Notice2022-28096
Federal Reserve Bank Services
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 27, 2022
Effective
January 3, 2023
Issuing agencies
Federal Reserve System
Abstract
The Board of Governors of the Federal Reserve System (Board) has approved the private-sector adjustment factor (PSAF) for 2023 of $23.7 million and the 2023 fee schedules for Federal Reserve priced services and electronic access. These actions were taken in accordance with the Monetary Control Act of 1980, which requires that, over the long run, fees for Federal Reserve priced services be established based on all direct and indirect costs, including the PSAF.
Full Text
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<title>Federal Register, Volume 87 Issue 247 (Tuesday, December 27, 2022)</title>
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[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79310-79330]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28096]
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FEDERAL RESERVE SYSTEM
[Docket No. OP-1787]
Federal Reserve Bank Services
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
has approved the private-sector adjustment factor (PSAF) for 2023 of
$23.7 million and the 2023 fee schedules for Federal Reserve priced
services and electronic access. These actions were taken in accordance
with the Monetary Control Act of 1980, which requires that, over the
long run, fees for Federal Reserve priced services be established based
on all direct and indirect costs, including the PSAF.
DATES: The new fee schedules become effective January 3, 2023.
FOR FURTHER INFORMATION CONTACT: For questions regarding the fee
schedules: Ian Spear, Assistant Director, (202) 452-3959; Christian
Miller, Lead Financial Institution Policy Analyst, (202) 452-3769;
Division of Reserve Bank Operations and Payment Systems. For questions
regarding the PSAF: Rebecca Royer, Deputy Associate Director, (202)
736-5662; Sarah Skariah, Senior Financial Institution Policy Analyst,
(202) 973-6882, Division of Reserve Bank Operations and Payment
Systems. For users of TTY-TRS, please call 711 from any telephone,
anywhere in the United States. Copies of the 2023 fee schedules for the
check services are available from the Board, the Federal Reserve Banks,
or the Federal Reserve Financial Services website at
<a href="http://www.FRBservices.org">www.FRBservices.org</a>.
SUPPLEMENTARY INFORMATION:
I. Private-Sector Adjustment Factor, Priced Services Cost Recovery, and
Overview of 2023 Price Changes
A. Overview--Each year, as required by the Monetary Control Act
(MCA) of 1980, the Reserve Banks set fees for priced services provided
to financial institutions. These fees are set to recover, over the long
run, all direct and indirect costs and imputed costs, including
financing costs, taxes, and certain other expenses, as well as the
return on equity (profit) that would have been earned if a private-
sector business provided the services.\1\ The imputed costs and imputed
profit are collectively referred to as the private-sector adjustment
factor (PSAF).
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\1\ Although the Monetary Control Act does not define ``over the
long run,'' the Board has generally measured long-run cost recovery
for mature services to be over a 10-year rolling time frame. The
Board currently views a 10-year cost recovery expectation as
appropriate for assessing mature services, which are those that have
achieved a critical mass of customer participation and generally
have stable and predictable volumes, costs, and revenues. The 10-
year recovery rate is based on the pro forma income statements for
Federal Reserve priced services published in the Board's Annual
Report. In accordance with Accounting Standards Codification (ASC)
715 Compensation--Retirement Benefits, the Reserve Banks recognized
a $686.5 million cumulative reduction in equity related to the
priced services' benefit plans through 2021. Including this
cumulative reduction in equity from 2012 to 2021 results in cost
recovery of 94.3 percent for the 10-year period. This measure of
long-run cost recovery is also published in the Board's Annual
Report.
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From 2012 through 2021, the Reserve Banks recovered 103.0 percent
of their total expenses (including imputed costs) and targeted after-
tax profits or return on equity (ROE).\2\ During that period, check
services, the Fedwire[supreg] Funds Service, National Settlement
Service, and Fedwire Securities Service achieved full cost recovery.
FedACH[supreg] Services achieved 97.9 percent cost recovery as a result
of the Reserve Banks' development and implementation of a multiyear
technology initiative to modernize the FedACH Services processing
platform capabilities. Although the modernized platform was implemented
in 2021, the Reserve Banks are continuing to invest in platform
capabilities, as well as resiliency initiatives, as part of a broader
enhancement strategy. At the same time, the Reserve Banks have made
limited changes to existing FedACH Services fees to provide price
stability for customers in alignment with pricing policies.\3\
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\2\ The Board communicated in its 2019 Notice Federal Reserve
Actions to Support Interbank Settlement of Instant Payments (``2019
Notice'') that it expects the FedNow Service to achieve its first
instance of long run cost recovery outside the 10-year time frame
typically applied to mature services. New services like the FedNow
Service may not initially have stable volumes, costs, and revenues.
Application of the 10-year rolling time frame used to evaluate
mature services to the FedNow Service would result in prohibitively
high or unnecessarily volatile pricing, negatively affecting the
Federal Reserve's public policy objectives in providing the service.
See ``Federal Reserve Actions to Support Interbank Settlement of
Instant Payments,'' 84 FR 39297, (August 9, 2019). Available at:
<a href="https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf">https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf</a>.
\3\ In alignment with the Board's Principles for the Pricing of
Federal Reserve Bank Services, the Reserve Banks will continue to
assess the tradeoffs between price stability for customers,
investment in technology infrastructure to reflect desirable longer-
run improvements in the ACH system, and the expectation of achieving
full cost recovery for the FedACH Service over the long run. See
Board of Governors of the Federal Reserve System, ``Adoption of Fee
Schedules and Pricing Principles for Federal Reserve Bank
Services,'' 46 FR 1338, 1343 (Jan. 6, 1981). Available at <a href="https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf">https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf</a>.
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Table 1 summarizes 2021 actual, 2022 forecasted, and 2023 budgeted
annual cost recovery rates for all priced services, excluding
FedNow\SM\ Service cost and revenue.\4\ Cost recovery is
[[Page 79311]]
forecasted to be 101.1 percent in 2022 and budgeted to be 100.2 percent
in 2023.
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\4\ Per its 2019 Notice, the Board will disclose the FedNow
Service's costs, inclusive of PSAF-related expenses, beginning the
year the service is available to participating banks (currently
anticipated in mid-2023). See ``Federal Reserve Actions to Support
Interbank Settlement of Instant Payments,'' 84 FR 39297, (August 9,
2019). Available at <a href="https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf">https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf</a>.
Table 1--Aggregate Priced Services Pro Forma Cost and Revenue Performance \a\
[Dollars in millions]
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Recovery rate
Year Revenue Total expense Net income Targeted ROE after targeted
(ROE) ROE (%)
1 \b\ 2 \c\ 3 4 \d\ 5 \e\
[1-2] [1/(2 + 4)]
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2021 (actual)................... 456.0 452.7 3.3 4.4 99.8
2022 (forecast)................. 470.1 458.0 12.1 7.2 101.1
2023 (budget)................... 495.8 486.2 9.6 8.4 100.2
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\a\ Calculations in this table and subsequent pro forma cost and revenue tables may be affected by rounding.
Excludes amounts related to the development of the FedNow Service.
\b\ Revenue includes imputed income on investments when equity is imputed at a level that meets minimum capital
requirements and, when combined with liabilities, exceeds total assets (attachment 1). For 2023, the projected
revenue assumes implementation of the fee changes.
\c\ The calculation of total expense includes operating, imputed, and other expenses. Imputed and other expenses
include taxes, Board of Governors' priced services expenses, the cost of float, and interest on imputed debt,
if any. Credits or debits related to the accounting for pension plans under ASC 715 are also included.
\d\ Targeted ROE is the after-tax ROE included in the PSAF.
\e\ The recovery rates in this and subsequent tables do not reflect the unamortized gains or losses that must be
recognized in accordance with ASC 715. Future gains or losses, and their effect on cost recovery, cannot be
projected.
Table 2 provides an overview of cost recovery budgets, forecasts,
and performance for the 10-year period from 2012 to 2021, 2021 actual,
2022 budget, 2022 forecast, and 2023 budget by priced service.
Table 2--Priced Services Cost Recovery
[Percent)]
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2022 Budget 2023 Budget
Priced service 2012-2021 2021 Actual \a\ 2022 Forecast \b\
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All services.................... 103.0 99.8 101.3 101.1 100.2
Check........................... 109.1 103.2 97.1 100.4 100.1
FedACH.......................... 97.9 98.0 100.4 102.3 100.7
Fedwire Funds and NSS........... 102.1 98.6 100.3 99.2 97.7
Fedwire Securities.............. 102.4 103.8 149.4 108.4 109.3
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\a\ The 2022 budget figures reflect the final budgets as approved by the director of the Division of Reserve
Bank Operations and Payment Systems under delegated authority given by the Board, who conditionally approved
the final budgets in December 2021. See Board of Governors of the Federal Reserve System, ``2022 Federal
Reserve Bank Budget Memo and Addendum'' available at 2022 Federal Reserve Bank Budget Memo and Addendum. These
budget figures incorporate the implementation of a new cost accounting framework and a new Enterprise Resource
Planning application, which had not been fully implemented when the initial cost recovery figures for 2022
budget were calculated and reported in last year's Federal Register Notice.
\b\ The 2023 budget figures reflect preliminary budget information from the Reserve Banks. The Reserve Banks
will submit final budget data to the Board in November 2022, for Board consideration in December 2022.
1. 2022 Forecasted Performance--The Reserve Banks forecast that
they will recover 101.1 percent of the costs of providing priced
services in 2022, including total expense and targeted ROE, compared
with a 2022 budgeted recovery rate of 101.3 percent, as shown in table
2. Overall, the Reserve Banks forecast that they will fully recover
actual and imputed costs and earn net income of $12.1 million, compared
with the targeted ROE of $7.2 million. The Reserve Banks forecast that
check services, the FedACH Services, and the Fedwire Securities Service
will achieve full cost recovery.\5\ The Reserve Banks forecast that the
Fedwire Funds Service and the National Settlement Service will not
achieve full cost recovery in 2022. Forecasted under-recovery in 2022
for the Fedwire Funds Service and the National Settlement Service is
driven by an effort to avoid significant price volatility for customers
while maintaining long-run cost recovery.
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\5\ The Fedwire Securities Service over-recovery position is
primarily driven by lower-than-budgeted operating and pension costs
forecasted for 2022.
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2. 2023 Private-Sector Adjustment Factor--The 2023 PSAF for Reserve
Bank priced services is $23.7 million.\6\ This amount represents an
increase of $4.3 million from the 2022 PSAF of $19.4 million. This
increase is attributable to a $2.6 million increase in the cost of
capital primarily driven by rising interest rates, a $1.1 million
increase in sales tax, and a $0.6 million increase in Board of
Governors expenses.
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\6\ Inclusive of the FedNow Service, the PSAF increases to $27.4
million for 2023. In alignment with its 2019 Notice related to the
FedNow Service, fees that will be introduced in 2023 are based on
costs in a mature volume environment. These costs include PSAF-
related expenses the service has incurred over time.
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3. 2023 Projected Performance--The Reserve Banks project a priced
services cost recovery rate of 100.2 percent in 2023, with a net gain
of $9.6 million and
[[Page 79312]]
targeted ROE of $8.4 million.\7\ The Reserve Banks project that each of
the individual service lines will achieve full cost recovery in 2023
except for the Fedwire Funds Service and the National Settlement
Service. The Fedwire Funds Service and the National Settlement Service
are expected to under recover because of ongoing technology
investments, higher operating costs, and a strategy of providing price
stability to customers during a period of rising costs.
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\7\ The FedNow Service will be available mid-2023. Per its 2019
Notice ``Federal Reserve Actions to Support Interbank Settlement of
Faster Payments'' (``2019 Notice''), the Board has determined that
it is most appropriate to report FedNow Service cost recovery
independently of mature priced services until the service has
relatively stable revenues and costs. Thus, FedNow Service cost and
revenue is excluded from overall performance projections for 2023.
See ``Federal Reserve Actions to Support Interbank Settlement of
Faster Payments,'' 4 FR 39297, (August 9, 2019). Available here:
Federal Register:: Federal Reserve Actions To Support Interbank
Settlement of Faster Payments.
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The Reserve Banks' primary risks to current projections are
unanticipated volume and revenue reductions and the potential for cost
overruns from new and ongoing improvement initiatives.
4. 2023 Pricing--The following summarizes the Reserve Banks'
proposed changes to fee schedules for priced services in 2023:
Check
<bullet> The Reserve Banks will increase the check Participation
Fee by $20 to $100 depending on the tier.
<bullet> The Reserve Banks will increase check Premium Delivery
Fees in the FedReceipt[supreg] suite of offerings for 8:00 a.m. ET
target fees by $0.005, from $0.032 to $0.037, 10:00 a.m. local target
fees by $0.002, from $0.020 to $0.022, and noon local target fees by
$0.001, from $0.015 to $0.016.
<bullet> The Reserve Banks will increase check Reject Repair Fees
by $0.05 for both basic and premium users.
<bullet> The Reserve Banks will increase all check FedImage[supreg]
product fees by 10 percent.
<bullet> The Reserve Banks will increase forward paper fees for
Canadian cash letter fees for U.S. and Canadian funds by $2.00 and per-
item fees by $0.50, Canadian Amount Encoding per-item fee by $0.35,
Foreign GBP and EURO per-item fee by $3.00, Foreign All Other per-item
fee by $3.00, Foreign Collection per-item fee by $7.00, and the Mixed
Forward Products cash letter fee by $2.00 and per-item fee by $0.50.
