Magazine article American Banker

ABA Task Force Will Study Issues in Payments System

Magazine article American Banker

ABA Task Force Will Study Issues in Payments System

Article excerpt

The American Bankers Association has formed a task force to address what it says are mounting challenges to the banking industry's role in the payments system.

Wayne Abernathy, the ABA's executive director for financial institutions policy and regulatory affairs, said the group will examine a broad range of factors that could be contributing to banks' shrinking share of the payments market. These include increased regulation and competition from nonbanks that offer payments services, such as Wal-Mart Stores Inc. and payday lenders.

The Payments System Task Force will also look at data breaches, such as one disclosed this year by the retailer TJX Cos. Inc. of Framingham, Mass., and the threats they pose to banks.

"These issues have come to us in pieces over the years," Mr. Abernathy said. "It began to be clear that they are different pieces of a whole - the payments system."

The task force, which is set to begin work this month, was formed by ABA chairman Earl McVicker and is chaired by David F. Hickman, the chairman of the $787 million-asset United Bancorp Inc. Tecumseh, Mich., and its lead subsidiary, United Bank and Trust Co.

Mr. McVicker, who is also the chairman and chief executive of the $288 million-asset Central Financial Corp. of Hutchinson, Kan., said that the group will first look for specific of examples of how and why banks might be losing ground in the payments system and that it eventually will issue regulatory, legislative, and policy recommendations. …

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