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F E D E R A L R E S E R V E B A N K OF D A L L A S
Station K, Dallas, Texas 7 5 2 2 2

Circular No. 84-21
February 1, 1984

TO:

All depository
Reserve District

ATTENTION:

Operations Officer

SUBJECT:

Implementation of revised fees for off-line funds
transfer and net settlement services and request for
public comment on proposed new fees for on-line funds
transfer

SUMMARY:

The Board of Governors of the Federal Reserve System
has announced new fees for off-line funds transfer and
net settlement services to become effective March 1,
1984. Additionally the Board is requesting public
comment on proposed changes to the fee structure for
services that are provided to depository institutions
with on-line connections to the Federal Reserve.

DETAILS:

Attached
is a press release from the Board of
Governors of the Federal Reserve System containing
important information about Federal Reserve on-line
services that are provided to depository institutions
and about the funds transfer service in particular.
The Board of Governors has approved a new fee schedule
for the off-line funds transfer and net settlement
service, which will become effective March 1, 1984.
This new fee schedule is described in detail in the
notice and represents the first change in funds
transfer prices since April 29, 1982.
In addition,
public comment is requested on a proposal to change
the fee structure for services that are provided to
depository institutions with on-line connections to
the Federal Reserve.

institutions

in the Eleventh Federal

As noted in the Board*s press release, concurrent with
the announcement in March 1983 that existing fees for
the funds transfer and net settlement service v/ould
remain unchanged through 1983, it was indicated that
the Federal Reserve would be examining alternatives to

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank: 1-800-442-7140
(intrastatel and 1-800-527-9200 (interstate'!. F o r c a l l s D la c e d lo c a llv . Dlease u s e 651 d I us t h e e x t e n s i o n r e f e r re d to a b o v e .

-

2

-

charging only transaction fees. There are substantial
fixed costs involved
in
operating
a
national
telecommunications network, and these fixed costs do
not vary, at least in the short-run, with changes in
transaction volume.
Moreover, the fixed costs are
incurred to provide a basic level of service to all
institutions, whether they use the capabilities of the
network intensively by making many transfers or only a
few transfers.
Therefore,
it appears reasonable to
establish a fee structure that recognizes, at least to
some extent, the fixed costs of providing on-line
services.
The fee schedule proposed in the Board's memorandum
establishes a set of fixed monthly fees for on-line
institutions by type of connection, i.e., leased line,
dial-up, or computer interface.
This would be a
uniform national fixed fee and would be assessed once
each month for each separately addressable on-line
connection with the Federal Reserve. Only one fixed
fee would be paid per connection, regardless of the
number of services used.
An important feature of the fixed fee schedule is the
associated proposal that the per transaction fee for
the funds transfer service would be reduced at least
from $0.65 to $0.60, concurrent with implementation of
the new schedule.
This means that all depository
institutions would benefit from lower transaction fees
as fewer costs would need to be recovered from the fee
component.
While the proposal calls for an initial
reduction in funds transfer transactions fees only, it
is possible that similar reductions could apply to
other services
in
the
future.
The
proposed
implementation date for the new fee structure is
June 28, 1984.
We believe that the proposed fixed fee structure for
on-line access represents an orderly approach to
offsetting,
in part, the costs of providing the basic
communications network required for such services.
Your comments on the proposal are most welcome, and we
would like to answer any questions you may have.
Interested parties are invited to submit comments to
William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution
Avenue, N.W., Washington, D.C., 20551; or deliver them
to room B-2223 between 8:45 a.m. and 5:15 p.m.
Comments should refer to Docket No. R-0505 and must be
received by March 17, 1984.

-

3

-

ATTACHMENTS:

Board's press release and material as submitted in the
Federal Register

MORE INFORMATION:

Larry C. Ripley, Extension 6118; Jonnie
Miller,
Extension 6290; or Robert Boyanton, Extension 4346

ADDITIONAL COPIES:

Public Affairs Department, Extension 6289

• - n)

—

^

FEDERAL RESERVE press release

For immediate release

January 18, 198

The Federal Reserve Board today published, for public comment, a
proposed revision to the fee structure for the Federal Reserve's wire transfer
of funds service.

