Federal Reserve Bank Services, 65937-65955 [2014-26322]
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
Effective on November 6, 2014.
FOR FURTHER INFORMATION CONTACT: Lisa
Boyd, Executive Director, Federal Mine
Safety and Health Review Commission,
(202) 434–9910.
SUPPLEMENTARY INFORMATION: This
Notice announces the appointment of
the following primary and alternate
members to the Federal Mine Safety and
Health Review Commission PRB:
DATES:
Primary Members
Cynthia Z. Springer, Deputy
Commissioner, Accounting and
Shared Services, Bureau of the Fiscal
Service
Matthew J. Miller, Acting Assistant
Commissioner, Governmentwide
Accounting, Bureau of the Fiscal
Service
D. Michael Linder, Deputy Assistant
Commissioner, Fiscal Accounting,
Bureau of the Fiscal Service
Douglas Anderson, Assistant
Commissioner, Office of Shared
Services, Bureau of the Fiscal Service
Donald Keith Rake, Deputy Assistant
Commissioner, Office of Shared
Services, Bureau of the Fiscal Service
Alternate Members
None.
Authority: 5 U.S.C. 4313(c)(4)
Lisa M. Boyd,
Executive Director, Federal Mine Safety and
Health Review Commission.
[FR Doc. 2014–26416 Filed 11–5–14; 8:45 am]
BILLING CODE 6735–01–P
FEDERAL RESERVE SYSTEM
[Docket No. OP–1500]
Federal Reserve Bank Services
Board of Governors of the
Federal Reserve System.
ACTION: Notice.
AGENCY:
The Board of Governors of the
Federal Reserve System (Board) has
approved the private sector adjustment
factor (PSAF) for 2015 of $18.0 million
and the 2015 fee schedules for Federal
Reserve priced services and electronic
access. These actions were taken in
accordance with the requirements of the
Monetary Control Act of 1980, which
requires that, over the long run, fees for
Federal Reserve priced services be
established on the basis of all direct and
indirect costs, including the PSAF.
DATES: The new fee schedules become
effective January 2, 2015.
FOR FURTHER INFORMATION CONTACT: For
questions regarding the fee schedules:
Susan V. Foley, Associate Director,
(202) 452–3596; Samantha J. Pelosi,
Manager, Retail Payments, (202/530–
6292); Linda S. Healey, Senior Financial
Services Analyst, (202) 452–5274,
Division of Reserve Bank Operations
and Payment Systems. For questions
regarding the PSAF: Gregory L. Evans,
Deputy Associate Director, (202) 452–
3945; Brenda L. Haase, Manager,
Financial Accounting, (202) 452–2753;
or Manuel Garcia, Senior Financial
Analyst, (202) 452–3480), Division of
Reserve Bank Operations and Payment
SUMMARY:
Systems. For users of
Telecommunications Device for the Deaf
(TDD) only, please call (202) 263–4869.
Copies of the 2015 fee schedules for the
check service are available from the
Board, the Federal Reserve Banks, or the
Reserve Banks’ financial services Web
site at www.frbservices.org.
SUPPLEMENTARY INFORMATION:
I. Private Sector Adjustment Factor,
Priced Services Cost Recovery, and
Overview of 2015 Price Changes
A. Overview—Each year, as required
by the Monetary Control Act of 1980,
the Reserve Banks set fees for priced
services provided to depository
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 business firm
provided the services. The imputed
costs and imputed profit are collectively
referred to as the PSAF. From 2004
through 2013, the Reserve Banks
recovered 102.0 percent of their total
expenses (including imputed costs) and
targeted after-tax profits or return on
equity (ROE) for providing priced
services.1
Table 1 summarizes 2013 actual, 2014
estimated, and 2015 budgeted costrecovery rates for all priced services.
Cost recovery is estimated to be 100.8
percent in 2014 and budgeted to be
101.9 percent in 2015.
TABLE 1—AGGREGATE PRICED SERVICES PRO FORMA COST AND REVENUE PERFORMANCE a
[Dollars in millions]
1b
Revenue
YEAR
2013 (actual) ........................................................................
2014 (estimate) ....................................................................
2015 (budget) .......................................................................
2c
Total expense
441.3
429.0
414.4
3
Net income
(ROE) [1¥2]
409.3
419.9
401.0
4d
Targeted ROE
5e
Recovery rate
after targeted
ROE [1/(2+4)]
4.2
5.5
5.6
106.7%
100.8
101.9
32.0
9.1
13.4
a Calculations
in this table and subsequent pro forma cost and revenue tables may be affected by rounding.
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).
c The calculation of total expense includes operating, imputed, and other expenses. Imputed and other expenses include taxes, FDIC insurance, 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 FAS 158 [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
FAS 158 [ASC 715]. Future gains or losses, and their effect on cost recovery, cannot be projected.
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b Revenue
1 The ten-year recovery rate is based on the pro
forma income statement for Federal Reserve priced
services published in the Board’s Annual Report.
Effective December 31, 2006, the Reserve Banks
implemented Statement of Financial Accounting
Standards (SFAS) No. 158: Employers’ Accounting
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for Defined Benefit Pension and Other
Postretirement Plans [Accounting Standards
Codification (ASC) 715 Compensation—Retirement
Benefits], which resulted in recognizing a
cumulative reduction in equity related to the priced
services’ benefit plans. Including this cumulative
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reduction in equity from 2006 to 2013 results in
cost recovery of 95.9 percent for the ten-year period.
This measure of long-run cost recovery is also
published in the Board’s Annual Report.
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
Table 2 provides an overview of costrecovery performance for the ten-year
period from 2004 to 2013, 2013 actual,
2014 budget, 2014 estimate, and 2015
budget by priced service.
TABLE 2—PRICED SERVICES COST RECOVERY
[Percent]
Priced service
2004–2013
All services ...........................................................................
Check ...................................................................................
FedACH ...............................................................................
Fedwire Funds and NSS .....................................................
Fedwire Securities ...............................................................
2013 Actual
102.0
102.0
102.1
101.5
102.2
2014 Budget a
2014 Estimate
2015 Budget b
102.3
108.8
99.2
98.0
98.0
100.8
114.2
86.5
101.3
100.1
101.9
105.4
100.0
100.8
96.5
106.7
115.4
101.2
98.6
105.0
a The
2014 budget figures reflect the final budgets as approved by the Board in December 2013.
2015 budget figures reflect preliminary budget information from the Reserve Bank. The Reserve Banks will submit final budget data to
the Board in November 2014, for Board consideration in December 2014.
b The
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1. 2014 Estimated Performance—The
Reserve Banks estimate that they will
recover 100.8 percent of the costs of
providing priced services in 2014,
including total expense and targeted
ROE of $5.5 million, compared with a
budgeted recovery rate of 102.3 percent,
as shown in table 2. Overall, the Reserve
Banks estimate that they will fully
recover actual and imputed costs and
earn net income of $9.1 million,
compared with budgeted net income of
$15.0 million. Although the check
service, the Fedwire® Funds and
National Settlement Services, and the
Fedwire Securities Service are expected
to achieve full cost recovery, the
FedACH® Service is expected to recover
86.5 percent of its costs because of a
$31.6 million charge related to its
investment associated with a multiyear
technology initiative to modernize its
processing platform.2 Greater-thanexpected check volume processed by
the Reserve Banks has been the single
most significant factor influencing
priced services cost recovery.
2. 2015 Private Sector Adjustment
Factor—The 2015 PSAF for Reserve
Bank priced services is $18.0 million.
This amount represents a decrease of
$5.4 million from the 2014 PSAF of
$23.4 million. This decrease is primarily
the result of a reduction in the assets to
be financed on the imputed pricedservices balance sheet and an associated
decline in the cost of debt and equity.
3. 2015 Projected Performance—The
Reserve Banks project a priced services
cost-recovery rate of 101.9 percent in
2015, with net income of $13.4 million,
2 The
Reserve Banks have been engaged in a
multiyear technology initiative to modernize the
FedACH processing platform by migrating the
service from a mainframe system to a distributed
computing environment. In late 2013, the Reserve
Banks conducted an assessment focused on the
viability and cost-effectiveness of the program. As
a result, the Reserve Banks in 2014 suspended the
program and began to investigate the use of other
technology solutions.
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compared to a targeted ROE of $5.6
million. The Reserve Banks project that
the check service, the FedACH Service,
and the Fedwire Funds and National
Settlement Service will fully recover
their costs; however, the Reserve Banks
project that the Fedwire Securities
Service will not achieve full-cost
recovery because of investment costs
associated with multiyear technology
initiatives to modernize its processing
platform. These investments are
expected to enhance efficiency, the
overall quality of operations, and the
Reserve Banks’ ability to offer additional
services to depository institutions.
The primary risks to the Reserve
Banks’ ability to achieve their targeted
cost recovery rates are unanticipated
volume and revenue reductions and the
potential for cost overruns with the
technology modernization initiatives. In
light of these risks, the Reserve Banks
will continue to refine their business
and operational strategies to manage
aggressively operating costs, to increase
product revenue, and to leverage
efficiencies gained from technology
initiatives.
4. 2015 Pricing—The following
summarizes the Reserve Banks’ changes
in fee schedules for priced services in
2015:
Check
• In October, the Reserve Banks
announced a 12:00 noon ET deadline
(but not the associated fee schedules) for
the FedForward® product line,
specifically, Mixed, Select Mixed, and
Premium Mixed D products, which will
provide the Reserve Banks an
opportunity to present forward items to
paying banks one day earlier.3 4 5
3 All times are stated in the Eastern Time Zone
(ET).
4 Depository institutions may deposit image cash
letters using nine deposit options within the
FedForward product line; the options vary in price
structure and funds availability. A current list of
FedForward deposit options can be found at https://
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• In conjunction with the noon
deadline, the Reserve Banks will reduce
the per-item fees for tiers 1, 2, 3, and 4
within the current Mixed deposit
option. For the Select Mixed option, the
Reserve Banks will increase the per-item
fees for non-eligible items from $0.10 to
$0.35 and to implement a $25 image
cash letter (ICL) surcharge. For the
Premium Mixed D option, the Reserve
Banks will charge per-item fees $0.002
higher than the per-item fees at the
current 1:00 a.m. deadline (with the
exception of the substitute check fee,
which will be $0.20 higher) and a $25
ICL surcharge.
• The Reserve Banks will introduce
two new deposit options to the
FedForward Premium Mixed ICL
products and to expand the list of
eligible endpoints to the Select Mixed
ICL products.
• The Reserve Banks will increase the
FedForward Deferred Mixed ICL
product per-item fees at the 5:00 a.m.
and 10:00 a.m. deadlines by $0.002 and
$0.004, respectively. The Reserve Banks
will increase the FedForward Deferred
Fine Sort ICL product per-item fees at
the 5:00 a.m. and 10:00 a.m. deadlines
by $0.001 and $0.002, respectively. The
Reserve Banks hope to encourage
depositors to shift volume from the
deferred availability product to one of
the immediate-availability options at
12:00 noon.
FedACH
• The Reserve Banks will modify the
FedACH Minimum Origination Fee
calculation to include fees associated
frbservices.org/servicefees/check_services_
2014.html.
5 The Reserve Banks announced the new deadline
in October, effective January 2, 2015, to provide
both collecting banks and paying banks sufficient
time to modify their processes to deposit and
receive items at 12:00 noon and 2:00 p.m.,
respectively. The announcement can be found at
https://www.frbservices.org/files/communications/
pdf/check/100314_updated_new_fedforward_
deposit_deadline.pdf.
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with SameDay and FedGlobal®
origination transactions in the
computation.