<bullet> The Reserve Banks will increase return paper fees for
Large Dollar Return Item Notification (LDRIN) via the FedLine
Web[supreg] access solution per-item fee by $0.50, Return Item Reclear
cash letter fee by $1.00 and per-item fee by $0.05, Qualified and
Unqualified Return Item cash letter fee by $2.00 and per-item fee by
$1.00, and the Return Item Qualification per-item fee by $1.75.
FedACH
<bullet> The Reserve Banks will add a new fifth tier to the FedACH
Receipt Discount offered to Premium Receiver at a volume threshold of
30 million items per month. The discount for the new tier increases the
current highest discount by $0.0003 to $0.0023 per-item for Premium
Receivers, Level One \8\ and to $0.0024 per-item for Premium Receivers,
Level Two.\9\
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\8\ RDFIs receiving through FedACH at least 90 percent of their
FedACH-originated items, but less than 90 percent of all of their
ACH items originated through any operator.
\9\ RDFIs receiving through FedACH at least 90 percent of all of
their ACH items originated through any operator.
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<bullet> The Reserve Banks will increase the FedACH Participation
fee from $65 to $75 per routing transit number (RTN) per month.
<bullet> The Reserve Banks will introduce a tiered FedACH
Settlement Fee structure with fees ranging from $60 to $200 per RTN per
month, based on Premium Receiver status.
<bullet> The Reserve Banks will increase the FedACH Information
File Extract Fee from $150 to $180 per month.
<bullet> The Reserve Banks will increase the International ACH
Transaction (IAT) File Fee from $75 to $150 per month.
<bullet> The Reserve Banks will increase the FedACH Risk[supreg]
Management Services Package Fees approximately 20 percent per month
depending on the tier.
<bullet> The Reserve Banks will introduce a monthly tiered FedACH
Exception Resolution Service fee structure with fees ranging from $20
to $500 per month based on monthly case volume count.
Fedwire Funds
<bullet> The Reserve Banks will increase the tier 1 volume-based
pre-incentive transfer fee from $0.88 to $0.92.
<bullet> The Reserve Banks will increase the tier 2 volume-based
pre-incentive transfer fee from $0.255 to $0.285.
<bullet> The Reserve Banks will increase the tier 3 volume-based
pre-incentive transfer fee from $0.17 to $0.18.
<bullet> The Reserve Banks will increase the surcharge for offline
transfers from $70 to $75.
National Settlement Service
<bullet> The Reserve Banks will keep prices at existing levels for
all priced National Settlement Service products.
Fedwire Securities
<bullet> The Reserve Banks will decrease the agency transfer fee
from $0.77 to $0.61.
<bullet> The Reserve Banks will decrease the Treasury transfer fee
from $0.77 to $0.61.
<bullet> The Reserve Banks will decrease the issue maintenance fee
from $0.77 to $0.61.
<bullet> The Reserve Banks will transition the transfer and
settlement of marketable Treasury bills, notes, and bonds over the
Fedwire Securities Service from a fiscal agency service to a priced
service.
<bullet> The Reserve Banks will introduce Fedwire Securities
Lending claims adjustment fees to mortgage-backed securities (MBS),
Treasury, and non-Treasury debt securities through the Automated Claims
Adjustment Process (ACAP) enhancements, expanding ACAP eligibility to
all coupon paying securities. Further, the ACAP enhancements will
establish two new fees in the schedule.\10\
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\10\ The two new fees in the schedule are (1) Repo and
Securities Lending Tracking Indicators and (2) Repo and Securities
Lending Position Maintenance.
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FedNow Service
<bullet> The Reserve Banks will introduce a customer credit
transfer and customer credit transfer return fee of $0.045 per-item.
Customer credit transfers up to 2,500 transactions will be discounted
to $0.00 in 2023 per RTN per month.
<bullet> The Reserve Banks will introduce a FedNow participation
fee of $25.00 per RTN per month. This fee will be discounted to $0.00
in 2023 per RTN per month.
<bullet> The Reserve Banks will introduce a Request for Payment
(RFP) fee of $0.01 per-item.
<bullet> The Reserve Banks will introduce a Liquidity Management
Transfer fee of $1.00 per transfer.
FedLine[supreg] Solutions
<bullet> The Reserve Banks will discontinue FedMail[supreg] Fax
Service by December 31, 2023.
<bullet> The Reserve Banks will introduce a flat fee assessment for
FedMail[supreg] Fax Service of $200 per month.
<bullet> The Reserve Banks will increase the price for FedMail
Email Service (for customers with FedLine Web and above) from $60 to
$85.
<bullet> The Reserve Banks will increase the price for FedMail
Subscribers from $15 to $25.
<bullet> The Reserve Banks will discontinue FedComplete[supreg] 100
Command Plus and FedComplete 200 Command Plus.
<bullet> The Reserve Banks will increase the price for FedComplete
100 Advantage
[[Page 79313]]
Plus from $825 to $900 and FedComplete 100 Advantage Premier from $900
to $975.
<bullet> The Reserve Banks will increase the price for FedComplete
200 Advantage Plus from $1,350 to $1,425 and FedComplete 200 Advantage
Premier from $1,425 to $1,500.
<bullet> The Reserve Banks will introduce a flat fee assessment for
legacy VPN devices of $400 per month to customers who have not started
the migration by October 1, 2023.
<bullet> The Reserve Banks will collect FedLine Direct fees from
FedLine Direct, Check 21 Large File Delivery and other FedLine Command
or FedLine Advantage customers that use a wide area network connection.
B. Private-Sector Adjustment Factor--The imputed debt financing
costs, targeted ROE, and effective tax rate are based on a U.S.
publicly traded firm market model.\11\ The method for calculating the
financing costs in the PSAF requires determining the appropriate
imputed levels of debt and equity and then applying the applicable
financing rates. In this process, a pro forma balance sheet using
estimated assets and liabilities associated with the Reserve Banks'
priced services is developed, and the remaining elements that would
exist are imputed as if these priced services were provided by a
private business firm. The same generally accepted accounting
principles that apply to commercial-entity financial statements apply
to the relevant elements in the priced services pro forma financial
statements.
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\11\ Data for U.S. publicly traded firms is from the Standard
and Poor's Compustat[supreg] database. This database contains
information on more than 6,000 U.S. publicly traded firms, which
approximates information for the entirety of the U.S. market.
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The portion of Federal Reserve assets that will be used to provide
priced services during the coming year is determined using information
about actual assets and projected disposals and acquisitions. The
priced portion of these assets is determined based on the allocation of
depreciation and amortization expenses of each asset class. The priced
portion of actual Federal Reserve liabilities consists of
postemployment and postretirement benefits, accounts payable, and other
liabilities. The priced portion of the actual net pension asset or
liability is also included on the balance sheet.\12\
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\12\ The pension assets are netted with the pension liabilities
and reported as a net asset or net liability as required by ASC 715
Compensation--Retirement Benefits.
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The equity financing rate is the targeted ROE produced by the
capital asset pricing model (CAPM). In the CAPM, the required rate of
return on a firm's equity is equal to the return on a risk-free asset
plus a market risk premium. The risk-free rate is based on the three-
month Treasury bill; the beta is assumed to be equal to 1.0, which
approximates the risk of the market as a whole; and the market risk
premium is based on the monthly returns in excess of the risk-free rate
over the most recent 40 years. The resulting ROE reflects the return a
shareholder would expect when investing in a private business firm.
For simplicity, given that federal corporate income tax rates are
graduated, state income tax rates vary, and various credits and
deductions can apply, an actual income tax expense is not explicitly
calculated for Reserve Bank priced services. Instead, the Board targets
a pretax ROE that would provide sufficient income to fulfill the priced
services' imputed income tax obligations. To the extent that
performance results are greater or less than the targeted ROE, income
taxes are adjusted using the effective tax rate.
Capital structure. The capital structure is imputed based on the
imputed funding need (assets less liabilities), subject to minimum
equity constraints. Short-term debt is imputed to fund the imputed
short-term funding need. Long-term debt and equity are imputed to meet
the priced services long-term funding need at a ratio based on the
capital structure of the U.S. publicly traded firm market. The level of
equity must meet the minimum equity constraints, which follow the FDIC
requirements for a well-capitalized institution. The priced services
must maintain equity of at least 5 percent of total assets and 10
percent of risk-weighted assets.\13\ Any equity imputed that exceeds
the amount needed to fund the priced services' assets and meet the
minimum equity constraints is offset by a reduction in imputed long-
term debt. When imputed equity is larger than what can be offset by
imputed debt, the excess is imputed as investments in Treasury
securities; income imputed on these investments reduces the PSAF.
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\13\ The FDIC rule, which was adopted as final on April 14,
2014, requires that well-capitalized institutions meet or exceed the
following standards: (1) total capital to risk-weighted assets ratio
of at least 10 percent, (2) tier 1 capital to risk-weighted assets
ratio of at least 8 percent, (3) common equity tier 1 capital to
risk-weighted assets ratio of at least 6.5 percent, and (4) a
leverage ratio (tier 1 capital to total assets) of at least 5
percent. Because all of the Federal Reserve priced services' equity
on the pro forma balance sheet qualifies as tier 1 capital, only
requirements 1 and 4 are binding. The FDIC rule can be located at 12
CFR 324.403(b).
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Application of the Payment System Risk (PSR) Policy to the Fedwire
Funds Service. The Board's PSR policy incorporates the international
standards for financial market infrastructures (FMIs) developed by the
Committee on Payments and Market Infrastructure and the Technical
Committee of the International Organization of Securities Commissions
in the Principles for Financial Market Infrastructures.\14\ The policy
requires that the Fedwire Funds Service meet or exceed the applicable
risk-management standards. Principle 15 states that an FMI should
identify, monitor, and manage general business risk and hold sufficient
liquid net assets funded by equity to cover potential general business
losses so that it can continue operations and services as a going
concern if those losses materialize. Further, liquid net assets should
at all times be sufficient to ensure a recovery or orderly wind-down of
critical operations and services. The Fedwire Funds Service does not
face the risk that a business shock would cause the service to wind
down in a disorderly manner and disrupt the stability of the financial
system. To foster competition with private-sector FMIs, however, the
Reserve Banks' priced services will hold an amount equivalent to six
months of the Fedwire Funds Service's current operating expenses as
liquid financial assets and equity on the pro forma balance sheet.\15\
Current operating expenses are defined as normal business operating
expenses on the income statement, less depreciation, amortization,
taxes, and interest on debt. Using the Fedwire Funds Service's
preliminary 2023 budget, six months of current operating expenses would
be $69.5 million. In 2023, $49.9 million of equity was imputed to meet
the FDIC capital requirements. Additional equity of $19.7 million was
necessary to meet the PSR policy requirement.
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\14\ The Committee on Payments and Market Infrastructure was
formerly the Committee on Payment and Settlement Systems.
\15\ This requirement does not apply to the Fedwire Securities
Service. There are no competitors to the Fedwire Securities Service
that would face such a requirement, and imposing such a requirement
when pricing the securities services could artificially increase the
cost of these services.
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Effective tax rate. Like the imputed capital structure, the
effective tax rate is calculated based on data from U.S. publicly
traded firms. The tax rate is the mean of the weighted average rates of
the U.S. publicly traded firm market over the past five years.
Debt and equity financing. The imputed short- and long-term debt
financing rates are derived from the nonfinancial commercial paper
rates from the Federal Reserve Board's H.15 Selected Interest Rates
release (AA and
[[Page 79314]]
A2/P2) and the annual Merrill Lynch Corporate & High Yield Index rate,
respectively. The equity financing rate is described above. The rates
for debt and equity financing are applied to the priced services
estimated imputed short-term debt, long-term debt, and equity needed to
finance short- and long-term assets and meet equity requirements.
The 2023 PSAF is $23.7 million, compared with $19.4 million in
2022. The increase of $4.3 million is attributable to a net $2.6
million increase in the cost of capital, a $1.1 million increase in
sales tax due to inflation, and a $0.6 million increase in Board of
Governors expenses. The net $2.6 million increase in cost of capital is
primarily driven by a $2.0 million increase in return on equity imputed
to satisfy FDIC requirements of a well-capitalized institution and
rising interest rates resulting in a $1.2 million increase in cost of
debt.
The PSAF expense of $23.7 million, detailed in table 5, reflects
$11.6 million for capital funding, $6.8 million for BOG expense, and
$5.3 million in sales tax expense.
As shown in table 3, 2023 total assets of $805.6 million increased
by $15.5 million from 2022. The net increase in total assets reflects
and additional $25.2 million long-term assets partially offset by a net
$9.7 million decrease in short-term assets and imputed investments.
The net long-term asset increase of $25.2 million primarily
consists of a $25.1 million increase in the net pension asset,
reflecting higher plan contributions planned for 2022 and for 2023. In
addition to this, Bank premises, furniture and equipment, and software
and tenant improvement reflect a combined increase of $19.8 million as
a result of additional assets allocated to the priced services. The
decrease in the deferred tax asset is due to a change in the discount
rate.
The decrease in the short-term assets is primarily driven by a
$34.7 million decrease in the imputed investments in Treasury
securities from imputed equity required to meet FDIC capital
requirements for a well-capitalized institution and to comply with the
PSR policy, partially offset by a $10.0 million increase in imputed
investments in Fed Funds.
The capital structure of the 2023 pro forma balance sheet, provided
in table 4, is composed of equity of $69.5 million, or 13.9 percent of
the 2023 risk-weighted assets detailed in table 6, and no long-term
debt. The 2023 capital structure differs from that of 2022, which was
composed of $77.6 million of equity and no long-term debt. Provided in
table 5, the 2023 initially imputed equity required to fund assets and
meet the publicly traded firm model capital requirements is $1.0
million. As long-term assets are marginally greater than long-term
liabilities, long-term debt of $1.4 million was imputed at the observed
market ratio of 59.1 percent. To meet the FDIC capital requirements for
a well-capitalized institution, $1.4 million of imputed long-term debt
was substituted for equity, and additional equity of $48.9 million was
imputed to meet the FDIC capital requirements. The resulting $49.9
million total level of equity was not sufficient to satisfy the $69.5
million equity needed for the PSR policy requirements, and additional
equity of $19.7 million was imputed.