The proposal includes a reduction of the basic fee for

originating or receiving a wire transfer of funds from $0.65 to $0.60 per transfer.
At the same time, the Board proposed a fixed monthly fee for all
depository institutions that have an electronic connection with the Federal Reserve.
The fixed monthly fee charges would be:
Type of Connection

Monthly Fees
All Priced Services, Except
Dedicated ACH and Securities
Transfer Connections*/

Computer Interface
Leased Line
Dial Up

Dedicated ACH
Connections^/

$1,400
$
350
$
75

Comment is requested by March 16, 1984.
Revisions to the off-line^/ surcharges for the Reserve Bank's wire transfer
of funds and net settlement services have been made, to become effective March 1.
The new fee schedule is:
Wire Transfer of Funds
Off-Line Origination
Telephone Advice

Net Settlement
$5.50
$3.00

Off-Line Settlement
Telephone Advice

Pending Board action, the basic transfer fee, currently $0.65, will
remain in effect for all on- and off-line funds transfers.
The Board's notices are attached.
(over)

$8.00
$3.00

-

6

-

1/ Approximately 60 on-line connections are used by depository institutions
solely for securities transfers.
No fixed monthly fees will be assessed
at this time for these dedicated connections, pending a review of the fee
structure for securities transfers later this year.
2/ The automated clearing house (ACH) service is priced under an incentive
pricing policy.
The fees proposed for dedicated
ACH connections reflect
a 60 percent recovery rate for the service.
3/ O f f - l i n e i n s t i t u t i o n s do not have an e l e c t r o n i c connect i on with t h e Federal
Reserve and, t h e r e f o r e , must o r i g i n a t e t h e i r t r a n s a c t i o n s and be advised of
t h e i r s e t t l e m e n t by phone.

FEDERAL RESERVE SYSTEM
(Docket No. R-0505)
FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Proposed 1984 Fee Schedules for Wire Transfer and Net

Settlement Services.
SUMMARY:

The Monetary Control Act of 1980

Law 96-221)

requires that schedules of fees be establshed for

Federal Reserve Bank services.
wire

transfer

implemented
1983.

(Title I of Public

of

funds

effective

and

net

April 29,

Revised fee schedules
settlement
1982,

and

services
continued

for

the

were
through

The Board now seeks comment on the following new fee

structure and new prices for these services to be implemented
in 1984:
Monthly Fees

Type of Connection
Computer Interface
Leased Line
Dial Up

All Priced Services, Except
Dedicated ACH and Securities
Transfer Connections!./
$1,400
$
350
$
75

Dedicated ACH
Connections.?/

$840
$210
$ 45

1/
A number of on-line connections are used by depository
institutions solely for securities transfers.
No fixed monthly
fees will be assessed at this time for these dedicated
connections, pending a review of the fee structure for the
securities transfer service later this year.

U

The ACH service is priced under an incentive pricing
policy.
The fees proposed for dedicated ACH connections
reflect a 60-percent recovery rate for the service.

-

In conjunction with

8

-

implementing

fixed monthly

for electronic connections with the Federal Reserve,

fees

it is also

proposed that:
—

the

fee

for

originating

transfer of funds be

or

receiving

a

wire

reduced from $0.65 to $0.60

per transfer; and
—

the fee for originating

a securities

transfer

be

maintained at $3.00 per transfer.
DATE:

Comments must be received by March 17, 1984.

ADDRESS:
may

be

Comments,
mailed

Governors

of

to:
the

Constitution

which should
William

Federal

Avenue,

N.

W.

refer

Wiles,

Reserve

to Docket No.
Secretary,

System,

W. , Washington,

20th
D.

R-0505,

Board

of

Street
20551,

C.

and
or

delivered to room B-2223 between 8:45 a.m. and 5:15 p.m.
Comments received may be inspected in room B-1122 between 8:45
a.m. and 5:15 p.m.,
the

Board's

except as provided in section 261.6(a)

Rules Regarding

Availability

of

Information

of

(12

C.F.R. § 261.6(a)).
FOR FURTHER INFORMATION CONTACT:
Director

(202/452-2231), or Florence M. Young, Program Manager

(202/452-3955),

Division

Gilbert T. Schwartz,
or

Elaine

Division,

Elliott C. McEntee, Associate

M.

