EXECUTIVE ORDER 14067, FED NOW

Executive Order 14067, signed by President Biden in February 2021, proclaims that the aim is to promote racial equity and combat discrimination in the United States of America (U.S.A). Despite its claims to the general public, the order has been criticized for its potential to worsen financial insecurities, infringe upon privacy data, and exacerbate existing inequities. The potential hypocrisy of the order is rooted in the history of Afrakan exploitation in the United States. The legacy of enslavement has contributed to persistent economic disparities between Afrakans in America and other groups in the United States. The wealth gap between 'white' and 'black' households, for example, has persisted for decades, with Afrakans in America being disproportionately represented among those living in systemic poverty. While the order acknowledges the impact of systemic racism, it fails to address the root causes of economic disparities, including the legacy of enslavement, exploitation and ongoing discriminatory financial practices.

Furthermore, the order's provisions for the creation of a database to track demographic data, including information on credit scores, debt, and other financial information, have the potential to worsen financial insecurities disproportionally for certain groups. This information could be used to target certain groups with predatory lending practices or other forms of financial exploitation. While this information may be used to address systemic discrimination and financial inequities, it also raises concerns about privacy violations and potential misuse of data by government agencies. The collection and transmission of personal identifying information and financial transaction data may infringe upon individuals' privacy rights and inhibit their ability to travel freely or spend their expenses how they see fit. The order's emphasis on data collection also raises concerns about privacy violations and potential misuse of data by government agencies. The lack of data privacy is a major concern when it comes to the implementation of Executive Order 14067 and FEDNOW. These initiatives have the potential to significantly infringe upon individuals' privacy rights, limiting their ability to exercise basic freedoms and pursue happiness.

Similarly, the implementation of FEDNOW, a real-time payment system developed by the Federal Reserve, also raises concerns about data privacy.

The use of electronic fund transfers requires the transmission and storage of sensitive financial data, including personal identifying information and transaction details. This information could potentially be vulnerable to hacking, cyber-attacks, and other forms of unauthorized access.

The real-time nature of the system may also lead to increased instances of fraudulent transactions, money laundering, and other financial crimes, further inhibiting individuals' ability to pursue their financial goals and aspirations. Financial data, in particular, is highly sensitive and valuable, and its unauthorized use or disclosure can limit individuals' ability to travel freely or spend their expenses how they see fit. It can also limit their access to credit or financial services, employment opportunities, or essential goods and services, perpetuating economic inequalities and limiting their overall well-being.

The implementation of FedNow and Executive Order 14067, which includes provisions for the creation of a database to track demographic data, have increased concerns about data mining and its potential implications.

Data mining refers to the process of analyzing large sets of data to identify patterns, trends, and relationships, with the goal of making data-driven decisions.

While data mining can have benefits in terms of identifying areas of systemic discrimination and financial inequities, it also raises concerns about privacy violations and potential misuse of data by government agencies. The collection and transmission of personal identifying information and financial transaction data through initiatives like FedNow and Executive Order 14067 can potentially infringe upon individuals' privacy rights, limiting their ability to exercise basic freedoms and pursue happiness.

Moreover, the use of data mining can and will exacerbate existing economic inequalities and perpetuate discriminatory financial practices. Financial institutions may use data mining techniques to identify certain groups as higher risk or less creditworthy, leading to restricted access to credit or financial services. This can limit individuals' ability to pursue their financial goals and aspirations, further contributing to economic disparities.

Furthermore, the use of data mining can be used as weapon in economic warfare to continue the disparagement of groups of people based of color, race, religion, creed, sex, etc, such as the misidentification of individuals or the overgeneralization of demographic groups. This will lead to a surge of inaccurate data and discriminatory practices.

Moreover, the order's focus on financial inclusion may be hypocritical as well, given that the current financial system has been built on systemic discrimination and exploitation. The United States has a long history of discriminatory financial practices, including redlining, which refers to the systematic denial of financial services to certain neighborhoods, particularly those with high percentages of Afrakans that are American residents. Redlining has been shown to contribute to a range of negative outcomes, including lower property values and limited access to credit and loans.

Red lining still exists today, as it is observed that affluent Afrakans in particular county's such as Prince George's County will have little to no equity on their homes.