• The Reserve Banks will reduce the
volume tier thresholds for the FedACH
Risk Management Services from 500,000
to 100,000 items monitored per month.6
Fedwire Funds and National Settlement
• The Reserve Banks will reduce the
per-item fee on all transfers that exceed
$10 million (high-value transfer
surcharge) from $0.15 to $0.14. The
Reserve Banks will increase the monthly
fee for the usage of the FedPayments®
Manager import/export tool from $45 to
$50. In addition, the Reserve Banks will
increase the surcharge for offline
transactions from $45 to $50.7
• The Reserve Banks will increase the
Tier 1 per-item pre-incentive fee from
$0.69 to $0.73 per transaction, increase
the Tier 3 per-item pre-incentive fee
from $0.14 to $0.15, and leave Tier 2
per-item pre-incentive fees unchanged.8
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6 The FedACH Risk Management Services
includes FedACH Risk Origination Monitoring
Service, FedACH Risk RDFI Alert Service, and
FedACH Risk Returns Reporting Service. For more
information, refer to https://frbservices.org/files/
serviceofferings/pdf/FedACHRiskServices.pdf.
7 The monthly fee is charged to any Fedwire
Funds participant that originates a Fedwire Funds
transfer message via the FedPayments Manager
(FPM) Funds tool and has the import/export
processing option setting active at any point during
the month.
8 The per-item pre-incentive fee is the fee that the
Reserve Banks charge for transfers that do not
qualify for incentive discounts. The Tier 1 per-item
pre-incentive fee applies to the first 14,000
transfers, the Tier 2 per-item pre-incentive fee
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Fedwire Securities
• The Reserve Banks will increase the
online transfer fee from $0.54 to $0.65.
• The Reserve Banks will increase the
monthly account maintenance fee from
$40 to $48 per account, and increase the
monthly issue maintenance fee from
$0.54 to $0.65 per issue.
• The Reserve Banks will increase the
Joint Custody origination surcharge
from $40 to $44.
FedLine® Access Solutions
• The Reserve Banks will increase the
fees on legacy services, such as an
additional $10 per month for FedMail®
Fax and $300 per month for FedLine
Direct® (56K). The Reserve Banks also
will raise the monthly fee for the 56K
additional dedicated electronic access
connection by $400 and to introduce a
legacy device VPN surcharge of $2,500
per month.9
• The Reserve Banks will add a new
package called FedLine Advantage®
Premier to the FedLine packaged
solutions that will be priced at $500 per
month with FedTransaction Analyzer
and a secondary VPN device.10
applies to the next 76,000 transfers, and the Tier 3
per-item pre-incentive fee applies to any additional
transfers. The Reserve Banks apply an 80 percent
incentive discount to every transfer over 60 percent
of a customer’s historic benchmark volume.
9 Effective February 1, 2015. Price will increase to
$5,000 on May 1, 2015 and $7,500 on September
1, 2015.
10 All customers, regardless of their chosen
electronic access channel, are responsible for the
purchase and installation of each VPN device.
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• The Reserve Banks will introduce
two new tiers to the FedComplete®
package solutions called FedComplete
100 Premier, priced at $850 per month,
and FedComplete 200 Premier, priced at
$1,375 per month, with FedLine
Advantage Premier included.
• The Reserve Banks will change the
name of the FedMail Email package to
FedLine Exchange; there is no change to
the published fee.
5. 2015 Price Index—Figure 1
compares indexes of fees for the Reserve
Banks’ priced services with the GDP
price index starting in 2005, which is
the first full year the Reserve Banks
offered Check 21 services. The price
index for Reserve Bank priced services
is projected to increase approximately 1
percent in 2015 from the 2014 level. The
price index for Check 21 services is
projected to decrease approximately 3
percent. The price index for the
FedACH Service is projected to decrease
nearly 1 percent. The price index for the
Fedwire Funds and National Settlement
Services is projected to increase
approximately 5 percent. The price
index for the Fedwire Securities
Services is projected to increase
approximately 15 percent. For the
period 2005 to 2014, the price index for
total priced services is expected to
decrease 32 percent. In comparison, for
the period 2005 to 2013, the GDP price
index increased 16 percent.
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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 commercialentity financial statements apply to the
11 Data for U.S. publicly traded firms is from the
Standard and Poor’s Compustat® database. This
database contains information on more than 6,000
U.S. publicly traded firms, which approximates the
entirety of the U.S. market.
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relevant elements in the priced services
pro forma financial statements.
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
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
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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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 pre-tax 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
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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 riskweighted 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.
Application of the Payment System
Risk (PSR) Policy to the Fedwire
Services. The Board recently approved
revisions to the PSR policy to reflect the
new international standards for
financial market infrastructures (FMIs)
developed by the Committee on
Payment and Settlement Systems and
the Technical Committee of the
International Organization of Securities
Commissions in the Principles for
Financial Market Infrastructures. The
revised policy retains the expectation
that the Fedwire Services will 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
13 The FDIC rule, which was adopted as final on
April 8, 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. Since 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 https://www.fdic.gov/news/board/
2014/2014-04-08_notice_dis_c_fr.pdf.
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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
Services do 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. In order to foster competition
with private-sector FMIs, however, the
Reserve Banks’ priced services will hold
six months of the Fedwire Funds
Service’s current operating expenses as
liquid net financial assets and equity on
the pro forma balance sheet.14 Current
operating expenses are defined as
normal business operating expenses on
the income statement less depreciation,
amortization, taxes, and interest on
debt. The Fedwire Funds Service’s six
months of operating expenses are
computed based on its 2015 budget at
$47.7 million.15 The revised PSR policy
requirement is met in 2015 by the
investments and equity imputed to the
priced services balance sheet; therefore,
there is no need to impute additional
assets or equity.
Effective tax rate. As with 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 5 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
A2/P2) and the annual Merrill Lynch
Corporate & High Yield Index rate,
respectively. 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 decrease in the 2015 PSAF is
primarily due to lower financing costs
14 This requirement, which becomes effective on
December 31, 2015, does not apply to the Fedwire
Securities Service. There are no competitors to the
Fedwire Securities Service that will face such a
requirement, and imposing such a requirement
when pricing securities services could artificially
increase the cost of these services.
15 2015 budget pro forma as of October 8, 2014
based on initial transmission data.
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as a result of fewer priced services
assets to be financed than in 2014. Debt
and equity financing rates declined and
less debt and equity was imputed to
fund priced services assets.
Projected 2015 Federal Reserve
priced-services assets, reflected in table
3, have decreased $107.3 million from
2014, which is primarily the result of a
decline in the deferred tax asset. As
shown in table 3, the amount of longterm debt for the 2015 PSAF is $81.9
million, a decline of $37.4 million from
$119.3 million in 2014. Imputed equity
for 2015 is $71.9 million, a decrease of
approximately $10.4 million from the
equity imputed for 2014. In accordance
with FAS 158 [ASC 715], this amount
includes an accumulated other
comprehensive loss of $523.7 million.
Table 4 reflects the portion of shortand long-term assets that must be
financed with actual or imputed
liabilities and equity. Debt and equity
imputed to fund the 2015 priced
services assets within the observed
market leverage ratio produced an
equity level that did not meet the FDIC
minimum equity requirements. As a
result, additional equity was imputed to
meet the FDIC requirements and
imputed long-term debt was reduced.
The ratio of capital to risk-weighted
assets meets the required 10 percent of
risk-weighted assets and equity exceeds
5 percent of total assets (table 6). In
2014, long-term debt and equity was
imputed to meet the asset funding
requirements and reflects the leverage
ratio observed in the market; no
additional equity was required (table 5).
Table 5 shows the derivation of the
2015 and 2014 PSAF. Financing costs
for 2015 are $4.3 million lower than in
2014. In addition to the decline in the
levels of debt and equity mentioned
above, the long-term debt and cost of
equity declined 9 basis points and 5
basis points, respectively. The reduced
equity balance and the lower cost of
equity result in a pre-tax ROE that is
$1.4 million lower than the 2014 pre-tax
ROE. Imputed sales taxes declined to
$3.3 million in 2015 from $3.5 million
in 2014. The priced services portion of
the Board’s expenses decreased $0.8
million to $3.3 million in 2015 from
$4.1 million in 2014. The effective
income tax rate used in 2015 decreased
to 22.4 percent from 37.2 percent in
2014.
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TABLE 3—COMPARISON OF PRO FORMA BALANCE SHEETS FOR BUDGETED FEDERAL RESERVE PRICED SERVICES
[Millions of dollars—projected average for year]
2015
Short-term assets:
Receivables ..........................................................................................................................
Materials and supplies ..........................................................................................................
Prepaid expenses .................................................................................................................
Items in process of collection 16 ..................................................................................................
2014
Change
34.5
0.6
11.0
151.0
35.8
0.7
11.1
200.0
(1.3)
(0.1)
(0.1)
(49.0)
Total short-term assets .................................................................................................
Imputed investments 17 ................................................................................................................
Long-term assets:
Premises 18 ...........................................................................................................................
Furniture and equipment ......................................................................................................
Leasehold improvements and long-term prepayments ........................................................
Net pension asset .................................................................................................................
Deferred tax asset ................................................................................................................
197.2
$600.0
247.7
$600.0
(50.5)
$0.0
$116.2
39.9
91.5
79.6
222.8
$123.6
37.6
103.3
39.3
303.1
$(7.4)
2.3
(11.7)
40.2
(80.2)
Total long-term assets ...................................................................................................
550.0
606.8
(56.8)
Total assets ............................................................................................................
$1,347.2
$1,454.5
$(107.3)
Short-term liabilities:
Deferred credit items ............................................................................................................
Short-term debt .....................................................................................................................
Short-term payables .............................................................................................................
$751.0
18.5
27.6
$800.0
22.2
25.5
$(49.0)
(3.6)
2.1
Total short-term liabilities ..............................................................................................
Long-term liabilities:
Long-term debt .....................................................................................................................
Postemployment/postretirement benefits and net pension liabilities 19 ................................
797.2
847.7
(50.5)
$81.9
396.3
$119.3
405.2
$(37.4)
(8.9)
Total liabilities ................................................................................................................
Equity 17 20 ....................................................................................................................................
$1,275.3
$71.9
$1,372.2
$82.3
$(96.9)
$(10.4)
Total liabilities and equity .......................................................................................
$1,347.2
$1,454.5
$(107.3)
TABLE 4—IMPUTED FUNDING FOR PRICED-SERVICES ASSETS
[Millions of dollars]
2015
2014
$34.5
0.6
11.0
$35.8
0.7
11.1
Total short-term assets to be financed ............................................................................................................
Short-term payables ..................................................................................................................................
$46.2
27.6
$47.7
25.5
Net short-term assets to be financed ...........................................................................................................
$18.5
$22.2
Imputed short-term debt financing 21 .................................................................................................
$18.5
$22.2
B. Long-term asset financing
Long-term assets to be financed.
Premises ....................................................................................................................................................
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Short-term asset financing
Short-term assets to be financed.
Receivables ...............................................................................................................................................
Materials and supplies ..............................................................................................................................
Prepaid expenses ......................................................................................................................................
$116.2
$123.6
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 prior to providing
credit to the depositing bank. Float is directly
estimated at the service level.
17 Consistent with the Federal Reserve Policy on
Payment System Risk, the Reserve Banks’ priced
services will hold 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
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projected operating expenses is $47.7 million. As
this requirement takes effect on the last day of the
year, the minimum liquid financial assets and
equity requirement is $0.1 million ($47.7 million/
365). The investments and equity imputed to the
priced services balance sheet of $600 million and
$71.9 million, respectively, are greater than the
liquid financial assets and equity required;
therefore no additional imputation is necessary.
18 Includes the allocation of Board of Governors
assets to priced services of $0.7 and $0.6 million
for 2015 and 2014, respectively.
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19 Includes the allocation of Board of Governors
liabilities to priced services of $0.6 million and $0.6
million for 2015 and 2014, respectively.
20 Includes an accumulated other comprehensive
loss of $523.7 million for 2015 and $497.5 million
for 2014, which reflects the ongoing amortization of
the accumulated loss in accordance with FAS 158
[ASC 715]. Future gains or losses, and their effects
on the pro forma balance sheet, cannot be projected.
See table 5 for calculation of required imputed
equity amount.
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TABLE 4—IMPUTED FUNDING FOR PRICED-SERVICES ASSETS—Continued
[Millions of dollars]
2015
2014
Furniture and equipment ...........................................................................................................................
Leasehold improvements and long-term prepayments .............................................................................
