Fetterman Pushes Fed to Speed Up Paychecks

Sen. John Fetterman sent a letter to Federal Reserve Chairman Kevin Warsh last week arguing the Fed is sitting on a decades-old mandate it hasn't bothered to update. Under the 1987 Expedited Funds Availability Act, the Fed is required to shrink the time banks can place holds on deposited checks down to “as short a time as possible.” Right now, Regulation CC still lets banks hold local checks for up to two business days, a rule written before electronic check processing existed.

Fetterman's pitch: only 3% of American workers still get paid by paper check, and modern payment systems can already clear transactions in real time, so there's no good reason working families, retirees, and small business owners are still waiting days for money they've already earned. He also needled the Fed for ignoring a formal petition on the same issue that the CFPB responded to within three months, as required by law.

Whether the Fed acts on any of this is anyone's guess; Washington letters are cheap, and rulemaking is slow. But if you've ever waited two days for a check to clear that a text message would've cleared in two seconds, you know exactly what he's talking about.