Fed updates Payment System Risk policy

The Federal Reserve Board published [84 FR 12049 4/1/19], changes to part II of the Federal Reserve Policy on Payment System Risk related to procedures for determining the net debit cap and maximum daylight overdraft capacity of a U.S. branch or agency of a foreign banking organization (FBO). The changes remove references to the Strength of Support Assessment ranking; remove references to FBOs' financial holding company status; and adopt alternative methods for determining an FBO's eligibility for a positive net debit cap, the size of its net debit cap, and its eligibility to request a streamlined procedure to obtain maximum daylight overdraft capacity. The changes are effective April 1, 2020.

UPDATE: The Federal Reserve Board announced March 24, 2020, an implementation delay to October 1, 2020, to allow foreign banking organizations and the Federal Reserve Banks to focus on heightened priorities [surrounding the COVID-19 pandemic] rather than establishing new arrangements for accessing intraday credit. See the Board's Federal Register notice.