Net pension asset .....................................................................................................................................
Deferred tax asset .....................................................................................................................................
39.9
91.5
79.6
222.8
37.6
103.3
39.3
303.1
Total long-term assets to be financed ..............................................................................................................
Postemployment/postretirement benefits and net pension liabilities ........................................................
$550.0
396.3
$606.8
405.2
Net long-term assets to be financed .........................................................................................................
$153.8
$201.6
Imputed long-term debt 21 ........................................................................................................................................
Imputed equity 21 .....................................................................................................................................................
$81.9
71.9
$119.3
82.3
Total long-term financing ...................................................................................................................
$153.8
$201.6
TABLE 5—DERIVATION OF THE 2015 AND 2014 PSAF
[Dollars in millions]
2015
Debt
A. Imputed long-term debt and equity:
Net long-term assets to finance .......................................................
Capital structure observed in market ...............................................
2014
Equity
Debt
Equity
mstockstill on DSK4VPTVN1PROD with NOTICES
21 See
table 5 for calculation.
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 2014, the
22 If
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................
................
$201.6
40.8%
$89.5
................
$64.3
$119.3
................
$82.3
(7.6)
—
................
................
7.6
—
—
—
................
................
—
—
................
$71.9
$119.3
................
$82.3
$18.5 ×
81.9 ×
71.9 ×
0.2% =
5.0% =
10.1% =
$0.0
4.1
7.3
$22.2 ×
119.3 ×
82.3 ×
0.2% =
5.9% =
10.6% =
$0.0
7.0
8.7
................
$11.4
................
................
$15.8
................
................
$3.3
3.3
................
................
................
................
$3.5
4.1
................
6.6
................
................
7.6
................
D. Total PSAF:
As a percent of assets ......................................................................
As a percent of expenses .................................................................
E. Tax rates .............................................................................................
$201.6
59.2%
................
C. Other required PSAF costs:
Sales taxes .......................................................................................
Board of Governors expenses ..........................................................
$153.8
41.8%
................
B. Cost of capital:
Elements of capital costs.
Short-term debt 23 ......................................................................
Long-term debt 23 ......................................................................
Equity 24 .....................................................................................
................
................
$81.9
Pre-adjusted long-term debt and equity ...........................................
Equity adjustments offset by: 22
Imputed long-term debt .............................................................
Imputed investments .................................................................
$153.8
58.2%
................
$18.0
................
................
$23.4
................
................
................
................
................
................
1.3%
4.5%
22.4%
................
................
................
................
................
................
1.6%
5.6%
37.2%
amount of imputed equity was based on the
minimum equity requirements for risk-weighted
assets, or 10%.
23 Imputed short-term debt and long-term debt are
computed at table 4.
24 The 2015 ROE is equal to a risk-free rate plus
a risk premium (beta * market risk premium). The
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2015 after-tax CAPM ROE is calculated as 0.03% +
(1.0 * 7.83%) = 7.86%. Using a tax rate of 22.4%,
the after-tax ROE is converted into a pretax ROE,
which results in a pretax ROE of (7.86%/(1 ¥
22.4%)) = 10.1%. Calculations may be affected by
rounding.
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TABLE 6—COMPUTATION OF 2015 CAPITAL ADEQUACY FOR FEDERAL RESERVE PRICED SERVICES
[Dollars in millions]
Assets
Risk weight
Weighted
assets
Imputed investments:
3-month Treasury bills 25 ......................................................................................................
Federal funds 26 ....................................................................................................................
$—
600.0
........................
0.2
$—
120.0
Total imputed investments ............................................................................................
Receivables .................................................................................................................................
Materials and supplies .................................................................................................................
Prepaid expenses ........................................................................................................................
Items in process of collection ......................................................................................................
Premises ......................................................................................................................................
Furniture and equipment .............................................................................................................
Leasehold improvements and long-term prepayments ...............................................................
Pension asset ..............................................................................................................................
Deferred tax asset .......................................................................................................................
600.0
$34.5
0.6
11.0
151.0
116.2
39.9
91.5
79.6
222.8
0.2
1.0
1.0
0.2
1.0
1.0
1.0
1.0
1.0
$6.9
0.6
11.0
30.2
116.2
39.9
91.5
79.6
222.8
Total .......................................................................................................................
$1,347.2
........................
$718.8
Imputed equity .............................................................................................................................
Capital to risk-weighted assets ....................................................................................................
Capital to total assets ..................................................................................................................
........................
10.0%
5.3%
........................
$71.9
C. Check Service—Table 7 shows the
2013 actual, 2014 estimated, and 2015
budgeted cost-recovery performance for
the commercial check service.
TABLE 7—CHECK SERVICE PRO FORMA COST AND REVENUE PERFORMANCE
[Dollars in millions]
Revenue
2013 (actual) ........................................................................
2014 (estimate) ....................................................................
2015 (budget) .......................................................................
Total expense
Net income
(ROE) [1¥2]
Targeted ROE
Recovery rate
after targeted
ROE [1/(2+4)]
%
1
Year
2
3
4
5
198.9
172.5
151.8
170.7
149.1
142.0
28.2
23.4
9.8
1.7
1.9
2.0
115.4
114.2
105.4
mstockstill on DSK4VPTVN1PROD with NOTICES
1. 2014 Estimate—The Reserve Banks
estimate that the check service will
recover 114.2 percent of total expenses
and targeted ROE, compared with a
2014 budgeted recovery rate of 108.8
percent. Greater-than-expected check
volumes processed by the Reserve
Banks and lower-than-expected costs
have influenced significantly the check
services cost recovery.27 28
The decline in Reserve Bank check
volume, which is attributable to the
decline in the number of checks written
generally, was not as great as
anticipated. Through September, total
forward check volume is 4.5 percent
lower and total return check volume is
12.4 percent lower than for the same
period last year. For full-year 2014, the
Reserve Banks estimate that their total
forward check volume will decline 5.1
percent (compared to a budgeted
decline of nearly 9 percent) and their
total return check volume will decline
13.0 percent (compared to a budgeted
decline of about 14 percent) from 2013
levels.29
2. 2015 Pricing—The Reserve Banks
project that the check service will
recover 105.4 percent of total expenses
and targeted ROE in 2015. The Reserve
Banks project revenue to be $151.8
million, a decline of 12 percent from
2014. This decline is driven largely by
projected reductions in both forward
check and return check volume. The
Reserve Banks estimate that total
Reserve Bank forward check volumes
will decline nearly 7 percent to 5.3
billion and return check volumes will
decline approximately 14 percent to
31.3 million in 2015. Total expenses for
the check service are projected to be
$142.0 million, a decline of nearly 5
percent from 2014. The reduction in
check costs is driven primarily by the
cost savings associated with the
implementation of a more efficient
25 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 https://
www.federalreserve.gov/releases/h15/data.htm.
26 The investments are imputed based on the
amounts arising from the collection of items prior
to providing credit according to established
availability schedules.
27 The greater-than-expected check volume is
attributed to continued enhancements of two
strategic FedForward product offerings, specifically
select mixed and premium mixed.
28 Operating costs are expected to be $2.1 million
lower than the original 2014 budget due to
operational efficiencies in check processing as well
as lower than budgeted information technology
costs. Pension costs are also projected to be $3.5
million under the original budget.
29 Total Reserve Bank forward check volumes are
expected to drop from roughly 6.0 billion in 2013
to 5.7 billion in 2014. Total Reserve Bank return
check volumes are expected to drop from roughly
42.1 million in 2013 to 36.6 million in 2014.
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check processing platform and the full
decommissioning of the legacy
platform.30
The Reserve Banks announced in
October a 12:00 noon deadline (but not
the associated fees) for three deposit
options within the current FedForward
product line, specifically, Mixed,
Premium Mixed D, and Select Mixed
products, to provide an opportunity for
the bank of first deposit to present
forward items to paying banks one day
earlier.31 32 For the Mixed deposit
option, the Reserve Banks will reduce
the per-item fees for tiers 1, 2, 3, and 4
from the current 10:00 a.m. deposition
option, as seen in table 8.33 For the
Select Mixed option, the Reserve Banks
will increase the per-item fees for non-
eligible items from $0.10 to $0.35 and to
implement a $25 ICL surcharge.34 For
the Premium Mixed D option, the
Reserve Banks will charge per-item fees
$0.002 higher than the per-item fees at
the current 1:00 a.m. deadline (with the
exception of the substitute check fee,
which will be $0.20 higher) and a $25
ICL surcharge.35
TABLE 8
FedForward Mixed Image Cash Letter a b
Deadline ...........................................................................................................................
Cash letter fee .................................................................................................................
Tier 1 ........................................................................................................................
Tier 2 ........................................................................................................................
Tier 3 ........................................................................................................................
Tier 4 ........................................................................................................................
Substitute check e .....................................................................................................
9:00 p.m.
1:00 a.m.
$3.50
0.0080
0.0200
0.0300
0.0400
0.1500
$4.50
0.0230
0.0330
0.0500
0.0600
0.1500
5:00 a.m.
12:00 p.m.
$6.50
0.0500
0.0800
0.2000
0.2500
0.3000
$6.50
0.0700
0.1000
0.2200
0.2700
0.3500
FedForward Premium Mixed D Image Cash Letter a b
Deadline ...........................................................................................................................
fee d
Cash letter
...............................................................................................................
Cash letter surcharge c ....................................................................................................
Tier 1 ........................................................................................................................
Tier 2 ........................................................................................................................
Tier 3 ........................................................................................................................
Tier 4 ........................................................................................................................
Substitute check e .....................................................................................................
1:00 a.m.
12:00 p.m.
$500.00
..........................................
0.0040
0.0170
0.0280
0.0390
0.1500
$500.00
25.00
0.0060
0.0190
0.0300
0.0410
0.3500
FedForward Select Mixed Image Cash Letter a b
Deadline ...........................................................................................................................
5:00 a.m.
Level 1
Daily fixed fee ..................................................................................................................
Cash letter surcharge c ....................................................................................................
Tier 1 ................................................................................................................................
Tier 2 ................................................................................................................................
Tier 3 ................................................................................................................................
Non-eligible endpoints .....................................................................................................
Level 2
$2,200.00
....................
0.0020
0.0040
0.0060
0.1000
$900.00
....................
0.0020
0.0060
0.0080
0.1000
12:00 p.m.
Level 1
$2,200.00
25.00
0.0020
0.0040
0.0060
0.3500
Level 2
$900.00
25.00
0.0020
0.0060
0.0080
0.3500
a All
deadlines are Monday through Friday.
current list of FedForward endpoint tier listings can be found at https://www.frbservices.org/servicefees/check21_endpoint_listing.html.
surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the daily fixed fee.
d Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee for each additional cash letter. The maximum number of cash letters per day for the Premium Mixed D product is 35.
e The Reserve Bank’s Check 21 service fees include separate and substantially different fees for the delivery of checks to electronic endpoints
versus paper substitute check endpoints.
bA
c The
mstockstill on DSK4VPTVN1PROD with NOTICES
The Reserve Banks will introduce two
new deposit options to the FedForward
Premium Mixed ICL products, Premium
Mixed E and F, as seen in table 9.
30 The Reserve Banks completed a multi-year
check platform modernization initiative in October
2012.
31 Depository institutions deposit image cash
letters using nine deposit options within the
FedForward product line, which vary in price
structure and funds availability. A current list of
FedForward deposit options can be found at https://
frbservices.org/servicefees/check_services_
2014.html.
32 The Reserve Banks announced the deadline in
October, effective January 2, 2015, to provide both
collecting banks and paying banks enough time to
modify their processes to deposit and receive items
at 12:00 noon and 2:00 p.m., respectively. The
announcement can be found at https://
www.frbservices.org/files/communications/pdf/
check/100314_updated_new_fedforward_deposit_
deadline.pdf.
33 The Mixed product option allows customers to
send forward collection items in a mixed cash letter
at various deadlines for a lower cash letter fee and
higher electronic per-item fee.
