Fed Reserve Proposes Third-Party Access for FedNow Cross-Border Payments
Published Date: 4/10/2026
Proposed Rule
Summary
The Federal Reserve is updating rules to let FedNow users send money through other helpers, like correspondent banks, not just Reserve Banks. This change aims to make cross-border payments smoother by mixing FedNow for U.S. transfers with private partners for international parts. If you’re involved in FedNow payments, get ready to share your thoughts by June 9, 2026!
Analyzed Economic Effects
5 provisions identified: 2 benefits, 1 costs, 2 mixed.
FedNow Can Use Non‑Reserve Intermediaries
The Federal Reserve proposes to allow FedNow participants to use intermediaries other than Reserve Banks (for example, correspondent banks) to send funds transfers through the FedNow Service. The Board says this change could let participants leverage an intermediary for the international portion of a cross‑border transaction while using FedNow for the U.S. domestic portion.
Immediate Funds Availability Limited to Beneficiary Bank Acceptance
Regulation J would continue to require immediate funds availability only when a beneficiary's bank (not an intermediary) accepts a payment order over the FedNow Service (see Sec. 210.44(b)(1)). For outbound cross‑border transfers where an intermediary bank accepts the FedNow order and the beneficiary's bank is outside the U.S., the foreign beneficiary's bank would not be obliged under Regulation J to make funds available immediately.
Reserve Banks May Rely on Intermediary Routing Numbers
The proposal (amendment to Sec. 210.42(a)) would let a Reserve Bank that receives a payment order rely on the routing number in the order as identifying the intermediary bank, even if the name in the order identifies a different bank, provided the Reserve Bank does not know of an inconsistency. The change is aligned with Article 4A of the Uniform Commercial Code.
Senders Must Designate Non‑Reserve Intermediaries
The Board proposes to amend Sec. 210.45(b) so that a sender must designate any intermediary bank (other than a Federal Reserve Bank) in the sender's payment order for the FedNow Service. A sender also may not instruct a Reserve Bank to use a different funds‑transfer system unless the Reserve Bank agrees in writing.
Proposal Applies to All Depository Institutions; Small Banks Noted
The Board says the proposed amendments would apply to all depository institutions that choose to use the Reserve Banks' FedNow Service and notes that about 7,040 depository institutions have $850 million or less in assets and are considered small entities for purposes of the Regulatory Flexibility Act. The Board also states it does not believe the proposal will have a significant economic impact on a substantial number of small entities and that there are no new reporting or recordkeeping requirements.
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