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F ederal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular No. 82-153
December 3, 1982
ACH REVISED FEE SCHEDULE
A N D CHANGES IN PROCEDURES
FOR ADMINISTERING CLEARING BALANCES
TO ALL FINANCIAL INSTITUTIONS IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
On N ovem ber 18, 1982, the Board o f Governors o f th e Federal R ese r v e
S ystem approved a new f e e schedule for the A u tom ated C learing House (ACH)
se rv ic e that will be e f f e c t i v e D e c e m b er 30, 1982.
A lso announced ch anges in
procedures for adm inistering clearing balances.
The new f e e schedule w as develop ed in a c cord an ce w ith the Board’s
r e c e n t decision to phase-out the in cen tive pricing policy for th e ACH se r v ic e .
S p e c ific a lly , the prices approved by the Board are s e t to reco v e r 40 p ercen t o f the
current c o s ts o f providing c o m m e r cia l ACH s e r v ic e s including the private se cto r
adjustm ent fa cto r . When ACH p rices are reestab lish ed in la te 1983, they will be
s e t to r eco v er 60 p ercen t o f the t o ta l c o m m e r cia l costs; in la te 1984, they will be
s e t to r e co v e r 80 percen t o f t o ta l c o m m e r cia l costs; and in l a t e 1985, they will be
s e t to r eco v er 100 p ercen t o f t o ta l c o m m e r cia l c o sts.
Structurally, the new f e e sch edule is the sam e as the current f e e
schedule; that is, f e e s are a ssessed to originators o f c o m m e r cia l debit tran saction s
and r e c e iv e r s o f c o m m e r cia l cred it tran saction s.
In addition, the f e e schedule
c on tin u es to include an interregional price d iffe r en tia l. B ecau se r e c e iv e r s o f ACH
c r ed it tran saction s r e a liz e greater b e n e fits through operating c o st savings and
improved funds availability than originators o f day c y c le ACH debit tran saction s
r e a liz e , r e c e iv e r s o f c r ed its will be a ssesse d higher f e e s than originators o f day
c y c le d ebits. Furtherm ore, because use o f the night c y c le provides originators later
deposit deadlines and b e tte r turnaround t im e s than day c y c le operations, a surcharge
will be im posed for night c y c le operations. A t this tim e , night c y c le operations are
gen erally r e str ic te d to cash co n cen tra tio n debit tran saction s.
A s additional
e x p e r ie n c e is gained with night c y c le operations, consid eration s will be given to
rem oving this r estriction .
The follow ing
D e c e m b er 30, 1982:
fee
sch edule
w as
approved
for
im p lem en ta tio n
on
Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
- 2 DAY CYCLE
Intra - ACH
D eb its Originated
C red its R e c e iv e d
N ew York Intra - ACH
2.0 C en ts
4.0 C en ts
Inter - ACH
D eb its Originated
C redits R e c e iv e d
D e b its O riginated
C red its R e c e iv e d
1.0 C ents
2.0 C ents
N ew York Inter - ACH
3.5 C en ts
5.5 C en ts
D e b its O riginated
C red its R e c e iv e d
2.5 C ents
3.5 C ents
NIGHT CYCLE
Intra - and Inter - ACH
N ew York Intra - and Inter - ACH
D eb its O riginated
D eb its O riginated
5.0 C en ts
5.0 C ents
The Board also approved tw o ch anges in procedures governing the
e sta b lish m e n t and m aintenance o f clearing balances. The changes, to be e f f e c t i v e
January 27, 1983 or as soon th e r e a fte r as possible, are:
1.
to perm it any depository in stitu tion desiring
have one.
a clearing balance
2.
to revise the current carryover lim it by providing p e n a lty -fr e e bonds
on eith e r side o f the to ta l required balance.
to
The Board's press r e le a s e and Federal re g ister m aterial regarding th ese
tw o top ics is a tta c h e d .
If you have any questions or c o m m e n ts about the new ACH fe e
schedule, please c o n ta c t Mary M. Rosas, (214) 651-6336 or Thomas D. H olloway,
(214) 651-6123 at the Head O ffic e ; Larry Wilson, (915) 544-4730 a t the El Paso
Branch; Vernon L. B artee, (713) 659-4433 a t the Houston Branch; and John A.
Bullock, (512) 224-2141 at the San Antonio Branch.
For questions on the
clearing balance ch anges c o n ta c t Larry M. Snell, (214) 651-6199 or Allan Y. N eale,
(214) 651-6334.
Additional co p ies o f this circular will be furnished upon request to the
D ep artm en t o f C om m unications, Financial and C om m unity A ffairs, Extension 6289.
