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FE 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
C i r c u l a r No. 84-116
December 5, 1984
TO:
All d e p o s i t o r y i n s t i t u t i o n s
Reserve D i s t r i c t
ATTENTION:
Chief Ope rat ion s O f f i c e r
SUBJECT:
Revised fee schedule for transfer
automated clearinghouse (ACH) services
DETAILS:
The Board o f Governors o f t he Federal Reserve System
has approved a r e d u c t i o n in t he f ee t h a t Federal
Reserve
Banks charge d e p o s i t o r y i n s t i t u t i o n s f o r
o r i g i n a t i n g o r r e c e i v i n g a t r a n s f e r o f funds over the
Fed' s network.
In a d d i t i o n , t he Board i s s ue d a
r e v i s e d s che dule o f f e es f o r ACH s e r v i c e s .
ATTACHMENTS:
Federal Reserve p r e s s r e l e a s e and two Federal R e g i s t e r
documents
MORE INFORMATION:
J onni e
M iller,
Extension 6118
ADDITIONAL COPIES:
Publi c A f f a i r s Department, Extension 6289
Extension
in t he Eleventh Federal
6290;
or
of
Larry
funds
and
R ipl ey,
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)
FEDERALRESERVEpressrelease
For immediate r e l e a s e
The
November 16, 1984
Federal Reserve Board has approved a r e d u c t i o n in t h e f e e t h e
Federal Reserve Banks
charge d e p o s i t o r y i n s t i t u t i o n s f o r o r i g i n a t i n g or
r e c e i v i n g a t r a n s f e r of funds over t h e Federal Reserve System' s wire t r a n s f e r of
funds network and a r e v i s e d s che du le of
f ee s f o r automated c l e a r i n g h o u s e s e r v i c e s .
The changes f o r wire t r a n s f e r a r e e f f e c t i v e December 27 as a r e most
of
t h e r e v i s i o n s in automated c l e a r i n g h o u s e s e r v i c e s .
The Board a c t e d under t h e d i r e c t i v e s of t h e Monetary Control Act of 1980,
which r e q u i r e t h e Federal Reserve t o charge f o r i t s
The Board approved t h e f o l l o w i n g s ch edul e
services to depositories.
of f e e s f o r wire t r a n s f e r s and
f o r net s e t t l e m e n t s e r v i c e , reducing t h e f e e f o r b a s i c w i r e t r a n s f e r s from 60 c e n t s
t o 55 c e n t s p er t r a n s f e r :
Wire T r a n s f e r of Funds
Basic T r a n s f e r O r i g i n a t e d
Basic T r a n s f e r Received
Of f- Li ne O r i g i n a t i o n
Telephone Advice
Net S e t t l e m e n t V
$0.55
$0.55
$5.50
$3.00
S e t t l e m e n t Entry
Off- Line S e t t l e m e n t
Telephone Advice
$1.30
$8.00
$3.00
The r e v i s e d s ch edul e of f e es f o r automated c l e a r i n g h o u s e s e r v i c e s
i s i n t e n d e d t o r e c o v er 80 p e r c e n t of c o s t s , compared t o 60 p e r c e n t in 1984.
In s e t t i n g i t s r e v i s e d f e e s f o r ACH s e r v i c e s , t h e Board r e - e v a l u a t e d
a number
of a s p e c t s of ACH f e e s .
These i n c l u d e t h e
use of b e n e f i t based f e e s ,
t h e l e v e l of t r a n s a c t i o n f e e s , f e e s f o r d e l i v e r y by o t h e r t ha n e l e c t r o n i c
means and f e e r e c ov er y of t h e c o s t s of h a n dl in g of ACH r e t u r n items and
n o t i f i c a t i o n of change.
27
In" c as es where net s e t t l e m e n t arrangements r e s u l t in h i g h e r o p e r a t i n g c o s t s
t h a n t h o s e i n c u r r e d f o r s t a n d a r d a r ra n ge me nt s , t h e Reserve Banks may e s t a b l i s h
higher fe e s.
-
3
-
Current f e e s f o r c o r p o r a t e t r a d e payments w i l l remain in e f f e c t .