Washington, D. C.

Federal

Reserve

Bank

Associate General Counsel

Boutilier,

Board of

of

Attorney

Governors
20551.

of

the

Operations;

(202/452-3625),

(202/452-2418),
Federal

Reserve

Legal
System,

-

SUPPLEMENTARY INFORMATION:
requires
Bank

that

9

-

The Monetary

Control

fee schedules be developed

for

Act

of

1980

Federal Reserve

services based on pricing principles established by the

Board

(12 U.S.C.

§ 248a).

The Board,

in accordance with

the

requirements of the Act, has established fee schedules for the
wire

transfer

current

fee

of

funds

schedule,

and

net

settlement

implemented

on

services.

April 29,

The

1982,

was

retained because estimates of the volume of funds transfers and
the total

costs,

including

would cover the 1983
noted,

at that

the PSAF,

time,

changes

comment

would

1983).

The

appropriate

be

that a comprehensive

were

revenues

of

(48

that

to be

indicate

if

public

March 23,

that

to revise the existing fee structure

fee

that

necessary,

F e d . R e g . 12135,

review

Board

review of the

had been undertaken and

determined

solicited

results

that

costs of providing the service. The

structure for these services
significant

indicated

it

is

for the wire

transfer of funds service in order to recover anticipated costs
for 1984.

Accordingly,

the Board is requesting public comment

on a revised fee structure.
For the period January
costs,

including the

through November,

1983,

PSAF, amounted to $52.0 million and

revenues amounted to

$52.4 million,

resulting

revenue surplus of approximately $400 thousand.

total
total

in a modest net
The volume of

funds transfers originated amounted to 34.7 million during the
eleven month period,
period in 1982.

an increase of

Cost,

volume

and

8 percent over

the same

revenue data for December,

-

1983,

are not yet available.

10

-

However,

it is expected that a

modest net revenue surplus will be realized for the year 1983.
The

total

costs,

including

a 16

percent

PSAF,

of

providing the wire transfer of funds and net settlement service
are projected to be $62.4 million in 1984.

If the current fee

schedule

for

projected

revenues

would

these

services

amount

to

were

$58.9

retained,
million,

resulting

estimated net revenue shortfall of $3.5 million.
order

to match

costs

and

revenues,

the

Board

implement fixed monthly fees and lower basic
on

June

28,

3/
1984.—

As

a

result

of

these

in

proposes

in

to

transaction fees
changes,

service,

an

Therefore,

revenues of about $62.9 million are anticipated
transfer of funds and net settlement

annual

for

1984
the wire

resulting

in a

net revenue surplus of $500,000.
Cost Structure
The Reserve Banks provide electronic services to four
classes

of

users:

(1)

institutions

directly to Federal Reserve

computers,

terminals or micro-computers
Reserve

via

dedicated,

leased

that

are

lines,

with
(2)

computers

institutions

linked
(3)

linked

to

the

using

Federal

institutions

using

terminals or micro-computers that are linked to the

1/

In this connection, the Board has approved, effective
March 1, 1984, an increase in the off-line surcharges for the
wire transfer of funds and net settlement services.
(See
Federal Register notice published simultaneously with this
notice.)

11

-

Federal

Reserve

facilities,
that

via

public

receive

over the telephone or,

The

telephone

lines

or

dial-up

and (4) institutions without electronic connections

initiate and

house

-

("ACH"),

following

funds

and

securities

in the case of the automated clearing

physically
table

transfers of

deliver

indicates

the

and

receive

transactions.

approximate

number

of

electronic links to the Federal Reserve as of December 31, 1983:
Number of Electronic Connections
Type

Number

Computer Interface
Leased Line
Dial-Up
ACH Data Link

100
1,300
2,700
200l/

During 1983, on-line users of the Federal Reserve's electronic
services originated about 98 percent of all funds transfers and
about 99 percent of all securities transfers.
the ACH service,
percent

and

In the case of

on-line institutions originated less than

received

only

10

percent

of

commercial

25

ACH

5/
transactions .—
The on-line

electronic payments

services

offered

to

depository institutions by the Reserve Banks are capital

4/
Unlike other electronic connections, ACH data links are
frequently shared.
Approximately 2,000 depository institutions
are currently served by the 200 data links that are installed.

