(STL.News) – The Federal Reserve Board on Wednesday announced the approval of fee schedules, effective January 2, 2020, for payment services the Federal Reserve Banks provide to depository institutions (priced services).
The Reserve Banks project that they will recover 100.2 percent of their priced services costs in 2020. The Reserve Banks expect to fully recover actual and imputed expenses, including profit that would have been earned if a private-sector firm provided the services. Overall, the Reserve Banks estimate that the price changes will result in a 2.4 percent average price increase. The Reserve Banks estimate that the price changes will result in a 3.3 percent average price increase for Check Services customers; a 3.7 percent average price increase for Fedwire® Funds Service customers; and a 2.9 percent average price increase for FedLine® Solutions customers. Fees will remain unchanged for the Reserve Banks’ FedACH® Service, National Settlement Service, and Fedwire® Securities Service. The 2020 fee schedule for each of the priced services is available on the Federal Reserve Banks’ financial services website at FRBservices.orgSM.
The Board also approved the 2020 private-sector adjustment factor (PSAF) of $18.9 million for Reserve Bank priced services. The PSAF is an allowance for income taxes and other imputed expenses that would have been paid and profit that would have been earned if the Reserve Banks’ priced services were provided by a private business. The Monetary Control Act of 1980 requires that the Federal Reserve establish fees to recover the costs of providing priced services, including imputed costs, over the long run, to promote competition between the Reserve Banks and private-sector service providers.