34 The Select Mixed product option allows
customers to send forward collection items drawn
on specific endpoints in a separate cash letter,
which combines a high fixed fee with a lower peritem variable fee. All eligible items in the cash letter
receive immediate availability and qualify for the
special pricing while ineligible items receive
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deferred availability of the next business day and
pay a higher per-item fee. A current list of Select
Mixed endpoints can be found at https://
www.frbservices.org/servicefees/check21_endpoint_
listing.html.
35 The Premium Mixed product option allow
customers to send forward collection items within
a specific number of mixed cash letters for a daily
fixed fee and a lower per-item fee. A surcharge, or
overage fee, is charged for each cash letter
deposited over the published threshold. Premium
Mixed depositors are not eligible to use Fine Sort
and Deferred Fine Sort products.
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TABLE 9—FEDFORWARD PREMIUM MIXED IMAGE CASH LETTER A B
Premium Mixed E c
Premium Mixed F c
Deadline
5:00 a.m.
Daily fixed fee d ................................................................................................
Cash letter surcharge e ....................................................................................
Tier 1 ................................................................................................................
Tier 2 ................................................................................................................
Tier 3 ................................................................................................................
Tier 4 ................................................................................................................
Substitute Checks f ...........................................................................................
$325.00
........................
0.0040
0.0170
0.0280
0.0390
0.3000
12:00 p.m.
$325.00
25.00
0.0060
0.0190
0.0300
0.0410
0.3500
5:00 a.m.
$650.00
........................
0.0040
0.0170
0.0280
0.0390
0.3000
12:00 p.m.
$650.00
25.00
0.0060
0.0190
0.0300
0.0410
0.3500
a All
deadlines are Monday through Friday.
current list of FedForward endpoint tier listings can be found at https://www.frbservices.org/servicefees/check21_endpoint_listing.html.
Mixed E and Premium Mixed F products are not eligible to use Fine Sort or Deferred Fine Sort products.
d Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee for each additional cash letter. The maximum number of cash letters per day for Premium Mixed E and Premium Mixed F is 30 and 60, respectively.
e The surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the daily fixed fee.
f The Reserve Bank’s Check 21 service fees include separate and substantially different fees for the delivery of checks to electronic endpoints
versus paper substitute check endpoints.
bA
c Premium
The Reserve Banks will increase the
FedForward Deferred Mixed ICL
product per-item fees at the 5:00 a.m.
and 10:00 a.m. deadlines by $0.002 and
$0.004, respectively. They also will
increase the FedForward Deferred Fine
Sort ICL product per-item fees at the
5:00 a.m. and 10:00 a.m. deadlines by
$0.001 and $0.002, respectively. The
Reserve Banks hope to encourage
depositors to shift volume from the
deferred-availability product to one of
the immediate-availability options at
12:00 noon. The Reserve Banks estimate
that the price changes will result in an
approximate 0.5 percent average price
decrease for check customers.
Risks to the Reserve Banks’ ability to
achieve budgeted 2015 cost recovery for
the check service include greater-thanexpected check volume losses due to
reductions in check writing overall and
competition from correspondent banks,
aggregators, and direct exchanges,
which would result in lower-thananticipated revenue, and higher-thanexpected support and overhead costs.
D. FedACH Service—Table 10 shows
the 2013 actual, 2014 estimate, and 2015
budgeted cost-recovery performance for
the commercial FedACH service.
TABLE 10—FEDACH SERVICE PRO FORMA COST AND REVENUE PERFORMANCE
[Dollars in millions]
Revenue
2013 (actual) ........................................................................
2014 (estimate) ....................................................................
2015 (budget) .......................................................................
mstockstill on DSK4VPTVN1PROD with NOTICES
1. 2014 Estimate—The Reserve Banks
estimate that the FedACH service will
recover 86.5 percent of total expenses
and targeted ROE, compared with a
2014 budgeted recovery rate of 99.2
percent. The shortfall in the FedACH
Service is due to a $31.6 million charge
related to its investment associated with
a multiyear technology initiative to
modernize its processing platform.36
The Reserve Banks’ long-term cost
recovery average, from 2003 to 2014, is
102.1 percent. Through September,
FedACH commercial origination and
36 The Reserve Banks have been engaged in a
multiyear technology initiative to modernize the
FedACH processing platform by migrating the
service from a mainframe system to a distributed
computing environment. In late 2013, the Reserve
Banks conducted an assessment focused on the
viability and cost-effectiveness of the program. As
a result, the Reserve Banks in 2014 suspended the
program and began to investigate the use of other
technology solutions.
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Total expense
Net income
(Roe) [1–2]
Targeted roe
Recovery rate
after targeted
Roe [1/(2+4)]
1
Year
2
3
4
5
118.9
123.3
124.4
116.3
140.9
122.6
receipt volume was 4.1 percent higher
than it was during the same period last
year. The Reserve Banks believe that the
volume growth will continue at the
same pace for the full year 2014, higher
than the 3.0 budgeted volume increase.
2. 2015 Pricing—The Reserve Banks
expect the FedACH service to recover
100.0 percent of total expenses and
targeted ROE in 2015. FedACH
commercial origination and receipt
volume is projected to grow 3.5 percent
contributing to an increase of $1.1
million in total revenue from the 2014
estimate. Total expenses are budgeted to
decrease $900 thousand from 2014
budgeted expenses of $125.3 million,
primarily because of efficiencies gained
from synergies between the check and
ACH operations.
The Reserve Banks will modify the
FedACH Minimum Origination Fee
calculation to include fees associated
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2.6
¥17.6
1.8
1.2
1.7
1.7
101.2%
86.5
100.0
with SameDay and FedGlobal
origination transactions in the
computation.37 The Reserve Banks will
reduce the tier volume thresholds for
the FedACH Risk Management Services
from 500,000 to 100,000 items reviewed
per month.
The primary risks to the Reserve
Banks’ ability to achieve budgeted 2015
cost recovery for the FedACH service
are cost overruns associated with
unanticipated problems related to
infrastructure currency efforts and
higher-than-expected support and
overhead costs. Other risks include
lower-than-expected volume and
associated revenue due to unanticipated
37 Each Originating Depository Financial
Institution (ODFI) is charged a minimum of $35 per
month in forward value and non-value item
origination fees. The fees associated with domestic
FedACH, SameDay, and FedGlobal originations are
collectively subject to the minimum fee.
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mergers and acquisitions and loss of
market share due to direct exchanges
and a shift of volume to the privatesector operator.
E. Fedwire Funds and National
Settlement Services—Table 11 shows
the 2013 actual, 2014 estimate, and 2015
budgeted cost-recovery performance for
the Fedwire Funds and National
Settlement Services.
TABLE 11—FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES PRO FORMA COST AND REVENUE PERFORMANCE
[dollars in millions]
Revenue
Total expense
Net income
(ROE) [1–2]
Targeted ROE
Recovery rate
after targeted
ROE [1/(2+4)]
%
1
Year
2
3
4
5
2013 (actual) ........................................................................
2014 (estimate) ....................................................................
2015 (budget) .......................................................................
1. 2014 Estimate — The Reserve
Banks estimate that the Fedwire Funds
and National Settlement Services will
recover 101.3 percent of total expenses
and targeted ROE, compared with a
2014 budgeted recovery rate of 98.0
percent. The higher-than-budgeted cost
recovery is primarily due to lower-thanexpected operating costs, which offset
weaker-than-anticipated volumes and
associated revenue.
Through September, Fedwire Funds
Service online volume was 0.6 percent
lower than for the same period last year.
For full-year 2014, the Reserve Banks
estimate Fedwire Funds Service online
volume to decline 1.1 percent from 2013
levels, compared to the 3.8 percent
volume increase that had been
budgeted. Through September, National
Settlement Service settlement file
volume was unchanged from the same
period last year, while settlement entry
volume was 5.6 percent lower. For the
full year, the Reserve Banks estimate
that settlement file volume will decrease
2.8 percent (same as budgeted) and
96.7
109.5
112.2
¥0.3
2.9
2.4
97.1
106.6
109.8
settlement entry volume will decrease
7.3 percent from 2013 levels (compared
to a budgeted 1.8 percent increase).
2. 2015 Pricing—The Reserve Banks
expect the Fedwire Funds Service to
recover 100.8 percent of total expenses
and targeted ROE. Revenue is projected
to be $112.2 million, an increase of 2.5
percent from 2014. The Reserve Banks
project total expenses to be $3.2 million
higher than the 2014 estimate.
The Reserve Banks will adjust the
incentive pricing fees for the Fedwire
Funds Service by increasing the Tier 1
per item pre-incentive fee (the fee before
volume discounts are applied) from
$0.69 to $0.73 and increasing the Tier 3
per item pre-incentive fee from $0.14 to
$0.15. The Reserve Banks intend to keep
the Tier 2 per-item pre-incentive fee the
same.
The Reserve Banks will decrease the
surcharge for transfers exceeding $10
million from $0.15 to $0.14.
The Reserve Banks will increase the
FedPayments Manager import/export
monthly fee from $45 to $50. In
1.0
1.5
1.5
98.6
101.3
100.8
addition, the Reserve Banks will
increase the offline transaction
surcharge from $45 to $50. The Reserve
Banks estimate that the price changes
will result in an approximate 4.7
percent average price increase for
Fedwire Funds customers.
The Reserve Banks will not change
National Settlement Service fees for
2015. The Reserve Banks’ Fedwire
Funds and National Settlement Services
fees are consistent with their multi-year
strategy to minimize pricing volatility
while undertaking ongoing technology
upgrades and related projects to further
strengthen information security.
The primary risk to the Reserve
Banks’ ability to achieve budgeted 2015
cost recovery for these services is cost
overruns and schedule delays from
unanticipated problems with managing
complex technology programs.
F. Fedwire Securities Service—Table
12 shows the 2013 actual, 2014
estimate, and 2015 budgeted cost
recovery performance for the Fedwire
Securities Service.38
TABLE 12—FEDWIRE SECURITIES SERVICE PRO FORMA COST AND REVENUE PERFORMANCE
[dollars in millions]
Revenue
mstockstill on DSK4VPTVN1PROD with NOTICES
2013 (actual) ........................................................................
2014 (estimate) ....................................................................
2015 (budget) .......................................................................
Total expense
Net income
(ROE) [1–2]
Targeted ROE
Recovery rate
after targeted
ROE [1/(2+4)]
%
1
Year
2
3
4
5
26.9
23.8
26.0
25.3
23.4
26.5
1.5
0.4
¥0.6
0.2
0.3
0.4
105.0
100.1
96.5
1. 2014 Estimate— The Reserve Banks
estimate that the Fedwire Securities
Service will recover 100.1 percent of
total expenses and targeted ROE,
compared with a 2014 budgeted
recovery rate of 98.0 percent. The
38 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 nonTreasury 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.
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higher-than-expected cost recovery is
primarily due to lower-than-budgeted
information technology and pension
costs, which offset weaker-thananticipated volumes and associated
revenue.
Through September, Fedwire
Securities Service online volume was
31.5 percent lower than the same period
last year. For full-year 2014, the Reserve
Banks estimate Fedwire Securities
Service online volume to decline 30.8
percent from 2013 levels, compared to
a budgeted decline of 10.9 percent.
2. 2015 Pricing—The Reserve Banks
expect the Fedwire Securities Service to
recover 96.5 percent of total expenses
and targeted ROE in 2015. The Reserve
Banks project that 2015 revenue and
expenses will increase by $2.2 million
and $3.1 million, respectively,
compared to 2014 estimates.
The Reserve Banks project that online
transfer activity will decline by 12.9
percent in 2015, the number of accounts
maintained will decrease by 14.1
percent, and the number of agency
securities maintained will increase by
0.1 percent.39 The projected decline in
account maintenance activity reflects
customer closures of empty accounts to
avoid unnecessary expenses and
increased competition in collateral
management services.40 The Reserve
Banks also estimate a decrease in online
transfer activity, driven by lower
expected issuance of mortgage-backed
and agency debt securities. The
reduction in mortgage-backed securities
issuance reflects gradually increasing
interest rates and lower anticipated
mortgage refinancing. The reduction in
agency debt issuance reflects a further
required reduction in government
sponsored enterprise portfolios, which
has led to a reduced funding need for
new debt issuance.