'kJ On September 23, 1983, a revised fee schedule for the ACH
service was published for public comment.
(48 F.R. 44650)
The
proposal to implement fixed monthly fees for electronic
services will have a minor impact on the proposed ACH fee
schedule since a relatively small percentage of ACH
transactions
are originated and received via on-line
connections.

-

12

-

intensive services and fixed costs are high relative to total
costs.

The

Federal

Reserve

has

intradistrict and interdistrict
invested

in

processing

state-of-the-art
equipment,

and

developed

data

data

is

sophisticated

communications

communications

developing

networks,
and

enhanced

data

automated

systems for each of its electronic payments services.
Certain

elements

of

the

Federal

Reserve's

communications and data processing costs would be
order to offer electronic
connections with
other

costs,

in

data

incurred

in

payments services even if no on-line

the Federal Reserve
particular

the

were

costs

offered.
associated

However,
with

intradistrict communications networks, would not be incurred if
on-line

connections

communications
circuits,

networks

and modems

the Federal
costs

were

of

local

offered.

consist

Intradistrict

primarily

of

used to link depository

Reserve.

the

not

During

1983,

networks

that

the

institutions

it is estimated
were

lines,

allocated

that

to
the

to priced

services amounted to $6 to $7 million.
Depository

institutions

connections with the Federal
more

than

securities

60

percent

transfers

considerable

of

resources

computer-to-computer

Reserve

the

during
to

that

total

1983.

have

originated
number

These

purchase

interfaces,

computer-interface

and

of

and

funds and

institutions
and

Federal

the high

transaction volumes

expend

install
Reserve

devotes considerable time to testing the equipment.
that

received

are processed

staff

To ensure

efficiently,

-

high

speed,

Federal

dedicated

Reserve.

lines

13

-

link

In addition,

these

the

institutions

capacity

of

the

to

the

Federal

Reserve's data processing and data communications equipment is
largely dictated by the volume of transactions

originated and

received by these high volume users.
Institutions using

terminals

or micro-computers

that

are linked via leased lines accounted for nearly 30 percent of
all

funds

software

and

necessary

applications
However,

securities

software

Federal

spread over

to

transfers

interface
is

Reserve

with

capacity

the

by

1983.

many

cases,

the

than

Federal

the

lines

the

Reserve.

support

a relatively broad base because

In

Reserve's

Federal

and

Reserve

Computer

Federal

the

development

carriers serving individual
linked

with

provided

institutions within a Federal
equipment.

during

costs

the majority

District

lines

are

use

leased

from

the

of

same

common

institutions feed into one circuit

Reserve

and,

used

institutions

by

generally,

have

with

less

computer

interfaces.
During

1983,

micro-computers

linked

institutions
via public
for

using

telephone
about

terminals
lines,

8 percent

or

that

dial-up connections,

accounted

transaction volume.

The Federal Reserve provides the necessary

software to support their use of electronic services.

of

is,

total

However,

the lines connecting these institutions to the Federal Reserve
are typically public telephone lines that require institutions
to

dial

the

transactions.

Federal

Reserve

to

originate

or

receive

14

-

In
serving

summary,

individual

the

costs

-

to

the

institutions with

Federal

computer

Reserve

interfaces

of
tend

to be higher than for those with leased-line connections, which
are higher
the

three

than for those with dial-up connections.
classes

of

on-line

institutions

use

the

However,
Federal

Reserve's electronic services with different intensities.

When

fixed costs, such as data communications costs, are spread over
the

high

transaction

institutions,
to be

volumes

processed

by

computer-interface

the per transaction impact of fixed costs tends

lower.

