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FEDER AL RESERVE BANK
O F DALLAS

January 9, 1924.

M E T H O D O F A S S E S S IN G

C O S T S O F E X A M IN A T IO N S

O F STATE M EM BER BANKS

To the State Member Bank Addressed:
In a circular letter to state member banks, dated August 21,1923, you were advised
of a ruling by the Federal Reserve Board to the effect that, as provided in Section 9 of
the Federal Reserve Act, all Federal Reserve Banks w'ould, in the future, assess the costs
of their examinations against the member banks examined. In compliance with this
ruling, and in accordance with the specific instructions of the Federal Reserve Board, we
have, since August 1 last, been assessing all state member banks with the actual cost
of examination, including transportation, subsistence of the examiner, and examiner’s per
diem, on the basis of annual salary.
By reason of the apparent inequity in the method previously followed, in that those
banks farthest from the Federal Reserve city bore the largest assessment, the Federal
Reserve Board has recently modified its original ruling and advises that in the future
Federal Reserve Banks need not assess each state member bank examined with the exact
cost of the particular examination. Instead Federal Reserve Banks are permitted to assess
against all state member banks examined during the calendar year the expenses of all
examinations made in that period in proportion to the assets of the bank examined, on
the dates of the examinations.
Therefore, effective January 1, 1924, the assessment of examination costs incurred
during 1924 will be deferred until the end of the year, at which time the costs of all
examinations made will be prorated among the banks examined upon the basis of the
ratio that the total resources of the bank examined, on the date of examination, bear to
the combined resources of all banks examined during the year.
Yours very truly,

Federal Reserve Agent.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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