Critics argue that addressing financial inequities and inclusion requires more than just data collection and executive orders. Instead, it requires a fundamental restructuring of the financial system to ensure that all individuals and communities have access to equal opportunities for wealth creation and financial security. This would require addressing the root causes of economic disparities, including the legacy of enslavement, its involvement in the stock market and ongoing discriminatory financial practices.

What is FEDNOW?

FEDNOW is a real-time payment system developed by the Federal Reserve that allows for immediate electronic fund transfers between financial institutions. The system operates 24/7, 365 days a year, and is intended to provide faster, more secure, and efficient payment services to consumers and businesses. While FEDNOW offers benefits in terms of speed and convenience, its implementation will have legal implications. The use of electronic fund transfers requires the transmission and storage of sensitive financial data, including personal identifying information and transaction details. This information could potentially be vulnerable to hacking, cyber-attacks, and other forms of unauthorized access. Additionally, FEDNOW may create additional legal breaches related to financial transactions. The real-time nature of the system may lead to increased instances of fraudulent transactions, money laundering, and other financial crimes. This could lead to potential legal disputes between financial institutions and their customers, as well as regulatory agencies. FEDNOW may also have negative implications for consumers and businesses. The system may lead to an increase in fees for transactions, as financial institutions may pass on the costs of implementing and maintaining the system to their customers. This could lead to an exacerbation of existing economic inequalities, particularly for those who are already financially vulnerable.

Apprehensions have been raised about the potential impact of FEDNOW on data privacy. The collection and transmission of personal identifying information and financial transaction data could potentially infringe upon individuals' privacy rights. This could be particularly concerning given the prevalence of data breaches and cyber-attacks in recent years, which have exposed sensitive personal information to unauthorized third parties. The real-time nature of the system may create additional legal and financial risks, and the collection and transmission of personal identifying information and financial transaction data may infringe upon individuals' rights, securities and freedoms. As such, the implementation of FEDNOW must be accompanied by appropriate measures to ensure data privacy and protect against potential legal and financial risks.

Are you excited about FEDNOW?

• Yes, why not.
• No.
• I'm unsure. I should check out your resource list.

References:

1. Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, President of the United States, Joe Biden, February 2, 2021.

2. "The Color of Wealth in America," Institute for Policy Studies, March 2018.

3. "Redlining: Still a Thing," The New York Times, April 27, 2018.

4. "The Racial Wealth Gap: Addressing America's Most Pressing Epidemic," The Roosevelt Institute, September 2020.

5. "The Wealth Gap: Why Redistributing Wealth Will Not Close the Racial Wealth Gap," The Brookings Institution, June 29, 2020.

6. Taub, A. (2021). The Biden Administration's Hypocritical Plan for Racial Equity. The New Yorker.

7. Donnelly, L. (2021). Biden’s Racial Equity Plan Draws Concerns About Privacy, Financial Security. The Center Square.

8. "FedNow Service: Frequently Asked Questions," Federal Reserve, accessed March 22, 2023.

9. "The Pros and Cons of Real-Time Payments," Investopedia, February 24, 2022.

10. "Privacy and Security Issues in Mobile Payment Systems," The Journal of Internet Banking and Commerce, April 2017.

11. "Cybersecurity Risks Associated with Faster Payments," The Clearing House, September 2018.

12. "How Real-Time Payments Will Affect You," The Motley Fool, October 26, 2021.

13. "The Pros and Cons of the FedNow Service," The Balance, October 27, 2021.

14. Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, President of the United States, Joe Biden, February 2, 2021.

15. "FedNow Service: Frequently Asked Questions," Federal Reserve, accessed March 22, 2023.

16. "Privacy and Security Issues in Mobile Payment Systems," The Journal of Internet Banking and Commerce, April 2017.

17. "The Pros and Cons of Real-Time Payments," Investopedia, February 24, 2022.

18. "The Importance of Data Privacy and Protection," Forbes, November 27, 2020.

19. "The Consequences of Poor Data Privacy," Forbes, September 25, 2019.

20. "Financial Privacy and Consumer Protection in the Digital Age," U.S. Senate Committee on Banking, Housing, and Urban Affairs, May 15, 2019.

21. Joseph R. Biden, Press Release - President Biden's Economic Plan is Working Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/350496