Van Hollen, Warren, Pressley, Garcia Introduce Bill to Provide Americans Immediate Access to Money in their Bank Accounts

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 lose billions of dollars each year in overdraft fees, driving consumers to turn to more costly financial products because of our inefficient payments system. By updating the Expedited 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 payments system, FedNow. 

“Americans deserve a banking system that works for them. But when deposited funds aren’t immediately available it costs folks time and money – especially in exorbitant overdraft fees. With this legislation, we’re requiring banks to make the dollars Americans deposit in their accounts available to use immediately. This common-sense bill will help Americans better manage their money and will help pave the way for the Fed’s new faster payments system, FedNow,” said Senator Van Hollen. 

“People living paycheck-to-paycheck shouldn’t have to wait up to five days for a check to clear so that they can pay their rent, cover child care, or pick up groceries,” said Senator Warren. “Our bill would ensure a national, real-time payments system so that families have faster access to the money they earned and don’t have to pay overdraft fees or rely on a shady payday lender to make ends meet.”

“Delayed access to payments is just one example of our unjust, tiered financial system that prioritizes financial institutions over consumers. Working families in the Massachusetts 7th and beyond can’t afford to wait days to have their paychecks cleared,” said Congresswoman Ayanna Pressley. “We should be using every tool available to provide relief for consumers and allowing people to access their money in real-time is one way to do just that. I’m glad the Fed is making progress toward implementing a real-time payments system, something I have consistently called for, and I urge Congress to pass our bill so consumers can begin feeling this relief without delay.”

“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 should not have to pay overdraft fees because their money takes days to appear in their bank accounts. The Federal Reserve has a responsibility to ensure working families are not facing economic hardship from unjust systems. It must modernize and establish a reliable and efficient system to make sure people can access their money in real-time, when they need it most,” said Congressman García.

“This legislation will save working families billions every year. Giving people access to their own money in real-time will result in fewer overdrafts, payday loans, late fees, interest charges. This legislation will make it less expensive to be poor. America’s antiquated payment system is a driver of income inequality,” said Aaron Klein, Senior Fellow and Carliner Chair in Economic Studies at Brookings Institution.   

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