Expenses are budgeted to increase by
$3.1 million from 2014 estimates,
reflecting higher technology upgrade
costs. The higher technology upgrade
costs, however, are expected to be
partially offset by higher Treasury
reimbursements.41
39 The online transfer fee, monthly account
maintenance fee, and monthly issue maintenance
fee accounted for 92 percent of total Fedwire
Securities Service revenue through June 2014.
40 Specifically, collateral management services
refers to the Fedwire Securities Joint Custody
Service, which facilitates the collateralization of
deposits made by a government entity, through the
pledging of book-entry securities by its depository
institution. Approximately 72 percent of Fedwire
Securities priced accounts are collateral accounts
related to the Joint Custody Service.
41 Treasury reimbursement is calculated by
multiplying costs by the ratio of Treasury to agency
transfers. In 2015, Treasury projects its transfer
volume will remain flat, while the Reserve Banks
expect agency transfers to decrease. Therefore, the
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The Reserve Banks will increase
various fees for the Fedwire Securities
Service. The Reserve Banks will
increase the online transfer fee from
$0.54 to $0.65, the monthly account
maintenance fee from $40 to $48, and
the monthly issue maintenance fee from
$0.54 to $0.65 per issue. The Reserve
Banks will also increase the Joint
Custody Origination Surcharge from $40
to $44. The Reserve Banks estimate that
the price changes will result in an
approximate 19.1 percent average price
increase for Fedwire Securities
customers.
The primary risk to the Reserve
Banks’ ability to achieve budgeted 2015
cost recovery for these services is cost
overruns and schedule delays from
unanticipated problems with managing
complex technology upgrades.
G. FedLine Access—The Reserve
Banks charge fees for the electronic
connections that depository institutions
use to access priced services and
allocate the costs and revenue
associated with this electronic access to
the various priced services. There are
currently five FedLine channels through
which customers can access the Reserve
Banks’ priced services: FedMail,
FedLine Web®, FedLine Advantage,
FedLine Command®, and FedLine
Direct.42 The Reserve Banks package
these channels into ten FedLine
packages, described in the two
paragraphs below, that are
supplemented by a number of premium
`
(or a la carte) access and accounting
information options. In addition, the
Reserve Banks offer FedComplete
packages, which are bundled offerings
of a FedLine Advantage connection and
a fixed number of FedACH, Fedwire
Funds, and Check 21-enabled services.
Five attended access packages offer
access to critical payment and
information services via a Web-based
interface. The FedLine Exchange
package (formerly the FedMail Email
package) provides access to basic
information services via email, while
two FedLine Web packages offer an
email option plus online attended
access to a range of services, including
cash services, FedACH information
services, and check services. Three
FedLine Advantage packages expand
upon the FedLine Web packages and
offer attended access to critical
transactional services: FedACH,
Fedwire Funds, and Fedwire Securities.
higher projected ratio of Treasury to agency
transfers will result in Treasury reimbursing a
higher portion of total costs.
42 FedMail, FedLine Web, FedLine Advantage,
FedLine Command, and FedLine Direct are
registered trademarks of the Federal Reserve Banks.
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Four unattended access packages are
computer-to-computer, IP-based
interfaces designed for medium- to highvolume customers. The FedLine
Command package offers an unattended
connection to FedACH, as well as most
accounting information services. The
three remaining packages are FedLine
Direct packages, which allow for
unattended connections at one of three
connection speeds to FedACH, Fedwire
Funds, and Fedwire Securities
transactional and information services
and to most accounting information
services.43
Many of the FedLine access solutions
fees in 2015 are designed to encourage
customers to migrate to more efficient
access solutions. The Reserve Banks
will increase the fees on legacy services,
such as an additional $10 per month for
FedMail Fax, $300 per month for
FedLine Direct (56K), and $400 for an
additional 56K connection. The Reserve
Banks also will introduce a $2,500 per
month surcharge for those depository
institutions that continue to use the
AT&T VPN after February 1, 2015,
instead of migrating to the Sprint VPN.
In addition, the Reserve Banks will
make other changes to FedLine pricing
for 2015 to improve contingency
preparedness between Reserve Banks
and depository institutions. In
particular, the Reserve Banks will add to
the FedLine Advantage channel a new
package, FedLine Advantage Premier
that will be priced at $500 per month
and includes a secondary VPN device.44
FedLine Advantage Premier will also
include the FedTransaction Analyzer®
tool, which enables depository
institutions to streamline after-the-fact
analysis of payment transactions and
automate reporting processes.
Depository institutions with more than
250 Fedwire transactions, or more than
one routing number, will have access to
the FedTransaction Analyzer tool via
FedLine Advantage Premier rather than
FedLine Advantage Plus package.45
The Reserve Banks will introduce two
new tiers to FedComplete package
solutions called FedComplete 100
Premier and FedComplete 200 Premier,
43 The FedLine Direct base-level package is
available to current customers only and will be
phased out in 2015 due to elimination of 56K line
speed.
44 All customers, regardless of their chosen
electronic access channel, are responsible for the
purchase and installation of each VPN device.
45 Current FedTransaction Analyzer customers
will be automatically moved to FedLine Advantage
Premier if they originate and receive more than 250
Fedwire funds transfers or have more than one
routing number in a given month. Customers can
opt out of the increased fees by discontinuing their
use of the FedTransaction Analyzer tool or the
FedLine Advantage access solution.
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
which are $850 and $1,375 per month,
respectively. These FedComplete
packages include FedLine Advantage
Premier.
II. Analysis of Competitive Effect
All operational and legal changes
considered by the Board that have a
substantial effect on payments system
participants are subject to the
competitive impact analysis described
in the March 1990 policy, The Federal
Reserve in the Payments System.46
Under this policy, the Board assesses
whether proposed 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.
The changes for 2015 are limited to
product enhancements and pricing
modifications; no new products or
pricing constructs are introduced. These
changes 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 changes
should permit the Reserve Banks to earn
a ROE that is comparable to overall
market returns and provide for full cost
recovery over the long run.
III. 2015 Fee Schedules
FEDACH SERVICE 2015 FEE SCHEDULE
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
mstockstill on DSK4VPTVN1PROD with NOTICES
Fee
FedACH minimum monthly fee.
Originating Depository Financial Institution (ODFI) 47 .............................................................................................
Receiving Depository Financial Institution (RDFI) 48 ...............................................................................................
Origination (per item or record) 49.
Forward or return items in small files ......................................................................................................................
Forward or return items in large files ......................................................................................................................
Addenda record .......................................................................................................................................................
FedLine Web®-originated returns and notification of change (NOC) fee 50 ...........................................................
Facsimile exception returns/NOC 51 ........................................................................................................................
Automated NOC fee ................................................................................................................................................
Volume-based discounts (based on monthly billed receipt volume) 52.
Per item when receipt volume is 10,000,001 to 17,500,000 items per month ................................................
Per item when receipt volume is more than 17,500,000 items per month .....................................................
Receipt (per item or record).
Forward item ............................................................................................................................................................
Return item ..............................................................................................................................................................
Addenda record .......................................................................................................................................................
On-us receipt credit 53 .............................................................................................................................................
Volume-based discounts (forward items excluding FedACH SameDay service items).
Non-Premium Receivers—RDFIs receiving less than 90 percent of total network volume through FedACH.
Per item when volume is 1,000,001 to 12,500,000 items per month 54 ..........................................................
Per item when volume is more than 12,500,000 items per month 55 ..............................................................
Premium Receivers, level one—RDFIs receiving at least 90 percent of FedACH-originated volume through
FedACH.
Per item when volume is 1,000,001 to 2,500,000 items per month 58 ............................................................
Per item when volume is 2,500,001 to 12,500,000 items per month 58 ..........................................................
Per item when volume is more than 12,500,000 items per month.59
Premium Receivers, level two—RDFIs receiving at least 90 percent of ACH volume originated through
FedACH or EPN.
Per item when volume is 1,000,001 to 2,500,000 items per month 58 ............................................................
Per item when volume is 2,500,001 to 12,500,000 items per month 58 ..........................................................
Per item when volume is more than 12,500,000 items per month 59 ..............................................................
FedACH SameDay Service.
Origination 56 57.
Forward item in a small file ..............................................................................................................................
Forward item in a large file ..............................................................................................................................
Addenda record ................................................................................................................................................
Return item in a small file ................................................................................................................................
Return item in a large file .................................................................................................................................
Return addenda record ....................................................................................................................................
Receipt 58.
Forward item ....................................................................................................................................................
Return item .......................................................................................................................................................
Addenda record (forward/return) ......................................................................................................................
Monthly FedACH Risk® Management fees 59.
Risk Origination Monitoring Service/RDFI Alert Service package pricing.
For up to 5 criteria sets ....................................................................................................................................
For 6 through 11 criteria sets ...........................................................................................................................
For 12 through 23 criteria sets .........................................................................................................................
46 Federal Reserve Regulatory Service (FRRS) 9–
1558.
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$35.00.
25.00.
0.0030.
0.0025.
0.0015.
0.35.
45.00.
0.20.
0.0002 discount.
0.0003 discount.
0.0025.
0.0075.
0.0015.
0.0025 discount.
0.0007 discount.
0.0009 discount.
0.0007 discount.
0.0008 discount.
0.0010 discount.
0.0007 discount.
0.0009 discount.
0.0011 discount.
0.0030
0.0035
0.0015
0.0030
0.0025
0.0015
surcharge.
surcharge.
surcharge.
discount.
discount.
discount.
0.0025 discount.
0.0075 discount.
0.0015 discount.
35.00.
70.00.
125.00.
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
FEDACH SERVICE 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
mstockstill on DSK4VPTVN1PROD with NOTICES
Fee
For 24 through 47 criteria sets .........................................................................................................................
For 48 through 95 criteria sets .........................................................................................................................
For 96 through 191 criteria sets .......................................................................................................................
For 192 through 383 criteria sets .....................................................................................................................
For 384 through 584 criteria sets .....................................................................................................................
For 585+ criteria sets .......................................................................................................................................
Risk origination monitoring batch.
For 1 through 100,000 batches .....................................................................................................................
For 100,000+ batches .....................................................................................................................................
Monthly FedPayments Reporter Service.
FedPayments Reporter Service package pricing includes.
Standard reports 60.
ACH volume summary by SEC code report—customer.61
Daily return ratio report.
Monthly return ratio report.
Receiver setup report.
Report delivery via FedLine file access solution (monthly fee).
For up to 50 reports ..................................................................................................................................
For 51 through 150 reports ..............................................................................................................................
For 151 through 500 reports ............................................................................................................................
For 501 through 1,000 reports .........................................................................................................................
For 1,001 through 1,500 reports ......................................................................................................................
For 1,501 through 2,500 reports ......................................................................................................................
For 2,501 through 3,500 reports ......................................................................................................................
For 3,501 through 4,500 reports ......................................................................................................................
For 4,501 through 5,500 reports ......................................................................................................................
For 5,501 through 7,000 reports ......................................................................................................................
For 7,001 through 8,500 reports ......................................................................................................................
For 8,501+ reports ...........................................................................................................................................
Premier reports 62.
ACH volume summary by SEC code report—depository financial institution.
Reports 1 through 5 ..................................................................................................................................
Reports 6 through 10 ................................................................................................................................
Reports 11+ ..............................................................................................................................................
On Demand ...............................................................................................................................................
ACH volume summary by SEC code report—customer On Demand .............................................................
Monthly ACH routing number activity report.
Reports 1 through 5 ..................................................................................................................................
Reports 6 through 10 ................................................................................................................................
Reports 11+ ..............................................................................................................................................
On-us inclusion.
Participation fee ................................................................................................................................................
Per-item fee ......................................................................................................................................................
Per-addenda fee ...............................................................................................................................................
Report delivery via encrypted email ........................................................................................................................
Other fees.
Monthly fee (per routing number).
Account servicing fee 63 ...................................................................................................................................
