(a) Authority and purpose. This subpart provides rules to govern funds transfers through the
FedNow Service, and has been issued pursuant to the Federal Reserve
Act—section 13 (12 U.S.C. 342), paragraph (f) of section 19 (12 U.S.C.
464), paragraph 14 of section 16 (12 U.S.C. 248(o)), and paragraphs
(i) and (j) of section 11 (12 U.S.C. 248(i) and (j))—and other laws
and has the force and effect of federal law. This subpart is not a
funds-transfer system rule as defined in section 4A-501(b) of article
4A.
(b) Scope.
(1) This subpart incorporates the provisions
of article 4A set forth in appendix A of this part. In the event of
an inconsistency between the provisions of the sections of this subpart
and appendix A of this part, the provisions of the sections of this
subpart shall prevail.
(2) Except
as otherwise provided in paragraphs (b)(3) and (4) of this section,
this subpart, including article 4A as incorporated herein and operating
circulars of the Federal Reserve Banks issued in accordance with paragraph
(c) of this section, governs the rights and obligations of the following
parties with respect to the FedNow Service:
(i) Federal Reserve Banks that send
or receive payment orders;
(ii)
senders that send payment orders directly to a Federal Reserve Bank;
(iii) receiving banks that receive
payment orders directly from a Federal Reserve Bank;
(iv) beneficiaries that receive payment
for payment orders by means of credit to the beneficiary’s settlement
account; and
(v) other parties
to a funds transfer any part of which is carried out through the FedNow
Service to the same extent as if this subpart were considered a funds-transfer
system rule under article 4A.
(3) A Federal Reserve Bank that is not
the sender’s Federal Reserve Bank, receiving bank’s Federal Reserve
Bank, or beneficiary’s Federal Reserve Bank is not a party to the
funds transfer for purposes of this subpart and article 4A.
(4) This subpart governs a funds transfer
that is sent through the FedNow Service, even if a portion of the
funds transfer is governed by the Electronic Fund Transfer Act, but
in the event of an inconsistency between the provisions this subpart
and the Electronic Fund Transfer Act, the Electronic Fund Transfer Act shall
prevail to the extent of the inconsistency.
(c) Operating circulars. Each Federal Reserve
Bank shall issue an operating circular consistent with this subpart
that governs the details of its funds-transfer operations in connection
with the FedNow Service and other matters it deems appropriate. Among
other things, the operating circular may: set cut-off times and funds-transfer
business days; address security procedures offered by the Federal
Reserve Banks to verify the authenticity of a payment order; specify
format and media requirements for payment orders; specify the time
and method of receipt, execution, and acceptance of a payment order
and settlement of a Federal Reserve Bank’s payment obligation for
purposes of article 4A; prescribe time limits for the processing of
payment orders; specify service terms governing ancillary features
of the FedNow Service; provide for the acceptance of documents in
electronic form to the extent any provision in article 4A requires
an agreement or other document to be in writing; identify messages
that are not payment orders; and impose charges for funds-transfer
services.
(d) Government senders,
receiving banks, and beneficiaries. Except as otherwise expressly
provided by the statutes of the United States, the parties specified
in paragraphs (b)(2)(ii) through (v) of this section include a department,
agency, instrumentality, independent establishment, or office of the
United States, or a wholly-owned or controlled government corporation.
(e) Financial messaging standards. Financial messaging standards (e.g., ISO 20022), including the financial
messaging components, elements, technical documentation, tags, and
terminology used to implement those standards, do not confer or connote
legal status or responsibilities. This subpart, including article
4A as incorporated herein, and the operating circulars of the Federal
Reserve Banks issued in accordance with paragraph (c) of this section
govern the rights and obligations of parties to funds transfers sent
through the FedNow Service as provided in paragraph (b) of this section.
To the extent there is any inconsistency between a financial messaging
standard adopted by the Federal Reserve Banks for the FedNow Service
and this subpart, this subpart shall prevail.