The a t t a c h e d documents give f u r t h e r d e t a i l s c on ce rn ing t h e r e v i s i o n of
wi re t r a n s f e r f e e s and t h e ACH f e e s ch edul e approved by t h e Board.
The r e v i s e d ACH f e e s chedule f o r 1985 f o l l o w s :
Fixed Fees
T r a n s a c t i o n Fees
Ori gi n a t i o n :
Intra-ACH
Deposit Fees:
1. 0 cent
Tape Handling
F i l e P r o ce s s i n g
Inter-ACH
Unsorted
Presorted
$3.00 per t a p e
$1.00 per f i l e
1.8 cent s
1.2 c e nt s
R ec ei ve r Handling Fees:
Night Time Su rcharges:
C ou r i e r
6. 0 c e n t s
3. 0 c en ts
$3.00 per d e l i v e r y
Messenger Pick-Up
Debits
Next-Day C r e d i t s
$1.25 per d e l i v e r y
Re c e i p t :
Intra-ACH
1.0 cent
Inter-ACH
1.8 c en ts
I n c l u d i n g Ten Pieces
of I n f o r ma t io n
$2.50
New York
1. 2 c e nt s
Each A dd i t i o n a l Piece
$0.05
of I nf o rma t io n
Paper Return Items
and N o t i f i c a t i o n s
of Change
Telephone Advice:
$2.50
-
Attachments
0
-
FEDERAL RESERVE SYSTEM
FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Fee
Schedule
for
Wire
Transfers
of
Funds
and
Net
Settlement Service.
SUMMARY:
The Board of Governors of the Federal
("Board")
has
approved
a
reduction
in
the
Reserve System
basic
originating or receiving a wire transfer of funds
fee
for
from $0.60 to
$0.55.
EFFECTIVE DATE:
December 27, 1984.
FOR FURTHER INFORMATION CONTACT:
Director
(202/452-2231)
or
Florence
Electronic Payments Section,
Reserve Bank Operations;
Counsel
(202/452-3625)
(202/452-2418),
Legal
Elliott C. McEntee, Associate
M.
Young,
(202/452-3955) Division of Federal
Gilbert T. Schwartz,
or
Elaine
Division,
M.
Associate General
Boutilier,
Board
Federal Reserve System, Washington,
SUPPLEMENTARY INFORMATION:
Manager,
of
Attorney
Governors
of
the
D. C. 20551.
Effective
September 27,
1984,
the
fee for originating or receiving a wire transfer of funds was
reduced $0.05 to a new basic
F e d . R e g . 35866.
assessing
having
At
the
fixed monthly
an electronic
same
fees
time,
to all
connection with
one or more priced services,
R e g . 36689.
fee of $0.60 per
the
transfer.
Board
depository
the Federal
49
approved
institutions
Reserve
beginning January 1985.
for
49 F e d .
-
When
was
stated
the reduction
that if
the
5
-
in the basic
Reserve
Banks'
show a net surplus for this service,
fee was approved,
estimates
continued
it
to
the Board would consider a
further reduction in the basic fee for originating or receiving
a wire transfer of funds.
Based on the Reserve Banks'
full
year
1984,
adjustment
total
factor
costs,
("PSAF"),
including
are expected
and revenues are anticipated to be
a net
revenue
funds
transfers
million.
$5.3
originated
Accordingly,
the basic fee
funds.
surplus of
current estimates
the
$62.4 million,
The
expected
to
the Board has
sector
to be $5 7.1 million,
million.
is
private
for the
resulting
in
volume of basic
amount
to
41.1
approved a reduction
for originating or receiving a wire
in
transfer of
All other elements of the current fee schedule remain
unchanged.
The
total costs,
Reserve
Banks'
1985
projections
including the PSAF, will amount
Based on the transaction fee of $0.55 and on
be allocated to the funds
from
are
to amount
to
to
that
$62.8 million.
income that will
transfer and net settlement service
fixed monthly electronic
expected
indicate
connection
$63.0 million,
fees,
1985
resulting
revenues
in a net
revenue surplus of $200,000.
Accordingly,
schedule
service:
for
the wire
the Board has approved the following
transfer
of
funds
and
net
fee
settlement
-6Net Settlement.