The net Accumulated Other Comprehensive loss is $640.8 million,
compared with $687.7 million in 2022. The $46.9 million increase is
primarily attributable to a higher discount rate. AOCI is in a net loss
position and does not reduce the total imputed equity required to fund
priced services assets or fulfill the FDIC equity requirements for a
well-capitalized institution.
Table 3--Comparison of Pro Forma Balance Sheets for Budgeted Federal Reserve Priced Services a
[Millions of dollars--projected average for year]
----------------------------------------------------------------------------------------------------------------
2023 2022 Change
----------------------------------------------------------------------------------------------------------------
Short-term assets:
Receivables................................................. $41.9 $39.0 $2.8
Inventory................................................... 0.2 0.4 (0.2)
Prepaid expenses............................................ 30.9 30.5 0.4
Items in process of collection \16\......................... 76.0 64.0 12.0
-----------------------------------------------
Total short-term assets................................. 148.9 133.9 15.1
Imputed investments: \17\
Imputed investment in Treasury Securities................... 67.2 101.9 (34.7)
Imputed investment in Fed Funds............................. 182.0 172.0 10.0
-----------------------------------------------
Total imputed investments............................... 249.2 273.9 (24.7)
Long-term assets:
Premises \18\............................................... 100.0 87.6 12.5
Furniture and equipment..................................... 54.2 51.9 2.3
Software and leasehold improvements......................... 69.9 64.8 5.1
Net pension asset........................................... 25.9 0.9 25.1
Deferred tax asset.......................................... 157.4 177.1 (19.7)
-----------------------------------------------
Total long-term assets.................................. 407.5 382.3 25.2
-----------------------------------------------
Total assets........................................ 805.6 790.1 15.5
===============================================
Short-term liabilities:
Deferred credit items....................................... 258.0 236.0 22.0
Short-term debt............................................. 47.0 21.6 25.3
Short-term payables......................................... 25.9 48.3 (22.3)
-----------------------------------------------
Total short-term liabilities............................ 330.9 305.9 25.1
Long-term liabilities:
Postemployment/postretirement benefits and net pension 405.2 406.6 (1.4)
liabilities \19\...........................................
-----------------------------------------------
Total liabilities....................................... 736.1 712.4 23.7
[[Page 79315]]
Equity \20\............................................. 69.5 77.6 (8.1)
-----------------------------------------------
Total liabilities and equity........................ 805.6 790.1 15.5
----------------------------------------------------------------------------------------------------------------
\a\ Calculations in this table and subsequent PSAF tables may be affected by rounding.
Table 4--Imputed Funding for Priced-Services Assets
[Millions of dollars]
------------------------------------------------------------------------
2023 2022
------------------------------------------------------------------------
A. Short-term asset financing:
Short-term assets to be financed:...
Receivables..................... $41.9 $39.0
Inventory....................... 0.2 0.4
Prepaid expenses................ 30.9 30.5
-------------------------------
Total short-term assets to be 72.9 69.9
financed...........................
Short-term payables............. 25.9 48.3
Net short-term assets to be financed 47.0 21.6
===============================
Imputed short-term debt financing 47.0 21.6
\21\...............................
B. Long-term asset financing:
Long-term assets to be financed:....
Premises........................ 100.0 87.6
Furniture and equipment......... 54.2 51.9
Software and Leasehold 69.9 64.8
Improvements...................
Net pension asset............... 25.9 0.9
Deferred tax asset.............. 157.4 177.1
-------------------------------
Total long-term assets to be 407.5 382.3
financed...........................
Postemployment/postretirement 405.2 406.6
benefits and net pension
liabilities....................
Net long-term assets to be 69.5 77.6
financed.......................
Imputed long-term debt \21\.....
Imputed equity \21\............. 69.5 77.6
===============================
Total long-term financing... 69.5 77.6
------------------------------------------------------------------------
Table 5--Derivation of the 2023 and 2022 PSAF
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
2023 2022
---------------------------------------------------------------
Debt Equity Debt Equity
----------------------------------------------------------------------------------------------------------------
A. Imputed long-term debt and equity:
Net long-term assets to finance............. $ 2.3 $ 2.3 $ (24.3) $ (24.3)
Capital structure observed in market........ 59.1% 40.9% 59.1% 40.9%
Pre-adjusted long-term debt and equity...... $ 1.4 $ 1.0 $ (14.3) $ (9.9)
Equity adjustments: \22\....................
Equity to meet capital requirements..... .............. 49.9 .............. 46.8
Adjustment to debt and equity funding (1.4) 1.4 (14.4) 14.4
given capital requirements \23\........
Adjusted equity balance................. .............. 2.3 .............. (24.3)
Equity to meet capital requirements \24\ .............. 47.5 .............. 71.1
---------------------------------------------------------------
Total imputed long-term debt and $ $ 49.9 $ $ 46.8
equity.............................
===============================================================
B. Cost of capital:
Elements of capital costs:..................
Short-term debt \25\.................... $ 47.0 x 2.6% $ 1.2 $ 21.6 x 0.1% $ 0.0
= =
Long-term debt \25\..................... - x 3.6% = .............. - x 3.4% = ..............
Equity \26\............................. 49.9 x 14.9% = 7.4 46.8 x 11.6% = 5.4
---------------- ---------------
.............. $ 8.7 .............. $ 5.4
C. Incremental cost of PSR policy:
[[Page 79316]]
Equity to meet policy....................... $ 19.7 x 14.9% $ 2.9 $ 30.8 x 11.6% $ 3.6
= =
---------------- ---------------
D. Other required PSAF costs:
Sales taxes................................. $ 5.3 .............. $ 4.2 ..............
Board of Governors expenses................. 6.8 .............. 6.2 ..............
---------------- ----------------
12.1 .............. 10.4
---------------- ---------------
$ 23.7 .............. $ 19.4
================ ===============
E. Total PSAF:
As a percent of assets...................... .............. 2.9% .............. 2.5%
As a percent of expenses.................... .............. 3.9% .............. 4.3%
F. Tax rates.................................... .............. 19.3% .............. 20.3%
----------------------------------------------------------------------------------------------------------------
Table 6--Computation of 2023 Capital Adequacy for Federal Reserve Priced Services
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Weighted
Assets Risk weight assets
----------------------------------------------------------------------------------------------------------------
Imputed investments:
1-Year Treasury securities \27\............................. $67.2 .............. $
Federal funds \28\.......................................... 182.0 0.2 36.4
-----------------------------------------------
Total imputed investments............................... 249.2 .............. 36.4
Receivables..................................................... 41.9 0.2 8.4
Inventory....................................................... 0.2 1.0 0.2
Prepaid expenses................................................ 30.9 1.0 30.9
Items in process of collection.................................. 76.0 0.2 15.2
Premises........................................................ 100.0 1.0 100.0
Furniture and equipment......................................... 54.2 1.0 54.2
Software and leasehold Improvements............................. 69.9 1.0 69.9
Pension asset................................................... 25.9 1.0 25.9
Deferred tax asset.............................................. 157.4 1.0 157.4
-----------------------------------------------
Total....................................................... 805.6 .............. 498.5
===============================================
Imputed equity:
Capital to risk-weighted assets............................. 13.9% .............. ..............
Capital to total assets..................................... 8.6% .............. ..............
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\16\ Credit float, which represents the difference between items
in process of collection and deferred credit items, occurs when the
Reserve Banks debit the paying bank for transactions before
providing credit to the depositing bank. Float is directly estimated
at the service level.
\17\ Consistent with the Board's PSR policy, the Reserve Banks'
priced services will hold an amount equivalent to six months of the
Fedwire Funds Service's current operating expenses as liquid net
financial assets and equity on the pro forma balance sheet. Six
months of the Fedwire Funds Service's projected current operating
expenses is $69.5 million. In 2023, $19.7 million of equity was
imputed to meet the regulatory capital requirements.
\18\ Includes the allocation of Board of Governors assets to
priced services of $2.7 million for 2023 and $2.1 million for 2022.
\19\ Includes the allocation of Board of Governors liabilities
to priced services of $1.3 million for 2023 and $1.3 million for
2022.
\20\ Includes an accumulated other comprehensive loss of $640.8
million for 2023 and $687.7 million for 2022, which reflects the
ongoing amortization of the accumulated loss in accordance with ASC
715. Future gains or losses, and their effects on the pro forma
balance sheet, cannot be projected. See table 5 for calculation of
requird imputed equity amount.
\21\ Imputed short-term debt financing is computed as the
difference between short-term assets and short-term liabilities. As
presented in table 5, the financing costs of imputed short-term
debt, imputed long-term debt and imputed equity are the elements of
cost of capital, which contribute to the calculation of the PSAF.
\22\ If minimum equity constraints are not met after imputing
equity based on the capital structure observed in the market,
additional equity is imputed to meet these constraints. The long-
term funding need was met by imputing long-term debt and equity
based on the capital structure observed in the market (see tables 4
and 6). In 2022, the amount of imputed equity met the minimum equity
requirements for risk-weighted assets.
\23\ Equity adjustment offsets are due to a shift of long-term
debt funding to equity in order to meet FDIC capital requirements
for well-capitalized institutions.
\24\ Additional equity in excess of that needed to fund priced
services assets is offset by an asset balance of imputed investments
in treasury securities.
\25\ Imputed short-term debt and long-term debt are computed at
table 4.
\26\ The 2023 ROE is equal to a risk-free rate plus a risk
premium (beta * market risk premium). The 2022 after-tax CAPM ROE is
calculated as 2.29% + (1.0 * 9.72%) = 12.02%. Using a tax rate of
19.3%, the after-tax ROE is converted into a pretax ROE, which
results in a pretax ROE of (12.02%/(1-19.3%)) = 14.88%. Calculations
may be affected by rounding.
\27\ If minimum equity constraints are not met after imputing
equity based on all other financial statement components, additional
equity is imputed to meet these constraints. Additional equity
imputed to meet minimum equity requirements is invested solely in
Treasury securities. The imputed investments are similar to those
for which rates are available on the Federal Reserve's H.15
statistical release, which can be located at <a href="http://www.federalreserve.gov/releases/h15/data.htm">http://www.federalreserve.gov/releases/h15/data.htm</a>.
\28\ The investments are imputed based on the amounts arising
from the collection of items before providing credit according to
established availability schedules.
---------------------------------------------------------------------------
[[Page 79317]]
C. Check Services--Table 7 shows the 2021 actual, 2022 forecasted,
and 2023 budgeted cost-recovery performance for commercial check
services.
Table 7--Check Services Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Year Revenue Total expense Net income Targeted roe after targeted
(roe) roe
1 2 3 4 5
[1-2] [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)................... 109.9 105.4 4.5 1.1 103.2
2022 (forecast)................. 110.6 109.1 1.5 1.0 100.4
2023 (budget)................... 108.2 106.7 1.5 1.3 100.1
----------------------------------------------------------------------------------------------------------------
1. 2022 Forecast--The Reserve Banks forecast that check services
will recover 100.4 percent of total expenses and targeted ROE, compared
with a 2022 budgeted recovery rate of 97.1 percent.
Through August, total commercial forward and total commercial
return check volumes were 6.4 percent lower and 18.8 percent greater,
respectively, than they were during the same period last year. For
full-year 2022, the Reserve Banks estimate that their total forward
check volume will decline 7.0 percent (compared with a budgeted decline
of 7.4 percent) and their total return check volume will increase 12.7
percent (compared with a budgeted decline of 10.2 percent) from 2021
levels. The Reserve Banks expect that check volumes will continue to
decline, although uncertainty remains as to the rate of decline into
2023.\29\ In particular, the Reserve Banks' check volumes are expected
to decline because of substitution away from checks to other payment
instruments.
---------------------------------------------------------------------------
\29\ Return rates (as a percentage of forward volume) dropped
dramatically in 2020 and 2021, likely because of the three rounds of
Economic Impact Payments (EIPs) and other federal and state programs
in response to the pandemic. Reserve Banks expected these lower
rates to continue in 2022, but instead have seen return rates
relative to forward volume revert to pre-Covid levels.
---------------------------------------------------------------------------
2. 2023 Pricing--The Reserve Banks expect check services to recover
100.1 percent of total expenses and targeted ROE. The Reserve Banks
project revenue to be $108.2 million, a decline of $2.4 million, or 2.2
percent from the 2022 forecast. Total expenses for check services are
projected to be $106.7, a decrease of $2.4 million, or 2.2 percent,
from 2022 forecasted expenses.
The Reserve Banks will increase the pricing tiers for the fixed
monthly participation fee. In light of the ongoing volume declines and
growing costs related to check processing infrastructure, the changes
are intended to continue to support revenue stability through fixed
fees while minimizing the impact of fee increases on smaller
institutions, taking into account higher system utilization costs
associated with higher volumes from larger institutions. Table 8 shows
the 2023-tiered participation fees.
---------------------------------------------------------------------------
\30\ This fee is charged to financial institutions that have
received any Check 21 electronic or substitute check volume (forward
or return) from the Reserve Banks during the month. The fee is
applied at the parent financial institution level, as defined in the
Reserve Banks' Global Customer Directory. Each financial
institution's tier assignment is determined by the criteria
described in the FedForward Standard Endpoint Tier Listing.
