions Section 604 of the Expedited Funds Availability Act ( 12 U.S.C. 4003 (1) in subsection (a)— (A) in paragraph (1)— (i) in the paragraph heading by striking Next business day Real-time (ii) in the matter following subparagraph (D) by striking on the business day after the business day on which such cash or funds are deposited or, in the case of a wire transfer, on the business day after the business day on which in real-time after such cash or funds are deposited or, in the case of a wire transfer, in real-time after (B) in paragraph (2)— (i) by striking , 603(c), or paragraphs paragraph (ii) by striking 603(e) 603(c) (C) by striking paragraph (3)(B) and inserting the following: (B) any such funds deposited in excess of such amount shall be available for withdrawal in real-time. ; (2) in subsection (b), in the matter preceding paragraph (1), by striking (c), or (e) or (c) (3) in subsection (c)(1), by striking (c), and (e) and (c) (4) in subsection (d), in the matter preceding paragraph (1), by striking (c), and (e) and (c) (d) Miscellaneous provisions Section 607 of the Expedited Funds Availability Act ( 12 U.S.C. 4006 (1) by striking subsections (a) and (b); and (2) by redesignating subsections (c) through (f) as subsections (a) through (d), respectively. (e) Regulations and reports by Board Section 609 of the Expedited Funds Availability Act ( 12 U.S.C. 4008 (1) in subsection (b)(8), by striking , pursuant to the study under subsection (f) (2) by striking subsections (d) and (f); and (3) by redesignating subsection (e) as subsection (d). (f) GAO study Not later than 90 days after the date of enactment of this Act, the Comptroller General of the United States shall publish a study on the impact of payment delays on disadvantaged communities, including underbanked communities, and future access to and use of financial services by those communities. (g) Federal Reserve report Not later than 90 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System shall submit to Congress a report on the progress of the FedNow instant payment infrastructure, including— (1) any obstacles encountered with respect to institutions opting to utilize FedNow or participants using FedNow; and (2) any challenges anticipated with respect to expanding the utilization of FedNow.

Summary: Payments Modernization Act of 2023This bill requires the Federal Reserve Board to create a real-time payment system that allows funds to be available to any end user immediately at any time, including funds deposited at a depository institution.The Government Accountability Office must publish a study on the impact payment delays have on disadvantaged communities.