FedNow Gets Private Helpers: Bureaucracy's Bold Cross-Border Money Mashup
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 private-sector partners with FedNow’s U.S. system. If you’re involved in FedNow transfers, get ready to comment by June 9, 2026, and watch for new ways to move money faster and smarter!
Analyzed Economic Effects
5 provisions identified: 3 benefits, 2 costs, 0 mixed.
FedNow Can Use Non‑Reserve Intermediaries
The Fed proposes to let FedNow participants use intermediaries other than Reserve Banks (for example, correspondent banks) so a FedNow payment can cover the U.S. domestic leg of a cross-border transfer while a private intermediary handles the international leg. The change is intended to make cross-border payments faster and let private-sector providers build cross-border solutions using the FedNow Service.
Immediate Availability Rule Still Limited
Regulation J's immediate funds-availability requirement would continue to apply only when a beneficiary's bank (not an intermediary) accepts a payment order over the FedNow Service. For example, in an outbound cross-border transfer where an intermediary (not the beneficiary's bank) accepts the payment over FedNow, the beneficiary's bank located outside the United States would not be obliged under Regulation J to make funds available immediately.
Reserve Banks May Rely on Intermediary Routing Numbers
The Board would allow a Reserve Bank receiving a FedNow payment order to rely on a routing number in the order that identifies an intermediary bank (consistent with Article 4A of the Uniform Commercial Code), even if the payment order names a different bank, provided the Reserve Bank is not aware of an inconsistency.
Senders Must Designate Intermediary Banks
A sender may not send a FedNow payment order that requires a Reserve Bank to send payment to a non‑Reserve intermediary bank unless that intermediary is expressly designated in the sender's payment order. Also, a sender may not instruct a Reserve Bank to use a funds-transfer system other than FedNow unless the Reserve Bank agrees in writing.
Applies to Participating Depository Institutions, Including Small Banks
The proposed amendments would apply to all depository institutions that choose to participate in the FedNow Service. The Board notes that, under SBA rules, about 7,040 depository institutions have $850 million or less in assets and would be considered small entities for purposes of the Regulatory Flexibility Act.
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Key Dates
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