On September 21, 2017, the DOJ’s Antitrust Division issued a business letter stating that it would not challenge a proposal by The Clearing House Payments Company LLC (“TCH”), a joint venture of 24 U.S. banks, to create and operate a new payment system that will enable the real-time transfer of funds between depository institutions, at any time of the day, on any day of the week.
According to TCH, it claims that it will create and operate the Real Time Payment system (“RTP”) – a new payment rail that will provide for real-time funds transfers between depository institutions – and in turn, RTP will allow depository institutions to enable faster fund transfers for their end-user customers.
According to TCH, RTP will not interfere with the continued use and operation of existing payment rails, including automated clearing house, wire, and check clearing houses. RTP will also incorporate additional features that existing payment rails do not offer, such as enhanced messaging capabilities.
In a letter written by Acting Assistant Attorney General Andrew Finch, the DOJ declared that it does not presently intend to challenge the TCH’s proposed new payment rail because the intent appears to be introduce a new, faster payment rail would benefit consumers and competition. The DOJ believes the RTP could result in procompetitive benefits.
The DOJ issues a business review letter whenever a person concerned about the legality under the antitrust laws of a certain business practice requests a statement from the DOJ about its current enforcement intentions with respect to that business conduct. Given the information provided and representations made to the Antitrust Division, the DOJ is fine with a joint venture between 24 banks as long as it results in procompetitive effects. The business review letter, however, is not a blanket OK because the DOJ reserves the right to challenge the proposed action if the actual operation of the proposed conduct proves to be anticompetitive in the future.