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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 .
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2
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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.
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3
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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
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6
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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
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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.
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12
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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
