Dave Lebryk is the fiscal assistant secretary at the U.S. Department of the Treasury (Off-site). He is responsible for developing policy and overseeing operations of the financial infrastructure of the federal government. This includes responsibility for the federal government’s collections, disbursements, cash management and financing operations.
The Treasury was among the first institutions live on the FedNow Service when it launched in July. We spoke with Dave to discuss how the FedNow Service supports the long-term vision of federal financial management.
Q: Can you describe Treasury’s vision for the future of federal financial management?
A: “Every day, millions of Americans have financial interactions with the federal government. Whether paying taxes, receiving benefits or acquiring information, the public needs to trust the financial operations of their government. We want to provide payment options that meet the needs of the public — our customers. We want to make it as easy as possible to make or receive payments in a way that is convenient to them. The public expects that their customer experience with these transactions will meet or exceed their experience with private sector transactions. This includes providing solutions that are customer-centric — modern, seamless and secure.”
Q: How does the FedNow Service fit into your goals to provide modern financial interactions with the public?
A: “For decades, Treasury has pursued electronic payment options to replace the use of paper checks, given that electronic payment options are safer, faster and less expensive than checks. We’ve been focused on supporting federal agencies and our customers by identifying, incubating and deploying appropriate emerging technologies and capabilities.
“For these reasons, Treasury is pleased to be one of the early adopters of the FedNow Service, just as it was one of the early adopters of the Automated Clearing House (ACH) payment service nearly 50 years ago.”
Q: What does federal usage of instant payments look like today?
A: “The majority of the more than one billion payments Treasury disburses annually are recurring and regularly scheduled payments and will not be immediately impacted by Treasury’s participation in the FedNow Service. This includes Social Security and Supplemental Security Income payments, veterans’ benefits, vendor payments for invoiced services, federal employee salaries and tax refunds. More than 90% of these payments are made electronically today through ACH and other settlement networks. For federal benefit and employee salary payments, the figure is over 98%. We expect this will continue to be the norm for the coming years.
“While most government disbursements are scheduled in advance, Treasury is excited to be a participant in the Federal Reserve System’s rollout of the FedNow Service. We are piloting the use of the FedNow Service for one-time, manually processed disbursements where speed to access funds is particularly important. Treasury currently uses the Fedwire® Funds Service for immediate settlement and same-day ACH settlement windows for these payments. This often includes urgent or unpredictable payments, such as reissued payments resulting from post-payment issues such as non-receipt claims.”
Q: What do you think the future looks like for instant payments in the federal government?
A: “Over time, the FedNow Service will provide an additional option for federal agencies and the public when doing business with the federal government. The FedNow instant payment service enables us to expand access to customer-centric financial management solutions that are modern, seamless and secure.
“We continue to promote the availability of the FedNow Service to our federal agency partners, who will need to make technology and business process changes to take full advantage of instant payments. In the near term, in addition to certain one-time disbursements, we’re looking at how the FedNow Service can be used for some types of revenue collections. This could be especially useful in cases where our customers have a fee or payment due to the government and need instant settlement to pay on time.
“We anticipate Treasury’s adoption to grow gradually as more federal agencies and our customers gain awareness of and access to the service.”
Pioneers of Now represent engaged financial institutions and service providers united by their commitment to early adoption of the FedNow Service (Off-site), which launched in July 2023. This is part of an ongoing series of Pioneers of Now features (Off-site).
