What does Regulation J govern in regards to payment systems?

Regulation J specifically governs the collection of checks and wire transfers through the Federal Reserve Bank. This regulation provides the legal framework for the operational procedures of the Federal Reserve in handling both the electronic and physical movement of payments within the U.S. payment system. It sets forth the responsibilities of banks and other financial institutions, ensuring a smooth and efficient process for the clearing and settlement of these payment methods.

The focus on wire transfers and check collection emphasizes the importance of standardized practices in the banking sector to protect both financial institutions and their customers during these transactions. By regulating this aspect, consumers and businesses can have confidence that their payments will be processed correctly and in a timely manner.

In contrast, the other options do not pertain to the primary focus of Regulation J. The establishment of new banks involves different regulatory frameworks, consumer credit and loans are typically governed by other regulations such as Regulation Z, and electronic contract agreements are not covered under Regulation J, but rather under different legal standards and acts that govern electronic commerce.