FedACH settlement 64 ......................................................................................................................................
Information extract file ......................................................................................................................................
IAT Output File Sort .........................................................................................................................................
Notification of change participation fee 65 ........................................................................................................
Non-electronic input/output fee 66.
CD or DVD input/output ...................................................................................................................................
Paper input/output ............................................................................................................................................
FedGlobal ACH Payments.
Canada service fee.
Item originated to Canada 67 .....................................................................................................................
Return received from Canada 68 ...............................................................................................................
Trace of item at receiving gateway ...........................................................................................................
Trace of item not at receiving gateway ....................................................................................................
Mexico service fee.
Item originated to Mexico 67 ......................................................................................................................
Return received from Mexico 68 ................................................................................................................
Item trace ..................................................................................................................................................
A2R item originated to Mexico 67 69 ...........................................................................................................
F3X item originated to Mexico 68 70 ...........................................................................................................
Panama service fee.
Item originated to Panama 67 ....................................................................................................................
Return received from Panama 68 ..............................................................................................................
Item trace ..................................................................................................................................................
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150.00.
250.00.
425.00.
675.00.
850.00.
1,100.00.
0.007/batch.
0.0035/batch.
35.00.
55.00.
100.00.
180.00.
260.00.
420.00.
580.00.
740.00.
900.00.
1,100.00.
1,300.00.
1,500.00.
10.00/report.
6.00/report.
1.00/report.
1.00/report surcharge.
1.00/report surcharge.
10.00/report.
6.00/report.
1.00/report.
10.00/month/RTN.
0.0030.
0.0015.
0.20/email.
45.00.
55.00.
100.00.
75.00.
5.00.
50.00.
50.00.
0.62.
0.99.
5.50
7.00.
0.67.
0.91.
13.50.
3.45.
0.67.
0.72.
1.00.
7.00.
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
FEDACH SERVICE 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
Fee
NOC ..........................................................................................................................................................
Latin America service fee.
A2R item originated to Latin America 67 69 ................................................................................................
Return received from Latin America 68 .....................................................................................................
Item trace ..................................................................................................................................................
Europe service fee.
Item originated to Europe 67 ......................................................................................................................
F3X item originated to Europe 67 70 ...........................................................................................................
Return received from Europe 68 ................................................................................................................
Item trace ..................................................................................................................................................
0.72.
4.40.
0.72.
5.00.
1.25.
1.25.
1.35.
7.00.
FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES 2015 FEE SCHEDULE
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
Fee
Fedwire Funds Service
Monthly participation fee ..................................................................................................................................................................
Basic volume-based pre-incentive transfer fee (originations and receipts).
Per transfer for the first 14,000 transfers per month .............................................................................................................
Per transfer for additional transfers up to 90,000 per month ......................................................................................................
Per transfer for every transfer over 90,000 per month ..........................................................................................................
Volume-based transfer fee with the incentive discount (originations and receipts) 71.
Per eligible transfer for the first 14,000 transfers per month ...............................................................................................
Per eligible transfer for additional transfers up to 90,000 per month ..........................................................................................
Per eligible transfer for every transfer over 90,000 per month .............................................................................................
Surcharge for offline transfers (originations and receipts) ..........................................................................................................
Surcharge for high-value payments > $10 million .........................................................................................................................
Surcharge for high-value payments > $100 million ............................................................................................................................
Surcharge for payment notification ......................................................................................................................................................
Surcharge for late-day transfer originations 72 ....................................................................................................................................
Monthly FedPayments Manager import/export fee 73 ....................................................................................................................
$90.00
0.73
0.24
0.15
0.148
0.048
0.030
50.00
0.14
0.36
0.20
0.26
50.00
National Settlement Service
mstockstill on DSK4VPTVN1PROD with NOTICES
Basic
Settlement entry fee .....................................................................................................................................................................
Settlement file fee .........................................................................................................................................................................
Surcharge for offline file origination .....................................................................................................................................................
47 Any ODFI incurring less than 35 in forward
value and non-value item origination fees will be
charged a variable amount to reach the minimum.
48 Any RDFI not originating forward value and
non-value items and incurring less than 25 in
receipt fees will be charged a variable amount to
reach the minimum.
49 Small files contain fewer than 2,500 items and
large files contain 2,500 or more items.
50 The fee includes the item and addenda fees in
addition to the conversion fee.
51 The fee includes the item and addenda fees in
addition to the conversion fee. Reserve Banks also
assess a 30 fee for every government paper return/
NOC they process.
52 Origination discounts apply only to those items
received by FedACH receiving points and are
available only to Premium Receivers.
53 Depository institutions originating and
receiving items on the same routing number.
54 This per-item discount is a reduction to the
standard receipt fees listed in this fee schedule.
55 Receipt volumes of more than 12,500,000 items
per month qualify for the waterfall discount which
includes all FedACH receipt items.
56 This per-item surcharge is in addition to the
standard origination fees for forward items.
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57 This per-item discount is a reduction to the
standard origination fees for return items.
58 This per-item discount is a reduction to the
standard receipt fees.
59 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.
60 Standard reports include Customer Transaction
Activity, Death Notification, International (IAT),
Notification of Change, Payment Data Information
File, Remittance Advice Detail, Remittance Advice
Summary, Return Item, Return Ratio, Social
Security Beneficiary, and Originator Setup Reports.
61 ACH volume summary by SEC code reports
generated on demand are subject to a 1.00 per
report surcharge.
62 Premier reports generated on demand are
subject to the package/tiered fees plus a surcharge.
63 The account servicing fee applies to routing
numbers that have received or originated FedACH
transactions. Institutions that receive only U.S.
government transactions through the Reserve Banks
or that elect to use EPN exclusively are not assessed
this fee.
64 The FedACH settlement fee is applied to any
routing number with activity during a month,
including institutions that elect to use EPN
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1.50
30.00
45.00
exclusively but also have items routed to or from
customers that access the ACH network through
FedACH. This fee does not apply to routing
numbers that use the Reserve Banks for only U.S.
government transactions.
65 The notification of change fee is applied to any
routing number with activity during a month. This
fee does not apply to routing numbers that use the
Reserve Banks for only U.S. government
transactions.
66 Limited services are offered in contingency
situations.
67 This per-item surcharge is in addition to the
standard domestic origination and input file
processing fees.
68 This per-item surcharge is in addition to the
standard domestic receipt fees.
69 Account-to-receiver (A2R) allows funds from
accounts at a U.S. depository institution to be
retrieved by any receiver at either a participating
bank location or a trusted, third-party provider.
70 Payments are both transferred and received in
foreign currency. The foreign exchange rate and
settlement is managed and processed by
participating U.S. depository institutions and the
respective foreign gateway operators via their
foreign correspondent banks.
E:\FR\FM\06NON1.SGM
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65952
Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
Fee
Minimum monthly charge (account maintenance) 74 ...........................................................................................................................
Special settlement arrangements 75.
Fee per day ..................................................................................................................................................................................
60.00
150.00
FEDWIRE SECURITIES SERVICE 2015 FEE SCHEDULE
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
Fee
Basic transfer fee
Transfer or reversal originated or received ............................................................................................................................
Surcharge.
Offline origination & receipt surcharge .........................................................................................................................................
Monthly maintenance fees
Account maintenance (per account) ........................................................................................................................................
Issues maintained (per issue/per account) .............................................................................................................................
Claim adjustment fee ...........................................................................................................................................................................
Joint Custody Origination Surcharge .............................................................................................................................................
$0.65
66.00
48.00
0.65
0.75
44.00
FEDLINE 2015 FEE SCHEDULE
[Effective January 2, 2015. Bold indicates changes from 2014 prices.]
FedComplete Packages (monthly) 76
mstockstill on DSK4VPTVN1PROD with NOTICES
FedComplete 100 Plus .........................................................................................................................................................................
Includes: 7,500 FedForward transactions.
70 FedReturn® transactions.
14,000 FedReceipt® transactions.
35 Fedwire funds origination transfers.
35 Fedwire funds receipt transfers.
Fedwire participation fee.
1,000 FedACH origination items.
FedACH minimum fee.
7,500 FedACH receipt items.
FedACH receipt minimum fee.
10 FedACH web return/NOC.
500 FedACH addenda originated.
1,000 FedACH addenda received.
FedACH account servicing.
FedACH settlement.
FedLine Advantage Plus.
FedLine subscriber 5-pack.
FedLine Exchange subscriber 5-pack.
FedComplete 100 Premier ...................................................................................................................................................................
Includes: 7,500 FedForward transactions.
70 FedReturn transactions.
14,000 FedReceipt transactions.
35 Fedwire funds origination transfers.
35 Fedwire funds receipt transfers.
Fedwire participation fee.
1,000 FedACH origination items.
FedACH minimum fee.
7,500 FedACH receipt items.
FedACH receipt minimum fee.
71 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 prior activity, then the customer qualifies
automatically for incentive discounts for the year.
VerDate Sep<11>2014
19:46 Nov 05, 2014
Jkt 235001
The applicable incentive discounts are as follows:
$0.582 for transfers up to 14,000; $0.192 for
transfers 14,001 to 90,000; and $0.120 for transfers
over 90,000.
72 This surcharge applies to originators of
transfers that are processed by the Reserve Banks
after 5:00 p.m. ET.
73 This fee is charged to any Fedwire Funds
participant that originates a transfer message via the
FedPayments Manager (FPM) Funds tool and has
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$775.00.
850.00.
the import/export processing option setting active
at any point during the month.
74 This minimum monthly charge is only assessed
if total settlement charges during a calendar month
are less than $60.
75 Special settlement arrangements use Fedwire
Funds transfers to effect settlement. Participants in
arrangements and settlement agents are also
charged the applicable Fedwire Funds transfer fee
for each transfer into and out of the settlement
account.
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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
65953
FEDLINE 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices.]
mstockstill on DSK4VPTVN1PROD with NOTICES
FedComplete Packages (monthly) 76
10 FedACH web return/NOC.
500 FedACH addenda originated.
1,000 FedACH addenda received.
FedACH account servicing.
FedACH settlement.
FedLine Advantage Premier.
FedLine subscriber 5-pack.
FedLine Exchange subscriber 5-pack.
FedComplete 200 Plus .........................................................................................................................................................................
Includes: 25,000 FedForward transactions.
225 FedReturn transactions.
25,000 FedReceipt transactions.
100 Fedwire funds origination transfers.
100 Fedwire funds receipt transfers.
Fedwire participation fee.
2,000 FedACH origination items.
FedACH minimum fee.
25,000 FedACH receipt items.
FedACH receipt minimum fee.
20 FedACH web return/NOC.
750 FedACH addenda originated.
1,500 FedACH addenda received.
FedACH account servicing.
FedACH settlement.
FedLine Advantage Plus.
FedLine subscriber 5-pack.
FedLine Exchange subscriber 5-pack.
FedComplete 200 Premier ...................................................................................................................................................................
Includes: 25,000 FedForward transactions.
225 FedReturn transactions.
25,000 FedReceipt transactions.
100 Fedwire funds origination transfers.
100 Fedwire funds receipt transfers.
Fedwire participation fee.
2,000 FedACH origination items.
FedACH minimum fee.
25,000 FedACH receipt items.
FedACH receipt minimum fee.
20 FedACH web return/NOC.
750 FedACH addenda originated.
1,500 FedACH addenda received.
FedACH account servicing.
FedACH settlement.
FedLine Advantage Premier.
FedLine subscriber 5-pack.
FedLine Exchange subscriber 5-pack.
FedComplete Excess Volume Surcharge. 77
FedForward .....................................................................................................................................................................................
FedReturn .......................................................................................................................................................................................
Fedwire funds origination ................................................................................................................................................................
FedACH origination .........................................................................................................................................................................
FedComplete package credit incentive 78 ..............................................................................................................................................
FedLine Customer Access Solutions (monthly). 79
FedLine Exchange (formerly FedMail Email) ....................................................................................................................................
FedLine Web .........................................................................................................................................................................................
Includes: FedLine Exchange.
FedLine Web with no priced services subscriptions.
