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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 of funds
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

Larry

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

Inter-ACH
Unsorted
Presorted

$3.00 per t a p e

F i l e P r o ce s s i n g

$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:
Debits
Next-Day C r e d i t s

Tape Handling

6. 0 c e n t s
3. 0 c en ts

C ou r i e r

$3.00 per d e l i v e r y

Messenger Pick-Up

$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

is

the

private

sector

to be $5 7.1 million,

$62.4 million,

million.

The

expected

to

the Board has

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