Wire Transfer of Funds
Basic Transfer Originated
t0.55
Settlement Entry
.3 0
Basic Transfer Received
$0.55
Off-Line Settlement
.00
Off-Line Origination
$5.50
Telephone Advice
.00
Telephone Advice
$3.00
By order
Reserve System,
of
the
November
Board
of
Governors
of
the
Federal
15, 1984.
(signed) James McAfee
James McAfee
Associate Secretary of the Board
1/
In cases where net settlement arrangements result in higher
operating costs than those incurred for standard arrangements,
the Reserve Banks may establish higher fees.
7
-
-
FEDERAL RESERVE SYSTEM
F EE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Fee Schedule for the Automated Clearing House Service.
SUMMARY:
The Board of Governors of the Federal
("Board"), has approved a revised fee schedule
Bank automated clearing house
EFFECTIVE DATES:
All
Reserve System
for the Reserve
("ACH") service.
transaction fees will be
implemented on
December 2 7, 1984, except the fee for handling paper AC H return
items and notifications of change,
on
January 31,
December 27,
1985.
All
fixed
which will become effective
fees will
(202/452-22 31)
or
Electronic Payments Section
Reserve Bank Operations;
Counsel
(2 02/452-3625)
(202/452-2418),
Legal
Elliott C. McEntee,
Florence
M.
Young,
(2 02/452-3955),
or
Elaine
Division,
INFORMATION:
On
M.
Manager,
Associate General
Boutilier,
Board
of
D. C.
March 2 9,
Associate
Division of Federal
Gilbert T. Schwartz,
Federal Reserve System, Washington,
SUPPLEMENTARY
implemented on
1984.
FOR FURTHER INFORMATION CONTACT:
Director
be
Attorney
Governors
of
the
20551.
1984,
the
Reserve
Banks implemented new fees for the ACH service that were set to
recover 60 percent of the total costs
incentive pricing p olicy adopted by
49 Fed.
AC H
R e g . 6564.
fees
providing
are
set
in accordance with
the Board
in April
In accordance with this policy,
to
commercial
recover
ACH
80
percent
services.
This
of
the
1982.
the revised
costs
incentive
the
of
pricing
policy was established in order to encourage growth in the ACH
service, generally.
incentive
pricing
It is believed appropriate to continue the
policy
through
1985
in
order
to
avoid
disruption among users of Federal Reserve ACH services.
same time,
several aspects of
re-evaluated.
These
aspects
benefits-based fees;
level
of
fees
practice of
return
for
the A C H
At the
fee schedule have been
include:
(1)
the
use
of
(2) the level of transaction fees;
non-e lectronic
recovering
deliveries;
and
(3) the
(4)
the
the costs associated with handling A CH
items and notifications
of
change
through
transaction
fee s .
Benefits-Based
process
debit
that
two
types
of
transactions.
is,
debits,
the
Fees
the
Because
fees
ACH
service
of
funds
credits
earlier
and
the
through
is
used
transactions
the institutions
would if a paper check were used,
assessed higher
The
transactions--credit
receivers
receive
—
receiving
originators
the ACH
than
to
and
funds,
of
they
the previous A C H fee schedule
to these ACH participants.
This
pricing
policy was intended to encourage use of the ACH.
Because of the trend towards the use of private sector
ACH
processing,
under
the
benefits-based
fee
structure,
cross-subsidies would occur among depository institutions using
Federal
example,
Reserve
if
originates
a
a
operated ACH,
services
user
credit
of
and
the
privately operated
Federal
transaction
Reserve's
destined
for
ACHs.
ACH
a
Fd t
service
privately
the originator would be charged 1.0 cent and the
-
9
-
privately operated ACH would be charged
current fee schedule.
For this reason,
3.0 cents
under
the Board believes that
continued use of benefits-based fees is inappropriate,
determined
that the same transaction
the
and has
fees will be assessed to
originators and receivers of A C H transactions.
Level
schedule
of
ACH
includes
Transaction
a
reduction
approximately 0.2 cent
Fees
in
—
The
inter-ACH
revised
fees
fee
of
for the originator and the receiver to
reflect more accurately the cost of providing this elemenjt of
the ACH service.
