California Lawmakers Propose Bill to Open Fed Payment Rails to Nonbanks

California lawmakers Reps. Sam Liccardo and Young Kim have introduced the Payments Access and Consumer Efficiency Act, or PACE Act, aiming to give nonbank payment companies direct access to Federal Reserve payment systems.

The legislation would create a federal supervisory framework for nonbank payment service providers, administered by the Office of the Comptroller of the Currency. This would allow qualifying firms to participate in Fedwire settlement system, FedNow instant payments service, and FedACH payment processing network.

Currently, nonbank payment companies must hold separate money transmitter licenses in each jurisdiction, with some managing up to 40 state licenses simultaneously. The PACE Act would replace this structure with a single federal registration pathway for qualifying firms.

The bill's supporters include the Blockchain Association and the Crypto Council for Innovation, which describe it as a measure that would allow regulated nonbank providers to offer faster and cheaper services to American consumers and businesses through direct access to Fed payment rails.