FedACH information services (includes RDFI file alert service).
Check 21 services. 80
Check 21 duplicate notification.
Check adjustments.
Service charge information.
Account management information. 81
FedLine Web Plus ................................................................................................................................................................................
Includes:FedLine Web traditional package.
FedACH risk management services.
FedACH FedPayments Reporter Service via secure email.
Check large dollar return.
Check FedImage® services.
Account management information.
Cash management plus service.
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E:\FR\FM\06NON1.SGM
06NON1
1,300.00.
1,375.00.
0.01/item.
0.7500/item.
0.7000/item.
0.0025/item.
(1,500.00).
40.00.
110.00.
140.00.
65954
Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
FEDLINE 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices.]
mstockstill on DSK4VPTVN1PROD with NOTICES
FedComplete Packages (monthly) 76
Various accounting and other inquiry and report services (Real-time Account Balance information, Daylight Overdraft Balance, and Available Funds Balance information; drill down and search features to view transaction details; daily Statement
of Account and data files; collateral totals and details; and ex-post Daylight Overdraft reports)..
FedLine Advantage ..............................................................................................................................................................................
Includes: FedLine Web traditional package.
FedACH transactions.
Fedwire funds transactions.
Fedwire securities transactions.
Fedwire cover payments.
Check large dollar return.
Check FedImage services.
Account management information.
Various accounting services (ABMS inquiry, IAS/PSR inquiry, IAS detailed inquiries, notifications and advices, end-of-day accounting file (PDF)).
FedLine Advantage Plus .....................................................................................................................................................................
Includes: FedLine Advantage traditional package.
FedACH risk management services.
FedACH FedPayments Reporter Service via secure email.
Fedwire Funds FedPayments Manager import/export.
FedTransaction Analyzer (less than 250 FedWire transactions and one routing number per month).
Account management information with intra-day search.
FedLine Advantage Premier ...............................................................................................................................................................
Includes: FedLine Advantage Plus package with no priced services subscriptions.
FedTransaction Analyzer (more than 250 Fedwire transactions and two routing numbers per month).
Secondary VPN device.
FedLine Command Plus ......................................................................................................................................................................
Includes: FedLine Advantage Plus package.
FedLine Command with two certificates.
Fedwire statement services.
Intra-day CI file.
Statement of account spreadsheet file (SASF).
Financial Institution Reconcilement Data File (FIRD).
Billing Data Format File (BDFF).
FedLine Direct. 82 .................................................................................................................................................................................
Includes: FedLine Advantage traditional package.
56K Dedicated WAN Connection.
FedLine Command with two certificates.
FedLine Direct with two certificates.
Fedwire statement services.
Intra-day file (I-Day CI File).
Statement of Account Spreadsheet File (SASF).
Financial Institution Reconcilement Data File (FIRD).
Billing Data Format File (BDFF).
FedLine Direct Plus .............................................................................................................................................................................
Includes: FedLine Direct traditional package.
56K or 256K Dedicated WAN Connection.
FedACH risk management services.
FedACH FedPayments Reporter Service via secure email.
Fedwire Funds FedPayments Manager import/export.
FedTransaction Analyzer.
FedLine Direct Premier ........................................................................................................................................................................
Includes: FedLine Direct Plus package.
T1 Dedicated WAN Connection.
A La Carte Options (monthly). 83
Electronic Access.
FedLine Exchange subscriber 5-pack 84 ........................................................................................................................................
FedLine subscriber 5-pack .............................................................................................................................................................
Additional FedLine Command certificate 85 ....................................................................................................................................
Additional FedLine Direct certificate 86 ...........................................................................................................................................
Maintenance of additional virtual private network device ...............................................................................................................
FedLine Advantage 800# Usage (per hour) ...................................................................................................................................
Dial-Only VPN surcharge ................................................................................................................................................................
Additional dedicated connections. 87
56K ..........................................................................................................................................................................................
256K .........................................................................................................................................................................................
T1 .............................................................................................................................................................................................
FedLine international setup (one-time fee) .....................................................................................................................................
FedLine Direct contingency solution 88 ...........................................................................................................................................
Check 21 large file delivery ............................................................................................................................................................
FedMail Fax ...................................................................................................................................................................................
Legacy VPN device surcharge 89 ................................................................................................................................................
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E:\FR\FM\06NON1.SGM
06NON1
380.00.
425.00.
500.00.
1,000.00.
4,500.00.
3,600.00.
6,500.00.
10.00.
80.00.
100.00.
100.00.
60.00.
3.00.
1,000.00.
3,500.00.
2,500.00.
3,200.00.
5,000.00.
1,000.00.
various.
70.00.
2,500.00.
Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices
65955
FEDLINE 2015 FEE SCHEDULE—Continued
[Effective January 2, 2015. Bold indicates changes from 2014 prices.]
FedComplete Packages (monthly) 76
mstockstill on DSK4VPTVN1PROD with NOTICES
VPN device modification .................................................................................................................................................................
VPN device modification emergency surcharge .............................................................................................................................
VPN device missed activation appointment ...................................................................................................................................
VPN device expedited hardware surcharge ...................................................................................................................................
VPN device replacement or move ..................................................................................................................................................
Expedited legacy VPN device order/change 90 ..............................................................................................................................
Accounting Information Services.
Cash Management System. 91
Plus—Own report—up to six files with no respondent/sub-account activity (per month) .......................................................
Plus—Own report—up to six files with less than 10 respondent and/or sub-accounts (per month) ......................................
Plus—Own report—up to six files with 10–50 respondent and/or sub-accounts (per month) ...............................................
Plus—Own report—up to six files with 51–100 respondents and/or sub-accounts (per month .............................................
Plus—Own report—up to six files with 101–500 respondents and/or sub-accounts (per month) ..........................................
Plus—Own report—up to six files with >500 respondents and/or sub-accounts (per month) ................................................
End-of-day financial institution reconcilement data file (per month) 92 ..........................................................................................
Statement of account spreadsheet file (per month) 93 ...................................................................................................................
Intra-day download search file (with AMI) (per month) 94 ..............................................................................................................
ACTS Report—<20 sub-accounts ..................................................................................................................................................
ACTS Report—21–40 sub-accounts ..............................................................................................................................................
ACTS Report—41–60 sub-accounts ..............................................................................................................................................
ACTS Report—> 60 sub-accounts .................................................................................................................................................
76 FedComplete packages are all-electronic
service options that bundle payment services with
an access solution for one monthly fee.
77 Per-item surcharges are in addition to the
standard fees listed in the applicable priced
services fee schedules.
78 New FedComplete package customers with a
new FedLine Advantage connection are eligible for
a one-time $1,500 credit applied to their Federal
Reserve service charges. Customers receiving credit
must continue using the FedComplete package for
a minimum of six months or forfeit the $1,500
credit.
79 VPN hardware for FedLine Advantage and
FedLine Command is billed directly by the vendor.
A list of fees can be found at https://
www.frbservices.org/files/servicefees/pdf/access/
2013_vendor_fees.pdf.
80 Check 21 services can be accessed via three
options: FedLine Web, an Internet connection with
Axway Secure Transport Client, or a dedicated
connection using Connect: Direct.
81 Ex-post Daylight Overdraft Reports and the
daily Statement of Account are available via
FedMail.
82 FedLine Direct is available to installed
customer base only. The 56K option is not available
for new orders.
83 These add-on services can be purchased only
with a FedLine Customer Access Service option.
84 There are no priced subscribers contained in
the FedLine Exchange or FedLine packages.
85 Additional FedLine Command Certificates
available for FedLine Command and Direct
packages only.
86 Additional FedLine Direct Certificates available
for FedLine Direct packages only.
87 Network diversity supplemental charge of
$2,000 a month may apply in addition to these fees.
88 FedLine Direct contingency solution is
available only for FedLine Direct Plus & Premier
packages.
89 Effective February 1, 2015. Price will increase
to $5,000 on May 1, 2015 and $7,500 on September
1, 2015.
90 Applicable to VPN devices ordered before May
13, 2013.
91 Cash Management Service options are limited
to Plus and Premier packages.
VerDate Sep<11>2014
19:46 Nov 05, 2014
Jkt 235001
By order of the Board of Governors of the
Federal Reserve System, October 31, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014–26322 Filed 11–5–14; 8:45 am]
BILLING CODE P
FEDERAL RESERVE SYSTEM
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications will also be
available for inspection at the offices of
the Board of Governors. Interested
92 End of Day Reconcilement File option is
available to FedLine Web Plus and FedLine
Advantage Plus packages.
93 Statement of Account Spreadsheet File option
is available to FedLine Web Plus and FedLine
Advantage Plus packages.
94 ACTS Report options are limited to FedLine
Command Plus and FedLine Direct Plus and
Premier packages.
PO 00000
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200.00.
200.00.
175.00.
100.00.
300.00.
500.00.
60.00.
125.00.
250.00.
500.00.
750.00.
1,000.00.
150.00.
150.00.
150.00.
500.00.
1,000.00.
1,500.00.
2,000.00.
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than December 1,
2014.
A. Federal Reserve Bank of San
Francisco (Gerald C. Tsai, Director,
Applications and Enforcement), 101
Market Street, San Francisco, California
94105–1579:
1. Pacific Premier Bancorp, Inc.,
Irvine, California; to acquire voting
shares of Independence Bank, Newport
Beach, California.
Board of Governors of the Federal Reserve
System, November 3, 2014.
Michael J. Lewandowski,
Associate Secretary of the Board.
[FR Doc. 2014–26366 Filed 11–5–14; 8:45 am]
BILLING CODE 6210–01–P
FEDERAL TRADE COMMISSION
[File No. 141 0183]
H.I.G. Bayside Debt & LBO Fund II, L.P.
and Crestview Partners, L.P. ; Analysis
to Aid Public Comment
AGENCY:
E:\FR\FM\06NON1.SGM
Federal Trade Commission.
06NON1
]]>Agencies
[Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)]
[Notices]
[Pages 65937-65955]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26322]
=======================================================================
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
[Docket No. OP-1500]
Federal Reserve Bank Services
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Board of Governors of the Federal Reserve System (Board)
has approved the private sector adjustment factor (PSAF) for 2015 of
$18.0 million and the 2015 fee schedules for Federal Reserve priced
services and electronic access. These actions were taken in accordance
with the requirements of the Monetary Control Act of 1980, which
requires that, over the long run, fees for Federal Reserve priced
services be established on the basis of all direct and indirect costs,
including the PSAF.
DATES: The new fee schedules become effective January 2, 2015.
FOR FURTHER INFORMATION CONTACT: For questions regarding the fee
schedules: Susan V. Foley, Associate Director, (202) 452-3596; Samantha
J. Pelosi, Manager, Retail Payments, (202/530-6292); Linda S. Healey,
Senior Financial Services Analyst, (202) 452-5274, Division of Reserve
Bank Operations and Payment Systems. For questions regarding the PSAF:
Gregory L. Evans, Deputy Associate Director, (202) 452-3945; Brenda L.
Haase, Manager, Financial Accounting, (202) 452-2753; or Manuel Garcia,
Senior Financial Analyst, (202) 452-3480), Division of Reserve Bank
Operations and Payment Systems. For users of Telecommunications Device
for the Deaf (TDD) only, please call (202) 263-4869. Copies of the 2015
fee schedules for the check service are available from the Board, the
Federal Reserve Banks, or the Reserve Banks' financial services Web
site at www.frbservices.org.
SUPPLEMENTARY INFORMATION:
I. Private Sector Adjustment Factor, Priced Services Cost Recovery, and
Overview of 2015 Price Changes
A. Overview--Each year, as required by the Monetary Control Act of
1980, the Reserve Banks set fees for priced services provided to
depository 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
business firm provided the services. The imputed costs and imputed
profit are collectively referred to as the PSAF. From 2004 through
2013, the Reserve Banks recovered 102.0 percent of their total expenses
(including imputed costs) and targeted after-tax profits or return on
equity (ROE) for providing priced services.\1\
---------------------------------------------------------------------------
\1\ The ten-year recovery rate is based on the pro forma income
statement for Federal Reserve priced services published in the
Board's Annual Report. Effective December 31, 2006, the Reserve
Banks implemented Statement of Financial Accounting Standards (SFAS)
No. 158: Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans [Accounting Standards Codification (ASC) 715
Compensation--Retirement Benefits], which resulted in recognizing a
cumulative reduction in equity related to the priced services'
benefit plans. Including this cumulative reduction in equity from
2006 to 2013 results in cost recovery of 95.9 percent for the ten-
year period. This measure of long-run cost recovery is also
published in the Board's Annual Report.