Non-Electronic
delivery fees are
magnetic
tapes,
transactions,
diskettes
or
via
necessary to generate
delivery
addition,
t0.75
is a
Fee
intended to recover
preparing
to messengers
Delivery
time
and
paper
--
The
non-electronic
the costs of generating
listings
containing
ACH
them for delivery and delivering
ground
transportation.
physical output and
consuming,
labor
The
to
ground transportation is costly.
for messenger pick-up and tl.75
processing
prepare
intensive
them
it
for
activity.
In
The current fees of
for ground delivery are
not recovering the costs that the Reserve Banks incur in making
non-electronic
deliveries.
delivery fees will be
pick-up and to $3.00
Therefore,
increased
to
$1.25
the
for
non-electronic
each
messenger
for each delivery to institutions
using
Federal Reserve transportation.
ACH
costs
of
Return
processing
Items
and Notifications of Change
return
items
and
notifications
-- The
of
-
changei^
fees.
are
currently
change are deposited with
labor
through
return
items
the Federal
basic
and
disproportionately
the
institutions
costly
Reserve
high
full
share
costs
returning
operation
of
of
in paper
constitutes
operating
item
transactions would
form.
to be an extremely
and
ACH
return
transaction
and notifications of
return item processing tends
intensive
Assessing
-
recovered
About 96 percent of
As a result,
10
a
costs.
processing
result
in
to
the costs
of the ACH service being assessed to users more equitably.
addition,
by
the efficiency of
assessing
a
fee
for
the ACH mechanism can be improved
return
item
Therefore,
the Board has approved a fee of $2.50
paper
return
Reserve
Banks
plan
and
to begin
automated
to
institutions
items
deposit
processing
depository
ACH
to
notifications
converting ACH
of
encourage
return
items.
for handling
change.
return
The
items
notifications of change to automated form on January 31,
and
the
fee
for handling
In
these
items will
be
and
198 5,
implemented on
that date.
While
it
may
be
desirable
to
assess
a
fee
automated return items and notifications of change,
now possible because of operating considerations.
Banks
will
be
implementing
new
discontinued making modifications
AC H
software
for
it is not
The Reserve
and
have
to the current A C H software.
The current software does not provide the capability to assess
1/
Notifications of change are used by receiving
institutions
to advise originators of recurring transactions about changes
in such elements as customers' names and account numbers.
-
11
-
a fee for automated return items and notifications of change.
However,
will
when
the new ACH
software
is
implemented
review the possibility of assessing
a fee
the
Board
for automated
return items and notifications of change.
Cost,
percent
recovery
including
million
Volume,
and
rate,
Revenue
Reserve
the PSAF and float,
for
1985.
Revenues
Projections
Bank
--
commercial
At
AC H
estimated
at
$18.4
80
costs,
are projected to amount
are
the
to $18.0
million,
resulting in a net revenue surplus of approximately $400,0^)0.
Accordingly,
the Board has approved
the following
schedule for the Federal Reserve's ACH service:
Transaction Fees
Origination:
Intra-ACH
1.0^
Inter-ACH
Unsorted
Presorted
1.8^
1.2^
Night Time Surcharges:
Debits
Ne xt-Day Credits
6.0^
3.0^
Receipt:
Intra-ACH
l.O^f
Inter-ACH
1.8^
New York
1.2<t
Paper Return Items
and Notifications
of Change
$2.50
fee
-
12
-
Fixed Fees
Deposit Fees:
Tape Handling
$3.00 per tape
File Processing
$1.00 per file
Receiver Handling Fees:
Courier
$3.00 per delivery
Messenger Pick-Up
$1.25 per delivery
Telephone Advice:
Including Ten Pieces
of Information
$2.50
Each Additional Piece
of Information
$0.05
The
remain
in
connection
current
effect.
with
fees
Also,
for
corporate
institutions
the Federal
By order
of
the
Reserve System, November
having
Reserve will
fees as approved earlier by the Board.
Board
of
trade
payments
an
will
electronic
be assessed monthly
49 F e d . R e g . 3668 9.
Governors
of
the
Federal
15, 1984.
(signed)James McAfee
James McAfee
Associate Secretary of the Board
