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By Randolph Maxwell, Settlement Services Division

After months of analysis and evaluation, FMS is pleased to announce that on April 2, 2009, U.S. Bank was selected as the Financial Agent for the Collection and Cash Management Modernization’s (CCMM) new Credit Gateway. U.S. Bank is the 6th largest commercial bank in the United States and brings a vast amount of experience in electronic payment processing.

The Financial Agent Selection Process (FASP) was conducted pursuant to FMS’s CCMM enterprise architecture initiative to streamline, modernize, and improve the systems, services and processes supporting Treasury collections and cash management programs.

Current Fedwire and Automated Clearing House (ACH) credit payment processing is fragmented across multiple systems and does not provide a consolidated real time view of detail transaction information. These deficiencies hinder timely payment reconciliation and decision making for forecasting and investments.

The Credit Gateway will be operated through the Financial Agent which will process Government transactions on its infrastructure using its own commercial gateway application. The Gateway will function separately from all collection channels. Though the Gateway will be operated by U.S. Bank, funds will settle directly to one or more accounts by a Federal Reserve Bank. The concept of separating collection channels from settlement mechanisms is a cornerstone of the enterprise architecture for CCMM collections. It represents a fundamental change and is designed to avoid duplication of systems and banks by allowing for one system for Fedwire and ACH credit payments. This approach is designed to avoid duplicate connections to third-party services and applications that are not modular and are, therefore, difficult to maintain and change. This approach should also allow for more flexibility with respect to the selection of financial/fiscal agents without directly disrupting customer federal agencies. As payments are processed in the Gateway, detail transaction information will be sent real time to FMS reporting systems: CA$HLINK II in the interim; and ultimately to the Transaction Reporting System (TRS). Agencies will continue to access their transaction data from FMS reporting systems. The Gateway will also send real time transaction data to the channel applications as needed. Data interfaces from the Gateway to reporting systems and channel applications will utilize the FMS’s XML standard format.

• Improved processing efficiencies and streamlined application support
• Improved cash forecasting and decision-making by providing real time access to collection information.
• Reduced costs through the decommissioning of legacy applications
• Use of the new Gateway to protect the channel programs from proprietary file formats and to make it easier to replace settlement providers when necessary.

The selection of U.S. Bank sets in motion a project that will consist of multiple phases, over the course of two years. Current legacy system payments will be migrated, one at a time, to the new Gateway. The first migration will include the Fedwire Deposit System (FDS) and the Remittance Express (REX) applications. The next migration will include the Federal Reserve Electronic Tax Application (FR-ETA) and electronic lockboxes from the General Lockbox Network (GLN). The final migration will include ACH credit payments associated with the Electronic Federal Tax Payment System (EFTPS). FMS will make every attempt to minimize impacts to agencies and external customers.

For more information on the Credit Gateway, please contact Randolph Maxwell at 202-874-3720.

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