Table 8--Check 21 Participation Fee Structure
------------------------------------------------------------------------
Monthly
Tier \30\ fee
------------------------------------------------------------------------
1........................................................... $325.00
2........................................................... 200.00
3........................................................... 130.00
4........................................................... 75.00
------------------------------------------------------------------------
The Reserve Banks will increase FedReceipt[supreg] Premium Delivery
Fees for the 8:00 a.m. ET target by $0.005, from $0.032 to $0.037, for
the 10:00 a.m. local target by $0.002, from $0.020 to $0.022, and for
the noon local target by $0.001, from $0.015 to $0.016. The Reserve
Banks will increase Reject Repair fees for both basic and premium users
by $0.05.
Additionally, the Reserve Banks will adopt a combination of fixed
and variable pricing changes to legacy products and services. These
changes are a continuation of targeting products that are in the later
stages of the product life cycle to encourage customers to use modern
services. First, the Reserve Banks will increase all FedImage[supreg]
product fees 10 percent and sunset eight services that are no longer
used or minimally used.\31\ Second, the Reserve Banks will increase
cash letter fees for forward Canadian Check Clearing for U.S. funds and
Canadian funds by $2.00 (13 percent) and per-item fees by $0.50 (9
percent), Canadian Amount Encoding per-item fees by $0.35 (21 percent),
Foreign GBP and EURO per-item fees by $3.00 (14 percent), Foreign All
Other per-item fees by $3.00 (14 percent), Foreign Collection per-item
fees by $7.00 (8 percent), and the Mixed Forward Products cash letter
fees by $2.00 (13 percent) and per-item fees by $0.50 (12 percent).
Lastly, the Reserve Banks will increase per-item return paper fees for
Large Dollar Return Item Notification (LDRIN) via the FedLine Web
access solution by $0.50 (12 percent), Return Item Reclear cash letter
fees by $1.00 (10 percent) and per-item fees by $0.05 (5.0 percent to
7.0 percent depending on dollar value levels), Qualified and
Unqualified Return Item cash letter fees by $2.00 (13 percent) and per-
item fees by $1.00 (14 percent), and the Return Item Qualification per-
item fee by $1.75 (21 percent).
---------------------------------------------------------------------------
\31\ The following FedImage Services will be discontinued: image
capture + 7 business day archive, image capture on-us surcharge,
dual archive (transition period up to 120 days), extended dual
archive (more than 120 days), reoccurring request retrievals to
email via FedLine web, CD-ROM--tape, CD-ROM selected accounts
service-RAID, and information retrieval--FedLine (non-image).
---------------------------------------------------------------------------
As check volumes continue to decline, the proposed pricing
increases are intended to help stabilize check revenues, to shift the
revenue mix toward fixed fees, and to continue a value-based pricing
strategy for financial institutions that use the services.
The Reserve Banks estimate the above price changes, along with an
expected decrease in volume, will result in an overall 4.5 percent
average price increase for check services' customers.
The Reserve Banks' primary risk to current projections for check
services is
[[Page 79318]]
a greater-than-expected decline in check volume due to the general
reduction in check writing and competition from correspondent banks,
aggregators, and direct exchanges, which would result in lower-than-
anticipated revenue.
D. FedACH[supreg] Services--Table 9 shows the 2021 actual, 2022
forecasted, and 2023 budgeted cost-recovery performance for commercial
FedACH Services.
Table 9--FedACH Services Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Year Revenue Total expense Net income Targeted roe after targeted
(roe) roe
1 2 3 4 5
[1-2] [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)................... 165.7 167.5 (1.7) 1.7 98.0
2022 (forecast)................. 173.1 167.6 5.5 1.5 102.3
2023 (budget)................... 178.6 175.2 3.5 2.2 100.7
----------------------------------------------------------------------------------------------------------------
1. 2022 Forecast--The Reserve Banks forecast that FedACH Services
will recover 102.3 percent of total expenses and targeted ROE, compared
with a budgeted recovery rate of 100.4 percent.
Through August, FedACH commercial origination and receipt volume
was 3.9 percent higher than it was during the same period last year.
For the full year 2022, the Reserve Banks estimate that FedACH
commercial origination and receipt volume will increase 2.9 percent
from 2021 levels, compared with a 2021 budgeted increase of 4.9
percent.
2. 2023 Pricing--The Reserve Banks expect FedACH Services to
recover 100.7 percent of total expenses and targeted ROE in 2023. The
Reserve Banks project revenue to be $178.6 million, an increase of $5.5
million, or 3.2 percent, from the 2022 forecast. Total expenses are
projected to be $175.2 million, an increase of $7.6 million, or 4.5
percent, from the 2022 forecast.
The Reserve Banks will add a new fifth tier to the ACH Receipt
Discount offered to Premium Receiver customers at a volume threshold of
30 million items per month. The new discount tier increases the current
highest discount by $0.0003 to $0.0023 per-item for Premium Receivers,
Level One and to $0.0024 per-item for Premium Receivers, Level Two.\32\
---------------------------------------------------------------------------
\32\ Premium Receivers, Level One: RDFIs receiving through
FedACH at least 90 percent of their FedACH-originated items, but
less than 90 percent of all of their ACH items originated through
any operator. Premium Receivers, Level Two: RDFIs receiving through
FedACH at least 90 percent of all of their ACH items originated
through any operator.
---------------------------------------------------------------------------
The Reserve Banks will increase the monthly ACH Participation Fee
from $65 to $75 per RTN per month. In addition, the Reserve Banks will
introduce a tiered ACH Settlement Fee structure with fees ranging from
$60 to $200 per RTN per month based on Premium Receiver status.\33\
Over the past years, the Reserve Banks have made minimal changes to
existing FedACH Participation and Settlement Fees.\34\ The price
changes are driven by ongoing operational costs and increased costs
associated with introducing three additional intraday settlement
windows to FedACH, and reflect higher utilization costs associated with
higher volumes.
---------------------------------------------------------------------------
\33\ Premium Receivers will be subject to a settlement fee of
$60 per RTN per month. Non-Premium Receivers with a volume threshold
of less than 1,500,000 items per month will be subject to a
settlement fee of $100 per RTN per month. Non-Premium Receivers with
a volume threshold of more than 1,500,000 items per month will be
subject to a settlement fee of $200 per RTN per month.
\34\ The last increase to the FedACH Participation Fee was in
2018, from $58 to $65, or 12 percent. The last increase to the
FedACH Settlement Fee was in 2014, from $50 to $55, or 10 percent.
---------------------------------------------------------------------------
The Reserve Banks will increase the monthly FedACH Information File
Extract Fee from $150 to $180 per month. In addition, the Reserve Banks
will increase the IAT File Fee from $75 to $150 per month, and the
FedACH Risk[supreg] Package Fees approximately 20 percent depending on
the tier. The price changes reflect ongoing technology investments and
infrastructure enhancements along with minimal price increases for
these value-added services in previous years.\35\
---------------------------------------------------------------------------
\35\ The last increase to the FedACH Information File Extract
Fee was in 2017, from $100 to $150. The last increase to the IAT
File Fee was in 2012, from $50 to $75. The FedACH Risk Package Fee
has not been increased since it was first introduced in 2013.
---------------------------------------------------------------------------
The Reserve Banks will modify the existing FedACH Exception
Resolution Service fee structure and introduce a monthly fee tiered by
usage and consolidated at the parent Depository Financial Institution
level. Fees will range from $20 to $500 depending on monthly case
volume count. The new tiered fee structure will simplify the current
pricing structure by replacing existing fixed monthly and variable per
case fees.
The Reserve Banks estimate the above price changes will result in a
4.4 percent average price increase for FedACH customers.
The Reserve Banks will continue to assess pricing strategies that
balance price stability with ongoing investments in system
enhancements, while responding to economic and market dynamics. The
Reserve Banks' primary risks to current projections for FedACH Services
are unanticipated cost overruns associated with continued technology
and resiliency investments, and lower-than-projected volumes and growth
due to the market and economic environment.
E. Fedwire[supreg] Funds Service and National Settlement Service--
Table 10 shows the 2021 actual, 2022 forecasted, and 2023 budgeted
cost-recovery performance for the Fedwire Funds Service and the
National Settlement Service.
[[Page 79319]]
Table 10--Fedwire Funds Service and National Settlement Service Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Year Revenue Total expense Net income Targeted roe after targeted
(roe) roe
1 2 3 4 5
[1-2] [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)................... 152.7 153.4 (0.7) 1.5 98.6
2022 (forecast)................. 161.7 158.7 3.0 4.3 99.2
2023 (budget)................... 164.4 164.0 0.4 4.3 97.7
----------------------------------------------------------------------------------------------------------------
1. 2022 Forecast--The Reserve Banks forecast that the Fedwire Funds
Service and the National Settlement Service will recover 99.2 percent
of total expenses and targeted ROE, compared with a budgeted recovery
rate of 100.3 percent.
Through August, Fedwire Funds Service online volume was 1.4 percent
lower than it was during the same period last year. For full-year 2022,
the Reserve Banks estimate that Fedwire Funds Service online volume
will increase 0.1 percent from 2021 levels, compared with the 12.9
percent volume increase that had been budgeted. Through August, the
National Settlement Service settlement file volume was 2.9 percent
higher than it was during the same period last year, and settlement
entry volume was 1.4 percent higher. For full-year 2022, the Reserve
Banks estimate that settlement file volume will increase 1.1 percent
(compared with a budgeted decrease of 3.1 percent) and settlement entry
volume will decrease 0.1 percent from 2021 levels (compared with a
budgeted 2.6 percent decrease).
2. 2023 Pricing--The Reserve Banks expect the Fedwire Funds Service
and the National Settlement Service to recover 97.7 percent of total
expenses in 2023. Revenue is projected to be $164.4 million, an
increase of 1.7 percent from the 2022 forecast. The Reserve Banks
project total expenses to be approximately $5.3 million higher than
2022 expenses, an increase of 3.3 percent, primarily reflecting ongoing
technology investments, including those associated with the Fedwire
Funds Service's transition to the ISO[supreg] 20022 messaging
format.\36\ In addition, the National Settlement Service incurred
higher costs in 2022 because of the expansion of its operating
hours.\37\
---------------------------------------------------------------------------
\36\ In October 2021, the Board announced that the Federal
Reserve Banks will adopt the ISO 20022 message format for the
Fedwire[supreg] Funds Service. See New Message Format for the
Fedwire Funds Services, 86 FR 55600 (June 27, 2022). Available at
Federal Register Notice: New Message Format for the Fedwire Funds
Service (<a href="http://federalreserve.gov">federalreserve.gov</a>).
\37\ The National Settlement Service expanded its hours to 21.5
hours per day in 2022, with a new 9:00 p.m. ET open for the next
business day.
---------------------------------------------------------------------------
The Reserve Banks will increase all three of the gross origination
and receipt tiered fees. The tier 1 fee will increase from $0.88 to
$0.92, the tier 2 fee will increase from $0.255 to $0.285, and the tier
3 fee will increase from $0.17 to $0.18. In addition, the offline send
and receive surcharge for the Fedwire Funds Service will increase from
$70.00 to $75.00. The Reserve Banks estimate the above price changes
will result in an overall 8.3 percent average price increase for
Fedwire Funds Service customers.
The Reserve Banks will not change National Settlement Service fees
for 2023.
The Reserve Banks' primary risk to current projections for these
services is uncertainty about the economic outlook for 2023, which
complicates the accuracy of 2023 volume projections. Historically,
Fedwire Funds Service volume has reflected market conditions, and a
broader downturn in 2023 would likely result in a decrease in Fedwire
Funds Service volume.\38\ Separately, unexpected increases in 2023
technology costs would likely result in reduced cost recovery for the
year.
---------------------------------------------------------------------------
\38\ Fedwire Funds Service volume growth reflects economic
growth. For example, its volume has grown every year except for 2008
and 2009, when it contracted 2.5 percent and 5.0 percent,
respectively, during the Great Recession. For historical Fedwire
Funds Service volume data, see <a href="http://frbservices.org">frbservices.org</a>, ``Fedwire Funds
Service--Annual Statistics. Available at: <a href="https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html">https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html</a>.
---------------------------------------------------------------------------
F. Fedwire Securities Service--Table 11 shows the 2021 actual, 2022
forecast, and 2023 budgeted cost-recovery performance for the Fedwire
Securities Service.\39\
---------------------------------------------------------------------------
\39\ The Reserve Banks provide transfer services for securities
issued by the U.S. Treasury, federal government agencies,
government-sponsored enterprises, and certain international
institutions. The priced component of this service, reflected in
this memorandum, consists of revenues, expenses, and volumes
associated with the transfer of all non-Treasury securities. For
Treasury securities, the U.S. Treasury assesses fees for the
securities transfer component of the service. The Reserve Banks
assess a fee for the funds settlement component of a Treasury
securities transfer; this component is not treated as a priced
service.
Table 11--Fedwire Securities Service Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Year Revenue Total expense Net income Targeted roe after targeted
(roe) roe
1 2 3 4 5
[1-2] [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)................... 27.7 26.5 1.2 0.2 103.8
2022 (forecast)................. 24.7 22.6 2.1 0.2 108.4
2023 (budget)................... 44.5 40.3 4.3 0.5 109.3
----------------------------------------------------------------------------------------------------------------
[[Page 79320]]
1. 2022 Forecast--The Reserve Banks forecast that the Fedwire
Securities Service will recover 108.4 percent of total expenses and
targeted ROE, compared with a 2022 budgeted recovery rate of 149.4
percent.