Sincerely,
William H. W allace
First Vice President
FEDERA^RESERVEpres^^lease
For immediate release
November 22, 1982
The Federal Reserve Board today announced a revised fee schedule for
its automated clearing house (ACH)—^ service and changes in the Federal Reserve's
procedures for administering clearing balances.
ACH service fee schedule:
The Monetary Control Act of 1980 requires that the Federal Reserve
establish fee schedules for its automated clearing house (ACH) service and other
Federal Reserve services, according to pricing principles established by the
Board.
The Board began charging for ACH services, based on pricing principles
published earlier, in August 1981.
In adopting the 1981 fee schedule for ACH
services, the Board recognized that ACH service was in the process of development
and had not yet reached a mature level. In recognition of this fact, the Board
established 1981 fees on the basis of what it regarded as a mature volume of ACH
items, expected to be achieved in approximately five years, with the objective
of promoting the continuing development of the ACH service in the public interest.
The Board said it would review its ACH pricing policy annually.
In reviewing its ACH pricing policy in April 1982, the Board decided
it was appropriate to continue providing a measure of such encouragement.
However,
to provide the private sector with information as to when full cost recovery pricing
would begin, the Board decided on a schedule that calls for increasing ACH fees
by 20 percent annually, permitting ACH fees to be set in 1985 to recover 100 percent
of the costs incurred in providing commercial ACH services.
1/
The Board has therefore
A computer facility for sorting and settling electronically originated payments,
instead of payments originated by checks.
-2 -
adopted the following schedule, which will be in effect in 1983, designed to
recover 40 percent of the current costs of providing ACH services.
Day Cycle
Intra-ACH
Debits Originated
Credits Received
4.0C
New York Intra-ACH
Debits Originated
Credits Received
Inter-ACH
Debits Originated
Credits Received
3.5C
5.5C
New York Inter-ACH
Debits Originated
Credits Received
2.0C
1.0C
2.0 C
2.5C
3.5C
Night Cycle Surcharge
Intra- and Inter-ACH
Debits Originated
5.0$
New York Intra- and Inter-ACH
Debits Originated
5.0C
The basic structure of the new ACH fee schedule is the same as the
current fee schedule.
But the new schedule also recognizes that benefits accrue
to receivers of credits arising from reduced costs and from improved availability
of funds that are not realized by originators of daytime debits.
Consequently,
the fees for receivers of ACH credits will be higher, in general, than for
originators of ACH debits.
The attached notice sets forth the Board's action in greater detail. Any
comment on the new ACH fee schedule may be sent to District Federal Reserve Banks.
Clearing balance procedures:
To improve the flexibility of Reserve Banks in meeting the needs of
institutions holding clearing balances with the Federal Reserve, the Board
approved two changes in procedures governing the establishment and maintenance of
-3-
clearing balances.
Clearing balances are balances maintained with the Federal
Reserve by a depository institution for settling funds transfers cleared through
the Federal Reserve.
use topay for
27, 1983 or
These balances earn credits which institutions may
Federal Reserve services.
The changes, to be effective January
as soon thereafter as possible, are:
(1)
Permit any depository institution desiring
a clearing balance to have one. Current procedures
vary widely among Reserve Banks, with some Banks
allowing clearing balances only for institutions
that have zero or small reserve balances and other
Banks allowing clearing balances for some larger
banks as well.
(2)
For pure clearing balance and mixed accounts,
revise the current carryover limit of 2 percent
of the required clearing balance plus required
reserves by providing penalty-free bands on
either side of the total required balance equal
to the greater of $25,000 or 2 percent of the
required clearing balance. Any institution
holding a balance within these bands would
receive earnings credits on the actual clearing
balance held and would not incur penalties for
deficiences. The lower bound of the penaltyfree band would be truncated at the point where
the total maintained balance equals the required
reserve balance. Thus, an institution could not
use the penalty-free band on its clearing balance
to lower its effective reserve requirement. Carry
over would be allowed for amounts outside the
penalty-free bands but within current carryover
limits. Institutions with only a reserve balance
would remain under current carryover rules.
The Board's clearing balance policy which these changes amend was published
February 27, 1981.
-0 -
FEDERAL RESERVE SYSTEM
FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
New Fee Schedule for the Automated Clearing House Service.
SUMMARY: The Monetary Control Act of 1980 (Title I of Pub.L. 96-221)
requires that schedules of fees be established for Federal Reserve
Bank services.
On December 31, 1980, the Board adopted a fee
structure for the automated clearing house service, effective
August 1, 1981. The Federal Reserve has now adopted a new fee
schedule for this service.
EFFECTIVE DATE:
December 30, 1982.
FOR FURTHER INFORMATION CONTACT:
Elliott C. McEntee, Assistant
Director (202/452-2231), or Florence M. Young, Program Manager,
(202/452-3955) Division of Federal Reserve Bank Operations; Gilbert T.
