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7/25/24, 9:38 AM FRB: Press Release -- Provision of reduced fees for electronic payment services to depository institutions -- November 4, 1998 Release Date: November 4, 1998 For immediate release The Federal Reserve Board today announced continued price reductions in fees for electronic payment services provided to depository institutions by the Federal Reserve Banks. Most of the new fees become effective January 4, 1999. Prices across all electronic payment services will decline 17.5 percent in 1999, reflecting lower prices for Fedwire® and automated clearing house (ACH) transactions. In large part, the savings reflect the efficiencies gained from the successful completion of a five-year project to consolidate the Federal Reserve's computer facilities. For 1999, Reserve Banks will reduce the basic fee for a Fedwire funds transfer and a Fedwire securities transfer by almost 30 percent and 25 percent, respectively. The Reserve Banks will eliminate some ACH fees and reduce other fees for their ACH customers, including the fee for items received, which will decline by more than 12 percent. Fees for paper check products, which include forward processed, fine sort and returned checks, will increase about 2.6 percent on a volume-weighted basis (a 3.7 percent increase from January 1998 fee levels). This increase is driven primarily by increases in fine sort and returned check fees. Fees for forward-processed items will remain stable. Fees for payor bank services, which include electronic check products, will increase about 0.6 percent (a 1.2 percent increase from January 1998 fee levels). In addition to these fee changes, the Reserve Banks will implement a volume-based fee structure for the Fedwire funds transfer service and a new fee structure for the Fedwire securities transfer service. These structure changes become effective February 1, 1999. During the first quarter of 1999, the Reserve Banks also will implement an enhanced multilateral settlement service that will allow participants in settlement arrangements to submit settlement files to the Federal Reserve electronically, improving operational efficiency over current methods. The fees and fee structure for the new and existing multilateral settlement services have been revised by lowering the perentry fee, introducing a settlement file fee, and increasing the off-line surcharge. Working with other industry participants, the Reserve Banks also plan to expand their efforts to educate depository institutions and end users about the benefits of the ACH. This campaign, coupled with ACH fee decreases for 1999, is expected to spur commercial ACH growth and help broaden the use of electronic payment systems. https://www.federalreserve.gov/boarddocs/press/boardacts/1998/19981104/ 1/2 7/25/24, 9:38 AM FRB: Press Release -- Provision of reduced fees for electronic payment services to depository institutions -- November 4, 1998 The Monetary Control Act of 1980 requires the Federal Reserve to recover the costs of providing certain payment services over the long term. During the period 1988 to 1997, the Reserve Banks recovered 99.6 percent of the costs of priced services. The Reserve Banks project that they will recover 101.0 percent of their priced services costs for 1999, including imputed expenses and targeted return on equity, generating a net income of $64.2 million. The Reserve Banks estimate that they will recover 102.2 percent of their costs in 1998. The Board today also approved the 1999 private sector adjustment factor (PSAF) for Reserve Bank priced services of $115.8 million, an increase of $7.3 million or 6.7 percent from the 1998 targeted PSAF of $108.5 million. The PSAF is an allowance for taxes and other imputed expenses that would have been paid and return on capital that would have been earned had the Federal Reserve's priced services been provided by a private business firm. The Board's notice is attached. Summary only | Notice (129 KB PDF) 1998 Banking and consumer regulatory policy Home | News and events Accessibility Last update: November 4, 1998, 4:45 PM https://www.federalreserve.gov/boarddocs/press/boardacts/1998/19981104/ 2/2