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Payments System Issues

ABA will actively support legislation and regulation that allow banks to sustain their leadership in the payments system by meeting customer needs and preferences, including use of credit and debit cards, as well as prepaid cards and other innovations. We will emphasize the ineffectiveness and costs of using the payments system as a policing tool. Legislative and regulatory changes to the payments system should improve its value without placing an unfair cost or compliance burden on any of its stakeholders.

Position Statement

ABA believes that regulated depository institutions are the key operators of the payments system and that erosion of the role of banks in the payments system undermines its long-term reliability and security. As non-banks begin to offer payment products, it is imperative that they are subjected to the same requirements as banks are for preserving the integrity of the payments system as well as other regulations and oversight. In addition, the government should not rely on the payment system as a substitute for law enforcement or as a means for addressing societal problems.


The dramatic growth in electronic payments is transforming financial service relationships and product offerings to the point where electronic payments now exceed paper-based transactions in the U.S. payments system. Many non-bank financial service firms are developing products and services that compete directly with those traditionally offered by insured depository institutions. Banks need to preserve their unique role to ensure that individuals and businesses remain confident in the reliability and integrity of the nation's payments system. This does not mean that there is no room for non-bank providers of payments system services. On the contrary, competition is valuable as a source of innovation and for opportunities for cost-effective partnership, provided that standards of system integrity are not compromised.

Innovation and investment are likely to lead to new banking and payment services, and it is imperative that insured depository institutions, regardless of size, have access to such systems on reasonable terms with other competitors in the marketplace. Such access will help ensure that all communities and customers will benefit from these new services and be able to participate in the development of further services beneficial to payments customers.

ABA should take an active role in the development of new rules and the amendment of existing rules governing the ACH Network. ABA will work within the rulemaking structure to promote the role of banks in the ACH Network. ABA will work with NACHA on its efforts to simplify the ACH Network Operating Rules for the benefit of all participants.

ABA also opposes the use of payments systems to address social issues such as Internet gambling. The Association testified in opposition to the Unlawful Internet Gambling Enforcement Act (UIGEA) and its implementing regulation in front of the House Committee on Financial Services on April 2, 2008.  ABA objects to unfocused legislative mandates that expose banks to civil liability and impose compliance and operational burdens on them in ineffective control programs easily circumvented by potential wrongdoers.




 Comment Letters


 Letters to Congress & Regulators


Contact for further information: Nessa Feddis (202) 663-5433 or Steve Kenneally (202) 663-5147.


 ABA Staff Contact

  • Nessa Feddis
    SVP & Deputy Chief Counsel, Center for Regulatory Compliance
    (202) 663-5433
  • Steve Kenneally
    VP, Payments & Cybersecurity Policy
    (202) 663-5147

 Featured Resource

Innovate Not Mandate
Tell Congress to protect the innovation that keeps payments secure and convenient.

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