Conversely,

for

lower

volume,

leased-line

or

dial-up institutions, the per transaction impact of fixed costs
tends to be higher.
Alternatives
At present, the fees assessed for the wire transfer of
funds, securities transfer, and the ACH services are generally
based
Basing

on

the

fees

average
on

cost

average

of

a

6/
transaction.—

is

an

processing

processing

costs

appropriate

pricing methodology when a high proportion of total production
costs

are

electronic

variable.
services,

In

the

a high

relative to total costs.

case

of

the

proportion

of

Federal
costs

Reserve's
are

fixed

Thus, some modification to the

Jj/ On September 23, 1983, a revised ACH fee structure was
published for public comment that proposed instituting fixed
deposit and receiver handling fees reflecting fixed costs
associated with these activities.
(48 F.R. 44650)

15

-

-

current fee structures for electronic services could result in
fee structures that more closely resembled the cost structure
of the services.
To achieve this objective,

the following alternatives

were reviewed:
—

assessing

variable

transaction

fees

for

wire

transfers of funds and securities services based on
the type of on-line connection used by a depository
institution;
-- assessing on-line institutions the actual costs of
the lines and modems that are installed to provide
electronic payments services; and
—

assessing

fixed monthly

fees

that would

type of on-line connection and would,
recover

the

cost

of

intradistrict

vary

by

on average,

communications

networks.
Based on the staff study,

the first alternative,

use of variable transaction fees, would result
transaction
institutions
being

fees,
using

assessed

connections,

to

with

the

dial-up

highest

connections

institutions

due to differences

the three classes of on-line

with

being
and

in a range of

assessed
the

the

lowest

to
fees

computer-interface

in transaction

institutions.

volumes

While

among

the use of

variable transaction fees would reflect the costs of providing
electronic payments services more accurately

than the current

fee structures, it still would not fully reflect the fixed cost

-

structure

of

services.
provide

the

Federal

Moreover,

depository

16

-

Reserve's

variable

transaction

institutions

type of connection linking

electronic

an

fees

incentive

them with

the

payments
would

to

also

upgrade

Federal

the

Reserve

in

order to reduce the variable costs they incur in using Federal
Reserve services.
more

costly

facilities

to

Since dedicated leased-line connections are
the

Federal

Reserve

and computer-interface

than leased-line connections,

than

shared

connections

dial-up

are more costly

moves to upgrade connections on

the part of depository institutions would increase rather
reduce

the overall

than

costs of the Federal Reserve's electronic

payments services.
The

alternative

of passing

through

actual line and

modem costs to individual depository institutions would provide
an objective means of assessing
institutions

with

cost-effective,

an

fees.

incentive

on-line

transactions handled.

to

connection
However,

It would also provide
select the

based

on the

most
volume

telephone rates are frequently

based on distance and may vary from region to region,
in disparate

charges

Furthermore,

the

uncertainty
Finally,

AT&T

regarding

determining

institutions

sharing

would be complex.

to

institutions

divestiture
the

the

fees
costs

leased

that

this

within

creates

that

lines

Therefore,

of

or

would

the

same

a great
be

class.

deal of

assessed.

would

be

using

dial-up

approach

resulting

assessed

was

to

networks

regarded

as

unacceptable due to its complexity and the unpredictability of
telephone rates.

-

17

-

The third alternative, assessing fixed monthly fees to
on-line

institutions

that

vary by

type

of

connection,

like

passing through actual line and modem costs, would be based on
clearly

identifiable

structure

that

fixed

reflects

costs

the

and would
that

fact

result
fixed

high

in a fee
costs

are

incurred in providing electronic services.

