The Federal Reserve Board on April 8 proposed amending Regulation J to allow US banks and credit unions to use intermediary financial institutions when transferring funds through the FedNow Service. Under current rules, a FedNow transfer can include only two US depository institutions. The proposed change would enable participants to route payments through correspondent banks for cross-border transactions.
The Fedwire Funds Service has permitted intermediary-bank routing for decades. The Board approved the proposed rulemaking unanimously on April 7.