Release Date: November 3, 2009
For immediate release
The Federal Reserve Board on Tuesday announced the approval of fee schedules for payment services the Federal Reserve Banks provide to depository institutions (priced services), effective January 4, 2010.
The Reserve Banks project that they will recover 96.8 percent of their priced services costs in 2010. The Reserve Banks expect to recover all of their actual and imputed expenses, and earn a small profit that is below their targeted return on equity. Priced services cost recovery is heavily influenced by the projected under recovery in the check service as it transitions to an end-to-end electronic check processing environment. The Reserve Banks are continuing to take aggressive steps to reduce their check service costs and expect to return to full cost recovery within the next several years. Because an increasing proportion of checks collected through the Reserve Banks will be presented electronically, the effective fees paid to collect checks using the Reserve Banks' Check 21 services are expected to decline, on average, 23 percent. The average fee paid by depository institutions to return a check electronically will rise 7 percent. In addition, the fees for the Reserve Banks' FedACH® service, Fedwire® Funds and National Settlement Services, and Fedwire® Securities Service will increase approximately 14 percent.
The 2010 fee schedule for each of the priced services, except the check service, is included in the attached Federal Register notice. Fee schedules for all priced services are available on the Federal Reserve Banks' financial services website at http://www.frbservices.org/.
In addition, the Board approved the 2010 private-sector adjustment factor (PSAF) for Reserve Bank priced services of $50.2 million. The PSAF is an allowance for income taxes and other imputed expenses that would have to be paid and profits that would have to be earned if the Reserve Banks' priced services were provided by a private business.
The Monetary Control Act of 1980 requires that the Federal Reserve establish fees to recover the costs of providing priced services, including the PSAF, over the long run, to promote competition between the Reserve Banks and private-sector service providers.
The Board's notice is attached.