For full-year 2022, volume for account maintenance is expected to
decline from 2021 levels, while volumes for issue maintenance are
expected to increase modestly from 2021 levels. Through August, account
maintenance volume was 2.9 percent lower than it was during the same
period last year. For full-year 2022, the Reserve Banks estimate that
account maintenance volume will decline 3.2 percent from 2021 levels,
compared with a budgeted decline of 4.6 percent. Through August, the
number of agency issues maintained was 2.0 percent higher than it was
during the same period last year. For full-year 2022, the Reserve Banks
estimate that the number of agency issues maintained will increase 2.2
percent from 2021 levels, compared with a budgeted decline of 0.6
percent.
2. 2023 Pricing--The Reserve Banks expect the Fedwire Securities
Service to recover 109.3 percent of total expenses and targeted ROE in
2023. Revenue is projected to be $44.5 million, an increase of 80.2
percent from the 2022 revenue forecast. The Reserve Banks also project
that 2023 expenses will increase by $17.7 million from the 2022
forecast, an increase of 78.3 percent.
The Reserve Banks project that agency transfer volume will remain
relatively stable compared with previous years, with no notable changes
that could potentially have a significant impact on agency transfers.
The volume of Treasury security transfers is projected to increase
because of anticipated growth of public debt. The volume of accounts
maintained are expected to decrease 3.0 percent, consistent with recent
trends and primarily driven by a reduction in joint custody accounts.
The volume of agency issues maintained is expected to remain relatively
flat, driven by expectations that security holdings will become
increasingly concentrated and the volume of MBS CUSIPs on priced
Securities Accounts will continue to increase. Claim adjustment volume
is expected to increase with enhancements to the ACAP product. The
Reserve Banks will decrease the agency transfer fee, the Treasury
transfer fee, and the issue maintenance fee from $0.77 to $0.61 as part
of a strategic transition to more accurately align costs across product
offerings and to adjust for the large over-recovery in 2022.
In response to direction from the U.S. Department of the Treasury,
the Reserve Banks will offer to participants the transfer and
settlement of marketable Treasury bills, notes, and bonds over the
Fedwire Securities Service as a priced service effective January 3,
2023. This will align the Reserve Banks' treatment of transfer and
settlement of Treasury securities with its treatment of transfer and
settlement of non-Treasury securities.\40\
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\40\ Currently, the Reserve Banks provide transfer services for
Treasury securities as fiscal agent on behalf of the U.S. Department
of the Treasury. Fees related to transfers of Treasury securities
are set by the U.S. Department of the Treasury and collected by the
Reserve Banks. The fees are then remitted to the U.S. Department of
the Treasury by the Reserve Banks. The U.S. Department of the
Treasury currently reimburses the Reserve Banks for the associated
costs.
---------------------------------------------------------------------------
Following the transition of transfer services for Treasury
securities to a priced service, the Reserve Banks will set, charge,
collect, and retain fees from customers for transfers of Treasury
securities, obviating the need for remittance to and reimbursement from
the U.S. Department of the Treasury.
As part of the ACAP enhancements, the Reserve Banks are introducing
several changes to ACAP pricing.
First, the Reserve Banks will introduce the pricing of applicable
claim adjustments on newly ACAP-eligible security types, Treasury
securities, and non-Treasury debt securities, as part of the
implementation of the ACAP enhancement project in 2023. The ACAP
enhancements will add a new claim type, Securities Lending, to the
existing claim adjustments. This change will result in an extension of
the pricing schedule to Securities Lending claim adjustments for MBS,
Treasury, and non-Treasury debt securities.
Further, the Reserve Banks will expand the existing ACAP's pricing
schedule to include Repo Tracking Indicators and Repo Position
Maintenance fees, and once available, to Securities Lending Tracking
Indicators and Securities Lending Position Maintenance fees.
The Reserve Banks estimate the above price changes will result in
an overall 17.3 percent average price decrease for Fedwire Funds
Service customers.
The Reserve Banks' primary risks to current projections for the
Fedwire Securities Service include variations in technology costs and
product volume forecasts stemming from an uncertain economic outlook.
G. FedNow Service
1. 2022 Forecast--The Reserve Banks did not estimate FedNow Service
recovery of total expenses and targeted ROE because it will not be
operational until mid-2023.
2. 2023 Pricing--The Reserve Banks will introduce a fee schedule
for the FedNow Service that includes both per-item and fixed fees. This
represents the initial fee schedule for the service, and the Reserve
Banks expect that the fee schedule will change as the service matures.
To limit prohibitively high or unnecessarily volatile prices, fees
are based on transaction costs associated with mature volume estimates,
inclusive of PSAF related expenses. This approach is similar to how the
Reserve Banks have set fees for new services in the past.\41\ The
proposed fee schedule also reflects the Federal Reserve's assessment of
prevailing market practices among instant payments operators.
Additionally, as described in greater detail below, the FedNow Service
will discount certain fees to $0.00 in 2023. This approach is in
alignment with the Board's Pricing Principles and will support the
Board's policy objective of nationwide access to instant payments.\42\
---------------------------------------------------------------------------
\41\ In establishing fees for the Federal Reserve's ACH service,
the Board allowed fees to be set to recover costs associated with
mature volume estimates instead of current costs. As part of setting
fees following the passage of the MCA in 1980, the Federal Reserve
published a specific year that it expected ACH to achieve annual
cost recovery. At that time, FedACH had been in operation for more
than a decade, giving the Federal Reserve the ability to estimate
costs and revenues with relative confidence. Performing a similar
exercise for the FedNow Service would not be feasible in the short
term because of the lack of historical data. See Board of Governors
of the Federal Reserve System, ``Adoption of Fee Schedules and
Pricing Principles for Federal Reserve Bank Services,'' 46 FR 1338,
1343 (Jan. 6, 1981). Available at: <a href="https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf">https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf</a>.
\42\ This approach is consistent with the Board's Pricing
Principles. Specifically, in adopting principle 7, the Board
explained that pricing flexibility may be necessary to induce
desirable long-run changes in the payment system and to foster
development of services that will ultimately benefit the public. See
``Policies: The Federal Reserve in the Payments System,'' (January
2001). Available at: Federal Reserve Board--Policies: The Federal
Reserve in the Payments System.
---------------------------------------------------------------------------
The Reserve Banks will introduce a per-item fee of $.045 that is
charged to the FedNow Sender for each customer credit transfer (CCT)
and CCT return.\43\ These fees will only be charged for messages that
are accepted by the FedNow Receiver and settled over the service.\44\
CCTs up to 2,500 transactions
[[Page 79321]]
per RTN per month will be discounted to $0.00 in 2023.
---------------------------------------------------------------------------
\43\ Operating Circular (OC) 8 defines a FedNow Sender as a
FedNow Participant that sends a payment order through the FedNow
Service. ``Operating Circular 8,'' (September 21, 2022). Available
at: Operating Circular No. 8--Funds Transfers through the FedNow
Service (<a href="http://frbservices.org">frbservices.org</a>).
\44\ OC 8 defines a FedNow Receiver as a FedNow Participant that
receives a payment order or Request for Confirmation through the
FedNow Service. See ``Operating Circular 8,'' (September 21, 2022).
Available at: Operating Circular No. 8--Funds Transfers through the
FedNow Service (<a href="http://frbservices.org">frbservices.org</a>).
---------------------------------------------------------------------------
The Reserve Banks will introduce a $25 monthly participation fee,
discounted to $0.00 per month in 2023, for every routing transit number
(RTN) enrolled in the service. The participation fee will only be
charged to RTNs that are able to receive CCTs (Send & Receive or
Receive-only participation types). The participation fee will not be
charged to Liquidity Management Transfer (LMT) only and Settlement-only
participation types in 2023.\45\
---------------------------------------------------------------------------
\45\ For more information on FedNow participation types, see
``FedNow features: flexible participation types,'' (April 27, 2021).
Available at: <a href="https://www.frbservices.org/financial-services/fednow/blog/fednow-features-flexible-participation-types.html">https://www.frbservices.org/financial-services/fednow/blog/fednow-features-flexible-participation-types.html</a>.
---------------------------------------------------------------------------
The Reserve Banks will introduce a fee of $0.01 that is charged to
the FedNow Participant for each request for payment (RFP) message that
is completed or received by a financial institution with RFP receipt
enabled.\46\ RFP messages sent to a financial institution that is not
enabled for receipt of RFP will not be assessed the fee, since those
messages will not be completed. The fee will be charged regardless of
whether the RFP is answered with a CCT.
---------------------------------------------------------------------------
\46\ A FedNow Participant that sends an RFP message can request
either a CCT or a CCT return in response to the message.
---------------------------------------------------------------------------
The Reserve Banks will introduce a fee of $1.00 that is charged to
the FedNow Sender for each liquidity management transfer settled over
the FedNow Service. Although not currently under consideration, a
separate, fixed fee related to LMT use may introduced in the future.
Changes to the LMT per-item fee will also be under consideration as LMT
activity evolves. Per the 2020 Notice related to the FedNow Service,
LMT is designed to support liquidity needs related to instant payments
activity more broadly.\47\
---------------------------------------------------------------------------
\47\ LMT will enable participants in the FedNow Service to
transfer funds to one another to support liquidity needs related to
payment activity in the FedNow Service. LMT will also support
participants in a private-sector instant payment service backed by a
joint account at a Reserve Bank by enabling transfers between the
master accounts of participants and a joint account. See ``Service
Details on Interbank Actions to Support Interbank Settlement of
Instant Payments,'' 85 FR 48522, (August 11 2020). Available here:
<a href="https://www.govinfo.gov/content/pkg/FR-2020-08-11/pdf/2020-17539.pdf">https://www.govinfo.gov/content/pkg/FR-2020-08-11/pdf/2020-17539.pdf</a>.
---------------------------------------------------------------------------
H. FedLine Solutions--The Reserve Banks charge fees for the
electronic connections that financial institutions use to access priced
services and allocate the costs and revenues associated with this
electronic access to the priced services.\48\ There are six FedLine
channels through which customers can access the Reserve Banks' priced
services: FedMail[supreg], FedLine Exchange[supreg], FedLine
Web[supreg], FedLine Advantage[supreg], FedLine Command[supreg] and
FedLine Direct[supreg].\49\ The Reserve Banks bundle these channels
into eleven FedLine packages, described below, that are supplemented by
a number of premium (or [agrave] la carte) access and accounting
information options. In addition, the Reserve Banks offer FedComplete
packages, which are bundled offerings of FedLine connections and a
fixed number of FedACH Services, Fedwire Funds Service, and Check 21-
enabled transactions.
---------------------------------------------------------------------------
\48\ FedLine Solutions provide customers with access to Reserve
Bank priced services. As such, FedLine costs and revenue are
allocated to the Reserve Banks' priced services on an expense ratio
basis.
\49\ FedMail, FedLine Exchange, FedLine Web, FedLine Advantage,
FedLine Command, and FedLine Direct are registered trademarks of the
Federal Reserve Banks.
---------------------------------------------------------------------------
Eight attended-access packages offer manual access to critical
payment and information services via a web-based interface. The FedMail
package provides access to basic information services via email, while
the two FedLine Exchange packages are designed to provide certain
services, such as the E-Payments Routing Directory, to customers that
otherwise do not use FedLine for any payment services. Two FedLine Web
packages offer online attended access to a range of services, including
cash services, FedACH information services, and check service. Three
FedLine Advantage packages expand upon the FedLine Web packages and
offer attended access to critical transactional services: FedACH,
Fedwire Funds, and Fedwire Securities. FedLine Advantage will also
offer attended access to the FedNow Service when it is operational.
Three unattended access packages are computer-to-computer, internet
protocol (IP)-based interfaces. The FedLine Command package offers an
unattended connection to FedACH, most accounting information services,
and the FedNow Service when it is made available. The two remaining
options are FedLine Direct packages, which allow for unattended
connections at multiple connection speeds to Check, FedACH, Fedwire
Funds, and Fedwire Securities transactional and information services
and to most accounting information services. FedLine Direct packages
will also allow for unattended connection to the FedNow Service.
The Reserve Banks propose to increase the monthly fees for the
FedMail Email Service from $60 to $85, and for FedMail Subscribers from
$15 to $25. To provide an incentive for current customers to move to
alternatives such as FedLine Web, the Reserve Banks propose to
introduce a monthly fee assessment for the FedMail Fax Service of $200
beginning in 2023. The Reserve Banks propose to discontinue the FedMail
Fax Service by December 31, 2023. The FedMail Fax Service is available
[agrave] la carte for all FedLine Solutions access packages, and
FedMail Email Service is available [agrave] la carte only for FedLine
Web or higher packages.\50\ The Reserve Banks seek not only to provide
highly secure, modern access solutions, but also to enhance the
customer experience through access to value-added services not
available on legacy technology. Delivery of financial services
information, such as transaction advices, accounting reports, and other
statements over fax and email, does not align with industry best
practices and poses potential risks to the confidentiality of customer
information.
---------------------------------------------------------------------------
\50\ In 2018, the Board of Governors approved a proposal to
cease onboarding of new subscribers to the FedMail Fax Service
effective January 1, 2019.
---------------------------------------------------------------------------
The Reserve Banks propose to update all existing FedComplete 100
and 200 packages. The Reserve Banks propose to increase the monthly fee
for FedComplete Advantage Plus from $825 to $900, FedComplete 100
Advantage Premier from $900 to $975, FedComplete 200 Advantage Plus
from $1,350 to $1,425, and FedComplete 200 Advantage Premier from
$1,425 to $1,500. The Reserve Banks propose to discontinue offering
FedComplete 100 Plus and FedComplete 200 Command Plus. The proposed
price increase aligns with the increase to the Check Monthly
Participation fee, FedACH participation and settlement fees, and
Fedwire Funds Service fees in alignment with fee changes in this
notice. The Reserve Banks are discontinuing FedComplete 100 Command
Plus and 200 Command Plus because of low demand, no new customers being
onboarded, and a need to streamline offerings to reduce complexity of
service and billing.