Schwartz, Associate General Counsel (202/452-3625), or Daniel L.
Rhoads, Attorney (202/452-3711), Legal Division, Board of Governors of
the Federal Reserve System, Washington, D. C.
SUPPLEMENTARY INFORMATION: The Monetary Control Act of 1980 ("Act")
requires that fee schedules be developed for Federal Reserve Bank
services based on pricing principles established by the Board. The
Board, in accordance with the requirements of the Act, published for
comment proposed pricing principles and fee schedules for services on
August 28, 1980 (45 FR 58689).
On December 30, 1980, after
considering the comments received from the public, the Board adopted
revised pricing principles and a fee schedule for the automated
clearing house ("ACH") service (46 FR 1338) . The ACH fee schedule was
effective August 1, 1981. In adopting the 1981 fee schedule for the
ACH service, the Board recognized that the ACH service was in the
process of development and had not yet reached a mature level.
In
recognition of this fact, the Board established 1981 fees on the basis
of what it regarded as a mature volume of ACH items, which was
expected to be achieved in approximately five years.
The Board
determined that establishing a fee schedule that promotes the
continuing development of the ACH service was in the public interest.
The Board also committed to review its ACH pricing policy annually.
The Board reviewed its policy of incentive pricing for the
ACH service in April 1982 and determined that it was appropriate to
continue providing a level of price support for the service. The
Board believed that such support was necessary to avoid jeopardizing
the future of this payment service. Further, the Board believed that
an adequate volume is necessary in order to attract private sector
-2-
competition in this area. It was also recognized that the private
sector would benefit from knowledge of when the Federal Reserve would
begin full-cost pricing of the ACH service. Consequently, the Board
determined to phase out its incentive pricing policy and establish a
date for pricing the ACH service to recover the full costs of
providing the service, including the private sector adjustment
factor. To achieve a smooth transition, the Board determined that
fees for the ACH service will be increased annually to recover an
additional 20 percent of the costs of providing the service, plus
private sector adjustment factor.
Accordingly, the fee schedule
established in 1982 would provide for recovery of 40 percent of the
current costs of providing the service, including the private sector
adjustment factor. The fee schedules to be adopted in 1983, 1984, and
1985 would provide for recovery of 60 percent, 80 percent and 100
percent, respectively, of commercial ACH costs, including private
sector adjustment factor.
The structure of the new fee schedule for the ACH service
will remain unchanged from the 1981 fee schedule. Fees will continue
to be charged to the party originating an ACH debit and the party
receiving an ACH credit. Additionally, the fee schedule continues to
include an interregional price differential. No fees will be assessed
receivers of direct deposit payments made under the Treasury
Department's Federal Recurring Payments Program.
In general, receivers of ACH credits will pay a fee that is
higher than that paid by originators of ACH debits. This recognizes
the benefits accruing to receivers of credits through operating cost
savings and improved funds availability that are not realized by
originators of day cycle debits.
The 1981 fee schedule did not distinguish between fees paid
by originators of cash concentration debits using the night cycle and
those paid by originators of debits using the day cycle.
In
recognition of the substantial benefits that accrue to originators of
cash concentration debits using the night cycle, the Board has decided
to impose a surcharge for the night cycle operations.
Cash
concentration debits are generally time critical since concentration
banks are not normally advised of deposits at regional depository
institutions until late in the day.
Further, because of the
relatively high average value of cash concentration debits, the
reliability of the ACH mechanism is of importance to originators of
these debits. The night cycle also provides originators of cash
concentration debits better deposit deadlines and better turnaround
times than are provided by day cycle operations. As experience with
the night cycle operations is gained, the operational necessity of
restricting night cycle operations to cash concentration debits may be
eliminated.
-3 -
The new fee schedule for the Federal Reserve's ACH service is
as follows:
Dav Cycle
Intra-ACH
Debits Originated
Credits Received
Inter-ACH
Debits Originated
Credits Received
2.0j£
4.0^
New York Intra-ACH
Debits Or iginated
Credits Received
1. Of!
2.0£
3.5£
5.5#
New York Inter-ACH
Debits Originated
Credits Received
2.5£
3.5£
Night Cycle Surcharge
Intra- and Inter-ACH
Debits Originated
5.0£
New York Intra- and Inter-ACH
Debits Originated
5.0£
This fee schedule will be effective December 30, 1982. Any
comments regarding the fee schedule should be forwarded to your local
Federal Reserve office.
By order of the Board of Governors of the Federal Reserve
System, November 19, 1982.
(signed) William W. Wiles
William W. Wiles
Secretary of the Board
[SEAL]
@FedFRASER