Setting fees that,

on

intradistrict

average,

would

communications
those

of

depending

under

fixed

connections

upon

the

monthly

would

variability

the

costs

networks would generate

generated

effect

recover

vary

an

second

fees

charged

rates would not occur.

due

comparable
Although

institutions
each

institution's

in fees

revenues

alternative.

on

within

of

with

connection

volume

of

the

on-line

category

transactions,

to differences

Therefore,

to

in telephone

the use of fixed fees would

remove the uncertainty regarding charges that would exist under
the

pass-through

provide

proposal.

incentives

for

This

alternative

depository

also

institutions

cost-effective, on-line connections and, thereby,
reductions

in

the

overall

electronic services.
alternative
costs,

and

costs

Accordingly,

of

the

Federal

this approach.

select

contribute to
Reserve's

the Board believes that this

is the most reasonable basis for
the following proposed

to

should

fee

recovering

structure

fixed

incorporates

-

18

-

Monthly Fees
All Priced Services, Except
Dedicated ACH and Securities
Transfer Connections

Type of Connection
Computer Interface
Leased Line
Dial Up

$1,400
$
350
$
75

Under the Board's proposal,
be assessed

Dedicated ACH
Connections

a fixed monthly fee would

for each separately addressed
a depository

$840
$210
$ 45

connection that

institution

and

the

is

installed

between

Federal

Reserve.

When an institution uses one connection to access the

Federal Reserve for all types of electronic services, one fee
would be assessed based on the type of connection.
a depository

institution uses

for funds transfer services
services,

connection.

would

be

if

a computer-interface connection

and a dial-up connection for ACH

and each connection

institution

However,

assessed

is separately
the

addressable,

monthly

fee

for

the

each

It should be noted that fixed monthly fees would

be assessed to all on-line

institutions— those that use

their

own equipment to interface with the Federal Reserve and those
that lease equipment from the Federal Reserve.
Because the ACH service is priced under
pricing policy,

an incentive

it is proposed that the fixed monthly fees for

communications links used solely for ACH transactions should be
included

under

that

policy.

Specifically,

the

ACH

fees

recently published for public comment were set to recover
percent

of

the

costs

That proposal also

of

providing

commercial

included fixed receiver

ACH

60

services.

handling fees for

-

19

-

both ground and electronic delivery.

If fixed monthly fees for

on-line connections with the Federal Reserve
it is proposed that the receiver
delivery,

if one is adopted,

handling

are

implemented,

fee for electronic

be eliminated

in order

to avoid

double charging users of ACH services.
There
depository
this

institutions

time,

dedicated

are a number

no

fixed

of

solely

monthly

connections,

on-line
for

fees

connections

securities
are

used

by

transfers.

proposed

for

At

these

pending a review of the fee structure

for the securities transfer service later this year.
Currently,

some Federal Reserve Banks'

terminal lease

fees include a component that is intended to recover a portion
of intradistrict communications and other costs.
Banks

also assess

that own their

fixed monthly fees

own

terminals

to on-line

or micro-computers

leasing them from the Federal Reserve.
monthly

fees for on-line

the

fixed

monthly

institutions
At

fees

institutions
rather

than

If the proposed fixed

institutions are

proposed that these Reserve

Some Reserve

implemented,

it is

Banks would discontinue assessing

that

they

now

charge

to

on-line

7/
this

time,

the

Reserve

Banks

project

that

intradistrict communications costs will amount to approximately

7/
Existing fees assessed for terminals used exclusively for
securities transfers will continue in effect pending a review
of the fee structure for securities transfers later this year.

-

20

-

$8.3

million during 1984, an increase of 20 to 40 percent over

1983

costs. The relatively substantial

based

on estimates

of

the

effects

increase incosts

of

the AT&T divestiture,

which are highly tentative at this time,
the number
Based

on

the

connection
estimated

of on-line

connections

projected

with

the

number

Federal

that the proposed

with

of

as well as growth in
the

each

Reserve

is

Federal

type

during

of

Reserve.

on-line

1984,

it

fixed fees would generate

is
annual

8/
revenues of approximately $8.0 million.—

As a result of these changes,

it is also proposed that

the following transaction fees be implemented:
Basic Transfer Originated
Basic Transfer Received
Net Settlement Entries

$0.60
$0.60
$1.30

This proposal would result in a $0.05 reduction in the
basic fee for originating
change

is proposed

for

or

the

receiving
fee

for

net

a funds

transfer.

settlement

No

entries.