The Reserve Banks propose to introduce a monthly fee assessment of
$400 for legacy VPN devices to customers who have not started the
migration by October 1, 2023. VPN devices are a key component of a
customer's FedLine Advantage and FedLine Command connections to
critical payment and informational services. The purpose of this
monthly fee assessment is to support the timely
[[Page 79322]]
completion of the Next Generation Access Solution (NGAS) Virtual
Private Network (VPN) migration. As part of the Federal Reserve Banks'
ongoing modernization efforts, all customers are required to convert
their VPN devices by the end of 2023.
In addition, the Reserve Banks propose that use of a wide area
network (WAN) connection for priced services will be associated with,
and billed in accordance with, FedLine Direct package fees.\51\ As the
Reserve Banks support current customers and prepare to launch new
services, the FedLine Direct network continues to be the premier
solution, with added resiliency, greater security, active monitoring,
dedicated bandwidth, and consistent operational support.\52\ The
Reserve Banks estimate the above price changes will result in a 4.0
percent average price increase for FedLine customers.
---------------------------------------------------------------------------
\51\ In 2019, a redesign of the FedLine Direct product offering
was approved, introducing new package and pricing options that
affected all FedLine Direct, Check 21 Large File Delivery, and other
FedLine Command or FedLine Advantage customers that use a WAN
connection.
\52\ The Reserve Banks are preparing to deliver services to the
industry via Application Programming Interfaces (API). APIs are a
set of protocols for connecting software systems programmatically,
enabling system-to-system interoperability. Communication will be
forthcoming on timing and availability of initial APIs.
---------------------------------------------------------------------------
Finally, for financial institutions that plan to adopt the FedNow
Service in 2023, the Reserve Banks will discount certain FedLine fees
to $0.00 to support testing activities and streamlined onboarding
processes.\53\ More detail regarding discounted FedLine fees will be
shared through existing Reserve Bank channels closer to FedNow Service
introduction.
---------------------------------------------------------------------------
\53\ Monthly fees for a new VPN device or WAN device to support
FedNow Service activity will be discounted to $0.00 in 2023. Fees to
set up a new FedLine Solution for the FedNow Service will be
discounted to $0.00. Finally, new subscribers that the financial
institution adds to support FedNow Service access will not
contribute toward the fee for a FedLine Subscriber 5-Pack.
---------------------------------------------------------------------------
II. Analysis of Competitive Effect
All operational and legal changes considered by the Board that have
a substantial effect on payment system participants are subject to the
competitive impact analysis described in the March 1990 policy ``The
Federal Reserve in the Payments System.'' \54\ Under this policy, the
Board assesses whether changes would have a direct and material adverse
effect on the ability of other service providers to compete effectively
with the Federal Reserve in providing similar services because of
differing legal powers or constraints or because of a dominant market
position deriving from such legal differences. If any proposed changes
create such an effect, the Board must further evaluate the changes to
assess whether the benefits associated with the changes--such as
contributions to payment system efficiency, payment system integrity,
or other Board objectives--can be achieved while minimizing the adverse
effect on competition.
---------------------------------------------------------------------------
\54\ Federal Reserve Regulatory Service (FRRS) 9-1558.
---------------------------------------------------------------------------
The 2023 fees, fee structures, and changes in service will not have
a direct and material adverse effect on the ability of other service
providers to compete effectively with the Reserve Banks in providing
similar services. The Reserve Banks expect to continue to achieve
aggregate long-run cost recovery across all mature priced services.
III. 2023 Fee Schedules
FedACH Services 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
FedACH minimum monthly fee:
Originating depository financial institution $50.00.
(ODFI) \55\.
Receiving depository financial institution $40.00.
(RDFI) \56\.
Origination (per item or record):
Forward or return items..................... $0.0035.
SameDay Service--forward item \57\.......... $0.0010 surcharge.
Addenda record.............................. $0.0015.
FedLine Web-originated returns and $0.50.
notification of change (NOC) \58\.
Facsimile Exception Return/NOC \59\......... $45.00.
SameDay Exception Return.................... $45.00.
Automated NOC............................... $0.20.
Volume discounts (based on monthly billed
origination volume) \60\ per item when
origination volume is:.
750,001 to 1,500,000 items per month $0.0008.
discount.
more than 1,500,000 items per month $0.0010.
discount.
Volume discounts (based on monthly billed
receipt volume) \61\ per item when receipt
volume is:.
10,000,001 to 15,000,000 items per month $0.0002.
discount.
more than 15,000,000 items per month $0.0003.
discount.
Receipt (per item or record):
Forward Item................................ $0.0035.
Return Item................................. $0.0075.
Addenda record.............................. $0.0015.
Volume discounts:...........................
Non-Premium Receivers \62\ per item when
volume is:.
750,001 to 12,500,000 items per $0.0017 discount.
month \63\.
more than 12,500,000 items per month $0.0019 discount.
\64\.
Premium Receivers, Level One \65\ per
item when volume is:.
750,001 to 1,500,000 items per month $0.0017 discount.
\66\.
1,500,001 to 2,500,000 items per $0.0017 discount.
month \64\.
2,500,001 to 12,500,000 items per $0.0018 discount.
month \64\.
more than 12,500,000 items per month $0.0020 discount.
\64\.
more than 30,000,000 items per month $0.0023 discount.
\64\.
Premium Receivers, Level Two \67\ per
item when volume is:.
750,001 to 1,500,000 items per month $0.0017 discount.
\68\.
1,500,001 to 2,500,000 items per $0.0017 discount.
month \64\.
2,500,001 to 12,500,000 items per $0.0019 discount.
month \64\.
more than 12,500,000 items per month $0.0021 discount.
\64\.
more than 30,000,000 items per month $0.0024 discount.
\64\.
------------------------------------------------------------------------
[[Page 79323]]
FedACH Services 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
FedACH Risk Management Services: \69\
Monthly Package Fee (a single fee based on
total number of criteria sets):.
For up to 5 criteria sets............... $45.00.
For 6 through 11 criteria sets.......... $85.00.
For 12 through 23 criteria sets......... $150.00.
For 24 through 47 criteria sets......... $180.00.
For 48 through 95 criteria sets......... $300.00.
For 96 through 191 criteria sets........ $510.00.
For 192 through 383 criteria sets....... $810.00.
For 384 through 584 criteria sets....... $1,025.00.
For more than 584 criteria sets......... $1,325.00.
Batch/Item Monitoring (based on total
monthly volume):.
For 1 through 100,000 batches (per $0.007.
batch).
For more than 100,000 batches (per $0.0035.
batch).
FedPayments Insights Service: \70\
Monthly Fee (a single fee based on
commercial receipt volume):.
0-50,000 items per month................ $75.00.
50,001-100,000 items per month.......... $120.00.
100,001-500,000 items per month......... $180.00.
500,001-1,000,000 items per month....... $260.00.
1,000,001-5,000,000 items per month..... $340.00.
5,000,001-10,000,000 items per month.... $450.00.
10,000,001-25,000,000 items per month... $550.00.
25,000,001-60,000,000 items per month... $625.00.
Over 60,000,000 items per month......... $700.00.
Monthly FedPayments Reporter Service:
FedPayments Reporter Service monthly package
includes the following reports.
ACH Received Entries Detail--Customer
and Depository Financial Institution.
ACH Return Reason Report--Customer and
Depository Financial Institution.
ACH Originated Entries Detail--Customer
and Depository Financial Institution.
ACH Volume Summary by SEC Code--Customer
ACH Customer Transaction Activity.......
ACH Death Notification..................
ACH International (IAT).................
ACH Notification of Change..............
ACH Payment Data Information File.......
ACH Remittance Advice Detail............
ACH Remittance Advice Summary...........
ACH Return Item Report and File.........
ACH Return Ratio........................
ACH Social Security Beneficiary.........
ACH Originator Setup....................
ACH Report Delivery via FedLine Solution
On Demand Report Surcharge \71\......... $1.00.
Monthly Package Fee (counts reflect reports
generated as well as delivered via a FedLine
Solution):
For up to 50 reports........................ $45.00.
For 51 through 150 reports.................. $65.00.
For 151 through 500 reports................. $120.00.
For 501 through 1,000 reports............... $220.00.
For 1,001 through 1,500 reports............. $320.00.
For 1,501 through 2,500 reports............. $505.00.
For 2,501 through 3,500 reports............. $705.00.
For 3,501 through 4,500 reports............. $900.00.
For 4,501 through 5,500 reports............. $1,095.00.
For 5,501 through 7,000 reports............. $1,350.00.
For 7,001 through 8,500 reports............. $1,585.00.
For 8,501 through 10,000 reports............ $1,815.00.
For more than 10,000 reports................ $1,980.00.
Premier reports (per report generated): \71\
ACH Volume Summary by SEC Code Report--
Depository Financial Institution:.
For 1 through 5 reports............. $10.00.
For 6 through 10 reports............ $6.00.
For 11 or more reports.............. $1.00.
On Demand Surcharge................. $1.00.
ACH Routing Number Activity Report:.....
For 1 through 5 reports............. $10.00.
For 6 through 10 reports............ $6.00.
For 11 or more reports.............. $1.00.
On Demand Surcharge................. $1.00.
ACH Originated Batch Report (monthly):..
For 1 through 5 reports............. $10.00.
For 6 through 10 reports............ $6.00.
For 11 or more reports.............. $1.00.
On Demand Surcharge................. $1.00.
ACH Originated Batch Report (daily):....
Scheduled Report.................... $0.65.
On Demand Surcharge................. $1.00.
On-us inclusion:............................
Participation (monthly fee per RTN)..... $10.00.
Per-item................................ $0.0030.
[[Page 79324]]
Per-addenda............................. $0.0015.
Report delivery via encrypted email (per $0.20.
email).
Other Fees and Discounts:
Monthly fee (per RTN):......................
FedACH Participation Fee \72\........... $75.00.
Same Day Service Origination $10.00.
Participation Fee \73\.
FedACH Settlement Fee \74\..................
Premium Receivers, Level One \75\ and $60.00.
Level Two \76\.
Non-Premium Receivers \77\ when volume $100.00.
is less than 1,500,000 items per month.
Non-Premium Receivers \78\ when volume $200.00.
is more than 1,500,000 items per month.
FedACH Information File Extract Fee......... $180.00.
IAT Output File Sort Fee.................... $150.00.
Fixed Participation Fee--Automated NOCs \79\ $5.00.
Non-Electronic Input/Output fee: \80\.......
CD/DVD (CD or DVD)...................... $50.00.
Paper (file or report).................. $50.00.
Fees and Credits Established by Nacha: \81\.
Nacha Same Day Entry fee (per item)..... $0.052.
Nacha Same Day Entry credit (per item).. $0.052 (credit).
Nacha Unauthorized Entry fee (per item). $4.50.
Nacha Unauthorized Entry credit (per $4.50 (credit).
item).
Nacha Admin Network fee (monthly fee per $22.00.
RTN).
Nacha Admin Network fee (per entry)..... $0.000185.
FedGlobal[supreg] ACH Payments: \82\
Fixed Monthly Fee (per RTN): \83\...........
Monthly origination volume more than 500 $185.00.
items.
Monthly origination volume between 161 $60.00.
and 500 items.
Monthly origination volume less than 161 $20.00.
items.
Per-item Origination Fee for Monthly Volume
more than 500 Items (surcharge): \84\.
Canada service.......................... $0.50.
Mexico service.......................... $0.55.
Panama service.......................... $0.60.
Europe service.......................... $1.13.
Per-item Origination Fee for Monthly Volume
between 161 and 500 items (surcharge): \84\.
Canada service.......................... $0.75.
Mexico service.......................... $0.80.
Panama service.......................... $0.85.
Europe service.......................... $1.38.
Per-item Origination Fee for Monthly Volume
less than 161 items (surcharge): \84\.
Canada service.......................... $1.00.
Mexico service.......................... $1.05.
Panama service.......................... $1.10.
Europe service.......................... $1.63.
Other FedGlobal ACH Payments Fees:..........
Canada service:.........................
Return received from Canada \85\.... $0.99 (surcharge).
Trace of item at receiving gateway.. $5.50.
Trace of item not at receiving $7.00.
gateway.
Mexico service:.........................
Return received from Mexico \85\.... $0.91 (surcharge).
Item trace.......................... $13.50.
Foreign currency to foreign currency $0.67 (surcharge).
(F3X) item originated to Mexico
\84\.
Panama service:.........................
Return received from Panama \85\.... $1.00 (surcharge).
Item trace.......................... $7.00.
NOC................................. $0.72.
Europe service:.........................
F3X item originated to Europe \84\.. $1.25 (surcharge).
Return received from Europe \85\.... $1.35 (surcharge).
Item trace.......................... $7.00.
Exception Resolution Service:
Monthly Fees (applies to cases only at the
parent RTN): \86\.
Up to 5 cases........................... $20.00.
6-25 cases.............................. $40.00.
26-50 cases............................. $60.00.
51-100 cases............................ $100.00.
101-1,000 cases......................... $250.00.
1,001-5,000 cases....................... $400.00.
5,001 cases and above................... $500.00.
Offline Service Participant--Case Fees: \87\
Case Open Fee........................... $5.00.
Case Response Fee....................... $5.00.
