Van Hollen, Warren, Pressley and Garcia introduce bill to provide Americans with immediate access to money in their bank accounts


September 22, 2022

The legislation will pave the way for the Fed’s new, faster payment service, FedNow

Today, U.S. Senators Chris Van Hollen (D-Md.) and Elizabeth Warren (D-Mass.) and Representatives Ayanna Pressley (D-Mass.) and Jesús “Chuy” García (D-Ill.) introduced their Payments Modernization Act, legislation to make Americans’ funds deposited in their bank accounts immediately available for withdrawal. Right now, Americans are losing billions of dollars each year in overdraft fees, driving consumers to more expensive financial products because of our inefficient payment system. By updating the Accelerated Funds Availability Act and requiring financial institutions to recognize funds in real time, this bill will improve Americans’ access to their money and support the Federal Reserve’s implementation of its real-time payment system, FedNow.

“Americans deserve a banking system that works for them. But when deposited funds are not immediately available, it costs people time and money, especially in exorbitant overdraft fees. With this legislation, we require banks to immediately make available the dollars that Americans deposit in their accounts. This sensible bill will help Americans better manage their money and pave the way for the Fed’s new, faster payment system, FedNow,” said Senator Van Hollen.

“People who live paycheck to paycheck shouldn’t have to wait up to five days for a check to clear so they can pay rent, cover childcare costs or do the grocery store”, said Senator Warren. “Our bill would ensure a national real-time payments system so families have faster access to the money they’ve earned and don’t have to pay overdraft fees or rely on a lender on shady salary to make ends meet.”

“Delayed access to payments is just one example of our unfair, multi-tiered financial system that prioritizes financial institutions over consumers. Working families in 7th Massachusetts and beyond cannot afford to wait days for their paychecks to be cashed,” said Congresswoman Ayanna Pressley. “We should use all the tools available to relieve consumers and allowing people to access their money in real time is one way to do that. I’m glad the Fed is moving toward implementing a real-time payments system, which I’ve always called for, and I urge Congress to pass our bill so consumers can start feeling this relief without delay.

“The working families in my district deserve to know that every penny they earn will be available to them as soon as their paychecks are deposited. Families shouldn’t have to pay overdraft fees because their money takes days to show up. into their bank accounts. The Federal Reserve has a responsibility to ensure that working families do not face economic hardship due to unfair systems. It must modernize and establish a reliable and efficient system to ensure that people can access their money in real time, when they need it most,” said Congressman García.

“This legislation will save working families billions each year. Giving people access to their own money in real time will mean fewer overdrafts, payday loans, late fees and interest charges. Thanks to this legislation, it will be less costly to be poor. America’s antiquated payment system is a driver of income inequality,” said Aaron Klein, senior fellow and holder of the Carliner Chair in Economic Studies at the Brookings Institution.

Lawmakers originally introduced this bill in July 2019 and have since updated it following the Fed’s progress in developing its real-time payments system, FedNow. The text of the bill is available here.

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