This new transaction fee would be implemented at the same time
fixed monthly fees are

implemented,

which

is proposed

to be

June 28, 1984.
By order

of

the

Board

of

Governors

of

the

Federal

Reserve System, January 17, 1984.

(signed) William W. Wiles

William W. Wiles
Secretary of the Board

Approximately 70 percent of the revenue generated through
fixed monthly fees would be allocated to the wire transfer of
funds and net settlement service.

-

21

-

FEDERAL RESERVE SYSTEM
Docket No. R-0504
FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES
AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Fee

Schedules

for

Wire

Transfer

of

Funds

and

Net

Settlement Services.
SUMMARY:

The Monetary Control Act of 1980

Law 96-221)

requires that schedules of fees be established for

Federal Reserve Bank services.
wire

transfer

implemented
1983.

The

(Title I of Public

of

funds

effective
Board

has

and

Revised fee schedules

net

April 29,
approved

surcharges for the wire

settlement
1982,

an

transfer

and

services
continued

increase

in

the

for

the

were
through

off-line

of funds and net settlement

services.
EFFECTIVE DATE:

March 1, 1984.

FOR FURTHER INFORMATION CONTACT:
Director

(202/452-2231)

(202/452-3955)

Schwartz,

or

M.

Elaine

Division,

or Florence M.

Division

Gilbert T.

of

Washington, D. C.

requires

Attorney

Governors

of

the

Young,

Reserve

Program Manager

Bank

Counsel

(202/452-3625)

(202/452-2418),
Federal

Reserve

The Monetary

Control

that fee schedules be developed

Reserve Bank services based on pricing principles
by the Board

Operations;

Legal
System,

20551.

SUPPLEMENTARY INFORMATION:
("Act")

Federal

Associate General

Boutilier,

Board of

Elliott C. McEntee, Associate

(12 U.S.C.

§ 248a).

Act

of

1980

for Federal
established

The current fee schedule for

-

22

-

the Federal Reserve’s wire transfer of funds and net settlement
services was implemented on April 29, 1982, and was reviewed by
the

Board

on

March 17,

1983.

As

indicated

continuing the existing fee schedule
comprehensive

review was

structure

the wire transfer

for

services.
transfers

conducted

These services
made

through

in

the

notice

(48 F e d . R e g . 12135),
during

of funds

1983
and

of

net

the

a

fee

settlement

include both on-line services— i.e.,

electronic

connections— and

off-line

services— i.e., transfers made upon the receipt of a telephone
request.
This
provided

review

concluded

to depository

that

institutions

the
are

off-line
labor

services

intensive

and

that the current off-line surcharges are not fully

recovering

the costs

enable the

incurred in providing the services.

Reserve Banks to recover

the

To

costs of off-line services,

the

Board has determined that the following

surcharges will apply

for off-line services beginning March 1,

1984:

Wire Transfer of Funds

Net Settlement

Off-line Origination

$5.50

Off-line Settlement

$8.00

Telephone Advice

$3.00

Telephone Advice

$3.00

The current fees are $3.50 for an off-line origination
of a funds transfer, $5.00 for an off-line origination of a net
settlement,

and

$2.25

for

a

telephone

transfer or net settlement entry.
it

is

anticipated

that

annual

approximately $ 8 million.

As a
off-line

advice of a
result of the
revenue

will

funds
changes,
be

The current basic fee for transfers

-

originated and received

23

-

($0.65 per transfer) and net settlement

entries ($1.30 per entry) will remain in effect until a new fee
schedule

is approved

proposed

that

originated and

the

by

the

basic

received be

Board

later

transaction fee
reduced

this year.
for

It

is

transfers

to $0.60 and a new fixed

monthly fee be assessed to on-line institutions based upon the
type of electronic
institution
Schedules

connection

and the

for

Wire

Services, published
By order

of

that

Federal Reserve
Transfer

of

is

installed

Bank.

Funds and

(See

between
Proposed

Net

the
Fee

Settlement

simultaneously with this notice.)
the Board of

Governors

of

the

Federal

Reserve System, January 17, 1984.

(signed) William W. Wiles

William W. Wiles
Secretary of the Board


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102