------------------------------------------------------------------------
[[Page 79325]]
Fedwire Funds Service and National Settlement Service 2023 Fee Schedules
[Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Fedwire Funds Service
------------------------------------------------------------------------
Monthly Participation Fee............................... $100.00
Basic volume-based pre-incentive transfer fee
(originations and receipts)--per transfer for:
Tier 1: The first 14,000 transfers per month........ 0.920
Tier 2: Additional transfers up to 90,000 per month. 0.285
Tier 3: Every transfer over 90,000 per month........ 0.180
Volume-based transfer fee with the incentive discount
(originations and receipts)--per eligible transfer for:
\88\
Tier 1: The first 14,000 transfers per month........ 0.184
Tier 2: Additional transfers 14,001 to 90,000 per 0.057
month..............................................
Tier 3: Every transfer over 90,000 per month........ 0.036
Surcharge for Offline Transfers (Originations and 75.00
Receipt)...............................................
Surcharge for End-of-Day Transfer Originations \89\..... 0.26
Monthly FedPayments Manager Import/Export fee \90\...... 50.00
Surcharge on transfers >$10 million Origination and 0.14
Receipt................................................
Surcharge on transfers >$100 million Origination and 0.36
Receipt................................................
Surcharge for Payment Notification:
Origination Surcharge \91\.......................... 0.01
Receipt Volume 91 92................................ N/A
Delivery of Reports--Hard Copy Reports to On-Line 50.00
Customers..............................................
Special Settlement Arrangements (charge per settlement 150.00
day) \93\..............................................
------------------------------------------------------------------------
National Settlement Service
------------------------------------------------------------------------
Basic:
Settlement Entry Fee................................ 1.50
Settlement File Fee................................. 30.00
Surcharge for Offline File Origination \94\............. 45.00
Minimum Monthly Fee \95\................................ 60.00
------------------------------------------------------------------------
Fedwire Securities Service 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Basic Transfer Fee: 96 97
Agency Securities: Transfer or reversal originated $0.61
or received........................................
Treasury Securities: Transfer or reversal originated 0.61
or received........................................
Surcharge: \98\
Agency Securities: Offline origination & receipt 80.00
surcharge..........................................
Treasury Securities: Offline origination & receipt 80.00
surcharge..........................................
Monthly Maintenance Fees: \99\
Agency Securities: Account maintenance (per account) 57.50
\100\..............................................
Agency Securities: Issue maintenance (per issue/per 0.61
account) \101\.....................................
Treasury Securities: Account maintenance (per None
account) \102\.....................................
Treasury Securities: Issue maintenance (per issue/ None
per account) \103\.................................
ACAP Fees: 104 105
Claims Adjustment Fee 106 107....................... 1.00
Tracking Indicators Fee............................. 0.10
Position Maintenance Fee (per position maintained/ 0.03
per business day) 108 109..........................
GNMA Serial Note Stripping or Reconstitution Fee \110\.. 9.00
Joint Custody Origination Surcharge 111 112............. 46.00
Delivery of Reports--Hard Copy Reports to On-Line 50.00
Customers \113\........................................
------------------------------------------------------------------------
FedNow Service 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Customer Credit Transfer (per item) PACS.008 $0.045.
Origination.
Customer Credit Transfer Returns (per item) $0.045.
PACS.004 Origination.
Liquidity Management Transfer (LMT) (per- $1.00.
item) PACS.009 Origination.
Request for Payment (RFP) (per-item) PAIN.013 $0.01.
PACS.008 Origination Discount................ -$0.045 per item for up
to 2,500 customer credit
transfers per month (in
2023).
Participation Fee--General (per month)....... $25.00, discounted to
$0.00 in 2023.
------------------------------------------------------------------------
[[Page 79326]]
FedLine 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
FedComplete Packages (monthly) 114 115
------------------------------------------------------------------------
FedComplete 100A Plus \116\.................. $900.00.
includes:
FedLine Advantage Plus package...........
FedLine Subscriber--Pack of 5............
7,500 FedForward transactions............
46 FedForward Cash Letter items..........
70 FedReturn transactions................
14,000 FedReceipt transactions...........
Check monthly participation fee..........
35 Fedwire Funds origination transfers...
35 Fedwire Funds receipt transfers.......
Fedwire monthly participation fee........
1,000 FedACH origination items...........
FedACH monthly minimum fee--Forward
Origination.
7,500 FedACH receipt items...............
FedACH monthly minimum fee--Receipt......
10 FedACH web-originated return/NOC......
500 FedACH addenda record originated.....
1,000 FedACH addenda record received.....
100 FedACH SameDay Service--Forward Item
Originated.
FedACH Participation Fee.................
FedACH settlement fee....................
FedACH SameDay Service origination
participation fee.
FedComplete 100A Premier..................... $975.00.
includes:
FedLine Advantage Premier package........
Volumes included in the FedComplete 100A
Plus package.
FedComplete 200A Plus........................ $1,425.00.
includes:
FedLine Advantage Plus package...........
FedLine subscriber 5-pack................
25,000 FedForward transactions...........
46 FedForward Cash Letter items..........
225 FedReturn transactions...............
25,000 FedReceipt transactions...........
Check monthly participation fee..........
100 Fedwire Funds origination transfers..
100 Fedwire Funds receipt transfers......
Fedwire monthly participation fee........
2,000 FedACH origination items...........
FedACH monthly minimum fee--Forward
Origination.
25,000 FedACH receipt items..............
FedACH monthly minimum fee--Receipt......
20 FedACH web-originated return/NOC......
750 FedACH addenda record originated.....
1,500 FedACH addenda record received.....
200 FedACH SameDay Service--Forward Item
Originated.
FedACH Participation Fee.................
FedACH settlement fee....................
FedACH SameDay Service origination
participation fee.
FedComplete 200A Premier..................... $1,500.00.
includes:
FedLine Advantage Premier package........
Volumes included in the FedComplete 200A
Plus package.
FedComplete Excess Volume and Receipt
Surcharge: \117\
FedForward \118\......................... $0.03700/item.
FedReturn................................ $0.82000/item.
FedReceipt............................... $0.00005/item.
Fedwire Funds Origination................ $0.88000/item.
Fedwire Funds Receipt.................... $0.08800/item.
FedACH Origination....................... $0.00350/item.
FedACH Receipt........................... $0.00035/item.
FedComplete credit adjustment................ various.
FedComplete debit adjustment................. various.
------------------------------------------------------------------------
FedLine Solutions (monthly)
------------------------------------------------------------------------
FedMail \119\................................ $85.00.
includes:
[[Page 79327]]
FedMail access channel...................
Check FedFoward, Fed Return and
FedReceipt Services.
Check Adjustments........................
FedACH Download Advice and Settlement
Information.
Fedwire Funds Offline Advices............
Daily Statement of Account (Text)........
Monthly Statement of Service Charges
(Text).
Electronic Cash Difference Advices.......
FedLine Exchange \119\....................... $40.00.
includes:
E-Payments Directory (via manual
download).
FedLine Exchange Premier 119 120............. $125.00.
includes:
FedLine Exchange package.................
E-Payments Directory (via automated
download).
FedLine Web \121\............................ $110.00.
includes:
FedLine Web access channel...............
Services included in the FedLine Exchange
package.
Check FedForward, FedReturn and
FedReceipt Services.
Check Adjustments........................
FedACH Derived Returns and NOCs..........
FedACH File, Batch and Item Detail
Information.
FedACH Download Advice...................
FedACH Settlement Information............
FedACH Customer Profile Information......
FedACH Returns Activity Statistics.......
FedACH Risk RDFI Alert Service...........
FedACH Risk Returns Reporting Service....
FedACH Exception Resolution Service......
FedCash[supreg] Services.................
FedLine Web Plus \121\....................... $160.00.
includes:
Services included in the FedLine Web
package.
FedACH Risk Origination Monitoring
Service.
FedACH FedPayments Reporter Service......
Check Large Dollar Return................
Check FedImage Services..................
Account Management Information (AMI).....
Daily Statement of Account (PDF, Text)...
Daylight Overdraft Reports...............
Monthly Account Services (SCRD) File.....
Monthly Statement of Service Charges
(PDF, Text).
E-Payments Routing Directory (via
automated download).
FedLine Advantage \121\...................... $415.00.
includes:
FedLine Advantage access channel.........
One VPN device...........................
Services included in the FedLine Web
package.
FedACH File Transmission To/From Federal
Reserve.
FedACH Request Output File Delivery......
FedACH View File Transmission and
Processing Status.
Fedwire Originate and Receive Funds
Transfer.
Fedwire Originate and Receive Securities
Transfer.
National Settlement Service Services.....
Check Large Dollar Return................
Check FedImage Services..................
Account Management Information with Intra-
Day Download Search File.
Daily Statement of Account (PDF, Text)...
Daylight Overdraft Reports...............
Monthly Account Services (SCRD) File.....
Monthly Statement of Service Charges
(PDF, Text).
FedLine Advantage Plus \121\................. $460.00.
includes:
Services included in the FedLine
Advantage package.
One VPN device...........................
FedACH Risk Origination Monitoring
Service.
FedACH FedPayments Reporter Service......
Fedwire Funds FedPayments Manager Import/
Export (less than or equal to 250
Fedwire transactions and one routing
number per month).
[[Page 79328]]
FedTransaction Analyzer[supreg] (less
than 250 or equal to Fedwire
transactions and one routing number per
month).
E-Payments Routing Directory (via
automated download).
FedLine Advantage Premier \121\.............. $570.00.
Includes:
FedLine Advantage Plus package...........
Two VPN devices..........................
Fedwire Funds FedPayments Manager Import/
Export (more than 250 Fedwire
transactions or more than one routing
number in a given month).
FedTransaction Analyzer (more than 250
Fedwire transactions or more than one
routing number per month).
FedLine Command Plus \122\................... $1,035.00.
includes:
FedLine Command access channel...........
Services included in the FedLine
Advantage Plus package.
One VPN device...........................
Additional FedLine Command server
certificates.
Fedwire Statement Services...............
Fedwire Funds FedPayments Manager Import/
Export (more than 250 Fedwire
transactions or more than one routing
number in a given month).
FedTransaction Analyzer (more than 250
Fedwire transactions or more than one
routing number in a given month).
Intra-Day File with Transaction Details
(up to six times daily).
Statement of Account Spreadsheet File
(SASF).
Financial Institution Reconcilement Data
(FIRD) File (machine readable).
FedLine Direct Plus \123\.................... $5,500.00.
includes:
FedLine Direct access channel............
Services included in the FedLine Command
Plus package.
One VPN device...........................
One 2 Mbps Dedicated WAN Connection......
Additional FedLine Direct server
certificates.
Treasury Check Information System (TCIS).
Dual Vendors.............................
FedLine Direct Contingency Solution......
FedLine Direct Premier \123\................. $10,500.00.
includes:
Services included in the FedLine Direct
Plus package.
Two 2 Mbps dedicated WAN Connections.....
One Network Diversity....................
Two VPN devices..........................
------------------------------------------------------------------------
A la carte options (monthly) \124\
------------------------------------------------------------------------
Electronic Access:
FedMail--FedLine Exchange Subscribers-- $25.00.
Pack of 5 \125\.
FedLine Subscribers--Pack of 5 (access to $100.00.
Web and Advantage).
Additional VPNs 126 127.................. $100.00.
Additional 2 Mbps WAN connection \123\... $3,000.00.
WAN Connection Upgrade...................
10 Mbps \128\........................ $1,700.00.
30 Mbps \128\........................ $3,000.00.
50 Mbps \128\........................ $4,000.00.
100 Mbps \128\....................... $7,000.00.
200 Mbps \128\....................... $11,000.00.
FedLine International Setup (one-time $5,000.00.
fee).
FedLine Custom Implementation Fee (one- various.
time fee) \129\.
Network Diversity........................ $2,500.00.
FedMail Fax \130\........................ $200.00.
FedMail Email (for customers with FedLine $85.00.
Web and above) \131\.
VPN Device Modification (one-time fee)... $200.00.
VPN Device Missed Activation Appointment $175.00.
(one-time fee).
VPN Device Expedited Hardware Surcharge $100.00.
(one-time fee).
VPN Device Replacement or Move (one-time $300.00.
fee).
E-Payments Automated Download (1-5 Add'l $75.00.
Codes) \132\.
E-Payments Automated Download (6-20 Add'l $150.00.
Codes) \132\.
E-Payments Automated Download (21-50 $300.00.
Add'l Codes) \132\.
E-Payments Automated Download (51-100 $500.00.
Add'l Codes) \132\.
E-Payments Automated Download (101-250 $1,000.00.
Add'l Codes) \132\.
E-Payments Automated Download (>250 Add'l $2,000.00.
Codes) \132\.
------------------------------------------------------------------------
[[Page 79329]]
FedLine 2023 Fee Schedule
[Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Accounting Information Services (monthly):
Cash Management System (CMS) Plus--Own
report--up to 12 files with \133\.
no OSRTN, respondent/sub-account $60.00.
activity.
less than 10 OSRTNs, respondents and/ $125.00.
or sub-accounts.
10-50 OSRTNs, respondents and/or sub- $250.00.
accounts.
51-100 OSRTNs, respondents and/or sub- $500.00.
accounts.
101-500 OSRTNs, respondents and/or $750.00.
sub-accounts.
>500 OSRTNs, respondents and/or sub- $1,000.00.
accounts.
End-of-Day Financial Institution $150.00.
Reconcilement Data (FIRD) File \134\.
Statement of Account Spreadsheet File $150.00.
(SASF) \135\.
Intra-day Download Search Results in $150.00.
Spreadsheet Format (with AMI) \136\.
Other:
Software Certification................... $0.00 to $8,000.00.
Vendor Pass-Through Fee.................. various.
Electronic Access Credit Adjustment...... various.
Electronic Access Debit Adjustment....... various.
------------------------------------------------------------------------
---------------------------------------------------------------------------
\55\ Any ODFI incurring less than $50 for the following fees
will be charged a variable amount to reach the minimum: Forward
value and non-value item origination fees, and FedGlobal ACH
origination surcharges.
\56\ Any RDFI not originating forward value and non-value items
and incurring less than $40 in receipt fees will be charged a
variable amount to reach the minimum. Any RDFI that originates
forward value and non-value items incurring less than $50 in forward
value and nonvalue item origination fees will only be charged a
variable amount to reach the minimum monthly origination fee.
\57\ This surcharge is assessed on all forward items that
qualify for sameday processing and settlement and is incremental to
the standard origination item fee.
\58\ The fee includes the item and addenda fees in addition to
the conversion fee.
\59\ The fee includes the item and addenda fees in addition to
the conversion fee. Reserve Banks also assess a $45 fee for every
government paper return/NOC they process.
\60\ Origination volumes at these levels qualify for a waterfall
discount which includes all FedACH origination items.
\61\ Origination discounts based on monthly billed receipt
volume apply only to those items received by FedACH receiving points
and are available only to Premium Receivers.
\62\ RDFIs receiving through FedACH less than 90 percent of
their FedACH-originated items.
\63\ This per-item discount is a reduction to the standard
receipt fees listed in this fee schedule.
\64\ Receipt volumes at these levels qualify for a waterfall
discount which includes all FedACH receipt items.
\65\ RDFIs receiving through FedACH at least 90 percent of their
FedACH-originated items, but less than 90 percent of all of their
ACH items originated through any operator.
\66\ This per-item discount is a reduction to the standard
receipt fees listed in this fee schedule.
\67\ RDFIs receiving through FedACH at least 90 percent of all
of their ACH items originated through any operator.
\68\ This per-item discount is a reduction to the standard
receipt fees listed in this fee schedule.
\69\ Criteria may be set for both the Origination Monitoring
Service and the RDFI Alert Service. Subscribers with no criteria set
up will be assessed the $35 monthly package fee.
\70\ Monthly commercial receipt volume is calculated based on
combined volume of subscribed ABAs in an account family.
\71\ Premier reports generated on demand are subject to the
package/tiered fees plus a surcharge.
\72\ The fee applies to RTNs that have received or originated
FedACH transactions during a month. Institutions that receive only
U.S. government transactions or that elect to use a private-sector
operator exclusively are not assessed the fee.
\73\ This surcharge is assessed to any RTN that originates at
least one item meeting the criteria for same-day processing and
settlement in a given month.
\74\ The fee is applied to any RTN with activity during a month,
including RTNs of institutions that elect to use a private-sector
operator exclusively but also have items routed to or from customers
that access the ACH network through FedACH. This fee does not apply
to RTNs that use the Reserve Banks for only U.S. government
transactions.
\75\ RDFIs receiving through FedACH at least 90 percent of their
FedACH-originated items, but less than 90 percent of all of their
ACH items originated through any operator.
\76\ RDFIs receiving through FedACH at least 90 percent of all
of their ACH items originated through any operator.
\77\ RDFIs receiving through FedACH less than 90 percent of
their FedACH-originated items.
\78\ RDFIs receiving through FedACH less than 90 percent of
their FedACH-originated items.
\79\ Fee will be assessed only when automated NOCs are
generated.
\80\ Limited services are offered in contingency situations.
\81\ The fees and credits listed are collected from the ODFI and
credited to Nacha (admin network) or to the RDFI (same-day entry and
unauthorized entry) in accordance with the ACH Rules.
\82\ The international fees and surcharges vary from country to
country as these are negotiated with each international gateway
operator.
\83\ A single monthly fee based on total FedGlobal ACH Payments
origination volume.
\84\ This per-item surcharge is in addition to the standard
domestic origination fees listed in this fee schedule.
\85\ This per-item surcharge is in addition to the standard
domestic receipt fees listed in this fee schedule.
\86\ The monthly fee is rolled up to the parent DI level, such
that a DI that opts into the FedACH Exception Resolution Service
under two separate RTNs would pay a single monthly fee based on the
total number of cases opened for their two RTNs combined.
\87\ A financial institution may enroll in the Service as an
Offline Service Participant by designating the Reserve Bank to
access and use the functionality of the application on behalf of the
Offline Participant.
\88\ The incentive discounts apply to the volume that exceeds 60
percent of a customer's historic benchmark volume. Historic
benchmark volume is based on a customer's average daily activity
over the previous five calendar years. If a customer has fewer than
five full calendar years of previous activity, its historic
benchmark volume is based on its daily activity for as many full
calendar years of data as are available. If a customer has less than
one year of past activity, then the customer qualifies automatically
for incentive discounts for the year. The applicable incentive
discounts are as follows: $0.736 for transfers up to 14,000; $0.228
for transfers 14,001 to 90,000; and $0.144 for transfers over
90,000.
\89\ This surcharge applies to originators of transfers that are
processed by the Reserve Banks after 5:00 p.m. eastern time.
\90\ This fee is charged to any Fedwire Funds participant that
originates a transfer message via the FedPayments Manager (FPM)
Funds tool and has the import/export processing option setting
active at any point during the month.
\91\ Payment Notification and End-of-Day Origination surcharges
apply to each Fedwire funds transfer message.
\92\ Provided on billing statement for informational purposes
only.
\93\ This charge is assessed to settlement arrangements that use
the Fedwire Funds Service to affect the settlement of interbank
obligations (as opposed to those that use the National Settlement
Service). With respect to such special settlement arrangements,
other charges may be assessed for each funds transfer into or out of
the accounts used in connection with such arrangements.
\94\ If your organization is a settlement agent, it may be able
to use the National Settlement Service offline service if it is
experiencing an operational event that prevents the transmission of
settlement files via its electronic connection to the Federal
Reserve Banks. The Federal Reserve Banks have limited capacity to
process offline settlement files. As a result, while the Federal
Reserve Banks use best efforts to process offline settlement file
submissions, there is no guarantee that an offline settlement file,
in particular one that is submitted late in the operating day or
that contains a large number of entries, will be accepted for
processing. Only those persons identified as authorized individuals
on the National Settlement Service 04 Agent Contact Form may submit
offline settlement files. For questions related to the National
Settlement Service offline service, please contact National
Settlement Service Central Support Service Staff (CSSS) at 800-758-
9403, or via email at <a href="/cdn-cgi/l/email-protection#bad9c9c9c994c9cedbdcdcfad4c394dcc8d894d5c8dd"><span class="__cf_email__" data-cfemail="d2b1a1a1a1fca1a6b3b4b492bcabfcb4a0b0fcbda0b5">[email protected]</span></a>.
\95\ Any settlement arrangement that accrues less than $60
during a calendar month will be assessed a variable amount to reach
the minimum monthly fee.
\96\ Restricted Securities Accounts maintained by the Reserve
Banks under the Loans and Discounts program and the 31 CFR part 202
program are not assessed for monthly account maintenance fees or
fees for Transfers of Book-Entry Securities to or from such
Restricted Securities Accounts. Restricted Securities Accounts
maintained by the Reserve Banks under the 31 CFR part 225 program
are subject to monthly account maintenance fees but not fees for
Transfers of Book-Entry Securities to or from such Restricted
Securities Accounts.
\97\ These fees are set by the Federal Reserve Banks.
\98\ This surcharge is set by the Federal Reserve Banks. It is
in addition to any basic transfer or reversal fee.
\99\ Restricted Securities Accounts maintained by the Reserve
Banks under the Loans and Discounts program and the 31 CFR. part 202
program are not assessed for monthly account maintenance fees or
fees for Transfers of Book-Entry Securities to or from such
Restricted Securities Accounts. Restricted Securities Accounts
maintained by the Reserve Banks under the 31 CFR part 225 program
are subject to monthly account maintenance fees but not fees for
Transfers of Book-Entry Securities to or from such Restricted
Securities Accounts.
\100\ These fees are set by the Federal Reserve Banks.
\101\ These fees are set by the Federal Reserve Banks.
\102\ The U.S. Department of the Treasury absorbs the monthly
account maintenance fees the Federal Reserve Banks charge to the
extent a securities account contains only Treasury securities.
\103\ The U.S. Department of the Treasury absorbs the monthly
account maintenance fees the Federal Reserve Banks charge to the
extent a securities account contains only Treasury securities.
\104\ These fees are set by the Federal Reserve Banks.
\105\ Automated Claim Adjustment Process (ACAP) fees apply to
all ACAP-eligible security types. For information about ACAP's
enhancements coming up in 2023 and their implementation dates,
please visit this website.
\106\ The billing code 20141, Fail Claim Adjustment Fee, will be
sunset once Phase 1 of the ACAP's Enhancement Project goes live. For
information about ACAP's enhancements implementation dates, please
visit this website.
\107\ The billing codes 20144, Fail Claim Adjustment Fee
(Debit), and 20145, Fail Claim Adjustment Fee (Credit), will be
introduced once Phase 1 of the ACAP's Enhancement Project goes live.
These fees will replace the billing code 20141, Fail Claim
Adjustment Fee. For information about ACAP's enhancements
implementation dates, please visit this website.
\108\ Participants are charged the Repo Position Maintenance Fee
for both a Repo-Out balance and a Repo-In balance. These fees will
be assessed every business day.
\109\ Participants are charged the Securities Lending Position
Maintenance Fee for both a Securities Borrowed balance and a
Securities Lent balance. These fees will be assessed every business
day.
\110\ This fee is set by and remitted to the Government National
Mortgage Association (GNMA).
\111\ The Federal Reserve Banks charge participants a Joint
Custody Origination Surcharge for both Agency and Treasury
securities.
\112\ These fees are set by the Federal Reserve Banks.
\113\ These fees are set by the Federal Reserve Banks.
\114\ FedComplete packages are all-electronic service options
that bundle payment services with an access solution for one monthly
fee.
\115\ FedComplete customers that use the email service would be
charged the FedMail Email a la carte fee and for all FedMail-FedLine
Exchange Subscriber 5-packs.
\116\ Packages with an ``A'' include the FedLine Advantage
channel.
\117\ Per-item surcharges are in addition to the standard fees
listed in the applicable priced services fee schedules.
\118\ FedComplete customers will be charged $4 for each
FedForward cash letter over the monthly package threshold. This
activity will appear under billing code 51998 in Service Area 1521
on a month-lagged basis.
\119\ FedMail and FedLine Exchange packages do not include user
credentials, which are required to access priced services and
certain informational services. Credentials are sold separately in
packs of five via the FedMail-FedLine Exchange Subscriber 5-pack.
\120\ Additional VPNs are available for FedLine Advantage,
FedLine Command, and FedLine Direct packages only. All customers
will need to replace their existing VPN device with the new VPN
device. Effective October 1, 2023, customers who have not started
migration will be assessed a $400 monthly fee until migration is
complete.
\121\ FedLine Web and Advantage packages do not include user
credentials, which are required to access priced services and
certain informational services. Credentials are sold separately in
packs of five via the FedLine Subscriber 5-pack.
\122\ FedLine Solutions package fees associated with
establishing a new connection or upgrading a current connection to
FedLine Advantage[supreg], FedLine Command[supreg], or FedLine
Direct[supreg] for the FedNowSM Service will be credited back on a
monthly basis in 2023.
\123\ Early termination fees and/or expedited order fees may
apply to all FedLine Direct packages and FedLine Direct a la carte
options.
\124\ These add-on services can be purchased only with a FedLine
Solution.
\125\ New FedNow\SM\ Subscribers will not contribute toward the
FedLine Subscribers--Pack of 5 monthly fee in 2023.
\126\ Additional VPNs are available for FedLine Advantage,
FedLine Command, and FedLine Direct packages only. All customers
will need to replace their existing VPN device with the new VPN
device. Effective October 1, 2023, customers who have not started
migration will be assessed a $400 monthly fee until migration is
complete.
\127\ An additional VPN or WAN device leveraged exclusively for
the FedNow\SM\ Service will not be assessed the monthly ala carte
fee for the device(s) in 2023. While customers may opt to add a WAN
router of any applicable line speed for the FedNow\SM\ Service, the
total monthly qualifying amount will be limited to $5,000 per month.
\128\ Fee is in addition to the FedLine Direct package fees or
additional 2Mbps WAN fees.
\129\ The FedLine Custom Implementation Fee is $2,500 or $5,000
based on the complexity of the setup.
\130\ Limited to installed base only. All customers will need to
migrate FedMail Fax services to FedMail or FedLine services, where
applicable. Effective October 1, 2023, the price will increase to
$400 for FedMail Fax.
\131\ Available only to customers with a priced FedLine package.
\132\ Five download codes are included at no cost in all Plus
and Premier packages.
\133\ Cash Management Service options are limited to Plus and
Premier packages.
\134\ The End of Day Financial Institution Reconcilement Data
(FIRD) File option is available for FedLine Web Plus, FedLine
Advantage Plus and Premier packages. It is available for no extra
fee in FedLine Command Plus and Direct packages.
\135\ The Statement of Account Spreadsheet File (SASF) option is
available for FedLine Web Plus, FedLine Advantage Plus and Premier
packages. It is available for no extra fee in FedLine Command Plus
and Direct packages.
\136\ The Intra-day Download Search Results in Spreadsheet Form
option is available for the FedLine Web Plus package. It is
available for no extra fee in FedLine Advantage and higher packages.
[[Page 79330]]
---------------------------------------------------------------------------
By order of the Board of Governors of the Federal Reserve
System.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2022-28096 Filed 12-23-22; 8:45 am]
BILLING CODE 6210-01-P
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</html>Indexed from Federal Register on December 27, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.