---------------------------------------------------------------------------
Table 1 summarizes 2013 actual, 2014 estimated, and 2015 budgeted
cost-recovery rates for all priced services. Cost recovery is estimated
to be 100.8 percent in 2014 and budgeted to be 101.9 percent in 2015.
Table 1--Aggregate Priced Services Pro Forma Cost and Revenue Performance \a\
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
5 \e\
2 \c\ Total 3 Net income 4 \d\ Recovery rate
YEAR 1 \b\ Revenue expense (ROE) [1-2] Targeted ROE after targeted
ROE [1/(2+4)]
----------------------------------------------------------------------------------------------------------------
2013 (actual)................... 441.3 409.3 32.0 4.2 106.7%
2014 (estimate)................. 429.0 419.9 9.1 5.5 100.8
2015 (budget)................... 414.4 401.0 13.4 5.6 101.9
----------------------------------------------------------------------------------------------------------------
\a\ Calculations in this table and subsequent pro forma cost and revenue tables may be affected by rounding.
\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).
\c\ The calculation of total expense includes operating, imputed, and other expenses. Imputed and other expenses
include taxes, FDIC insurance, 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 FAS 158 [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 FAS 158 [ASC 715]. Future gains or losses, and their effect on cost recovery,
cannot be projected.
[[Page 65938]]
Table 2 provides an overview of cost-recovery performance for the
ten-year period from 2004 to 2013, 2013 actual, 2014 budget, 2014
estimate, and 2015 budget by priced service.
Table 2--Priced Services Cost Recovery
[Percent]
----------------------------------------------------------------------------------------------------------------
2014 Budget 2015 Budget
Priced service 2004-2013 2013 Actual \a\ 2014 Estimate \b\
----------------------------------------------------------------------------------------------------------------
All services.................... 102.0 106.7 102.3 100.8 101.9
Check........................... 102.0 115.4 108.8 114.2 105.4
FedACH.......................... 102.1 101.2 99.2 86.5 100.0
Fedwire Funds and NSS........... 101.5 98.6 98.0 101.3 100.8
Fedwire Securities.............. 102.2 105.0 98.0 100.1 96.5
----------------------------------------------------------------------------------------------------------------
\a\ The 2014 budget figures reflect the final budgets as approved by the Board in December 2013.
\b\ The 2015 budget figures reflect preliminary budget information from the Reserve Bank. The Reserve Banks will
submit final budget data to the Board in November 2014, for Board consideration in December 2014.
1. 2014 Estimated Performance--The Reserve Banks estimate that they
will recover 100.8 percent of the costs of providing priced services in
2014, including total expense and targeted ROE of $5.5 million,
compared with a budgeted recovery rate of 102.3 percent, as shown in
table 2. Overall, the Reserve Banks estimate that they will fully
recover actual and imputed costs and earn net income of $9.1 million,
compared with budgeted net income of $15.0 million. Although the check
service, the Fedwire[supreg] Funds and National Settlement Services,
and the Fedwire Securities Service are expected to achieve full cost
recovery, the FedACH[supreg] Service is expected to recover 86.5
percent of its costs because of a $31.6 million charge related to its
investment associated with a multiyear technology initiative to
modernize its processing platform.\2\ Greater-than-expected check
volume processed by the Reserve Banks has been the single most
significant factor influencing priced services cost recovery.
---------------------------------------------------------------------------
\2\ The Reserve Banks have been engaged in a multiyear
technology initiative to modernize the FedACH processing platform by
migrating the service from a mainframe system to a distributed
computing environment. In late 2013, the Reserve Banks conducted an
assessment focused on the viability and cost-effectiveness of the
program. As a result, the Reserve Banks in 2014 suspended the
program and began to investigate the use of other technology
solutions.
---------------------------------------------------------------------------
2. 2015 Private Sector Adjustment Factor--The 2015 PSAF for Reserve
Bank priced services is $18.0 million. This amount represents a
decrease of $5.4 million from the 2014 PSAF of $23.4 million. This
decrease is primarily the result of a reduction in the assets to be
financed on the imputed priced-services balance sheet and an associated
decline in the cost of debt and equity.
3. 2015 Projected Performance--The Reserve Banks project a priced
services cost-recovery rate of 101.9 percent in 2015, with net income
of $13.4 million, compared to a targeted ROE of $5.6 million. The
Reserve Banks project that the check service, the FedACH Service, and
the Fedwire Funds and National Settlement Service will fully recover
their costs; however, the Reserve Banks project that the Fedwire
Securities Service will not achieve full-cost recovery because of
investment costs associated with multiyear technology initiatives to
modernize its processing platform. These investments are expected to
enhance efficiency, the overall quality of operations, and the Reserve
Banks' ability to offer additional services to depository institutions.
The primary risks to the Reserve Banks' ability to achieve their
targeted cost recovery rates are unanticipated volume and revenue
reductions and the potential for cost overruns with the technology
modernization initiatives. In light of these risks, the Reserve Banks
will continue to refine their business and operational strategies to
manage aggressively operating costs, to increase product revenue, and
to leverage efficiencies gained from technology initiatives.
4. 2015 Pricing--The following summarizes the Reserve Banks'
changes in fee schedules for priced services in 2015:
Check
In October, the Reserve Banks announced a 12:00 noon ET
deadline (but not the associated fee schedules) for the
FedForward[supreg] product line, specifically, Mixed, Select Mixed, and
Premium Mixed D products, which will provide the Reserve Banks an
opportunity to present forward items to paying banks one day
earlier.3 4 5
---------------------------------------------------------------------------
\3\ All times are stated in the Eastern Time Zone (ET).
\4\ Depository institutions may deposit image cash letters using
nine deposit options within the FedForward product line; the options
vary in price structure and funds availability. A current list of
FedForward deposit options can be found at https://frbservices.org/servicefees/check_services_2014.html.
\5\ The Reserve Banks announced the new deadline in October,
effective January 2, 2015, to provide both collecting banks and
paying banks sufficient time to modify their processes to deposit
and receive items at 12:00 noon and 2:00 p.m., respectively. The
announcement can be found at https://www.frbservices.org/files/communications/pdf/check/100314_updated_new_fedforward_deposit_deadline.pdf.
---------------------------------------------------------------------------
In conjunction with the noon deadline, the Reserve Banks
will reduce the per-item fees for tiers 1, 2, 3, and 4 within the
current Mixed deposit option. For the Select Mixed option, the Reserve
Banks will increase the per-item fees for non-eligible items from $0.10
to $0.35 and to implement a $25 image cash letter (ICL) surcharge. For
the Premium Mixed D option, the Reserve Banks will charge per-item fees
$0.002 higher than the per-item fees at the current 1:00 a.m. deadline
(with the exception of the substitute check fee, which will be $0.20
higher) and a $25 ICL surcharge.
The Reserve Banks will introduce two new deposit options
to the FedForward Premium Mixed ICL products and to expand the list of
eligible endpoints to the Select Mixed ICL products.
The Reserve Banks will increase the FedForward Deferred
Mixed ICL product per-item fees at the 5:00 a.m. and 10:00 a.m.
deadlines by $0.002 and $0.004, respectively. The Reserve Banks will
increase the FedForward Deferred Fine Sort ICL product per-item fees at
the 5:00 a.m. and 10:00 a.m. deadlines by $0.001 and $0.002,
respectively. The Reserve Banks hope to encourage depositors to shift
volume from the deferred availability product to one of the immediate-
availability options at 12:00 noon.
FedACH
The Reserve Banks will modify the FedACH Minimum
Origination Fee calculation to include fees associated
[[Page 65939]]
with SameDay and FedGlobal[supreg] origination transactions in the
computation.
The Reserve Banks will reduce the volume tier thresholds
for the FedACH Risk Management Services from 500,000 to 100,000 items
monitored per month.\6\
---------------------------------------------------------------------------
\6\ The FedACH Risk Management Services includes FedACH Risk
Origination Monitoring Service, FedACH Risk RDFI Alert Service, and
FedACH Risk Returns Reporting Service. For more information, refer
to https://frbservices.org/files/serviceofferings/pdf/FedACHRiskServices.pdf.
---------------------------------------------------------------------------
Fedwire Funds and National Settlement
The Reserve Banks will reduce the per-item fee on all
transfers that exceed $10 million (high-value transfer surcharge) from
$0.15 to $0.14. The Reserve Banks will increase the monthly fee for the
usage of the FedPayments[supreg] Manager import/export tool from $45 to
$50. In addition, the Reserve Banks will increase the surcharge for
offline transactions from $45 to $50.\7\
---------------------------------------------------------------------------
\7\ The monthly fee is charged to any Fedwire Funds participant
that originates a Fedwire Funds transfer message via the FedPayments
Manager (FPM) Funds tool and has the import/export processing option
setting active at any point during the month.
---------------------------------------------------------------------------
The Reserve Banks will increase the Tier 1 per-item pre-
incentive fee from $0.69 to $0.73 per transaction, increase the Tier 3
per-item pre-incentive fee from $0.14 to $0.15, and leave Tier 2 per-
item pre-incentive fees unchanged.\8\
---------------------------------------------------------------------------
\8\ The per-item pre-incentive fee is the fee that the Reserve
Banks charge for transfers that do not qualify for incentive
discounts. The Tier 1 per-item pre-incentive fee applies to the
first 14,000 transfers, the Tier 2 per-item pre-incentive fee
applies to the next 76,000 transfers, and the Tier 3 per-item pre-
incentive fee applies to any additional transfers. The Reserve Banks
apply an 80 percent incentive discount to every transfer over 60
percent of a customer's historic benchmark volume.
---------------------------------------------------------------------------
Fedwire Securities
The Reserve Banks will increase the online transfer fee
from $0.54 to $0.65.
The Reserve Banks will increase the monthly account
maintenance fee from $40 to $48 per account, and increase the monthly
issue maintenance fee from $0.54 to $0.65 per issue.
The Reserve Banks will increase the Joint Custody
origination surcharge from $40 to $44.
FedLine[supreg] Access Solutions
The Reserve Banks will increase the fees on legacy
services, such as an additional $10 per month for FedMail[supreg] Fax
and $300 per month for FedLine Direct[supreg] (56K). The Reserve Banks
also will raise the monthly fee for the 56K additional dedicated
electronic access connection by $400 and to introduce a legacy device
VPN surcharge of $2,500 per month.\9\
---------------------------------------------------------------------------
\9\ Effective February 1, 2015. Price will increase to $5,000 on
May 1, 2015 and $7,500 on September 1, 2015.
---------------------------------------------------------------------------
The Reserve Banks will add a new package called FedLine
Advantage[supreg] Premier to the FedLine packaged solutions that will
be priced at $500 per month with FedTransaction Analyzer and a
secondary VPN device.\10\
---------------------------------------------------------------------------
\10\ All customers, regardless of their chosen electronic access
channel, are responsible for the purchase and installation of each
VPN device.
---------------------------------------------------------------------------
The Reserve Banks will introduce two new tiers to the
FedComplete[supreg] package solutions called FedComplete 100 Premier,
priced at $850 per month, and FedComplete 200 Premier, priced at $1,375
per month, with FedLine Advantage Premier included.
The Reserve Banks will change the name of the FedMail
Email package to FedLine Exchange; there is no change to the published
fee.
5. 2015 Price Index--Figure 1 compares indexes of fees for the
Reserve Banks' priced services with the GDP price index starting in
2005, which is the first full year the Reserve Banks offered Check 21
services. The price index for Reserve Bank priced services is projected
to increase approximately 1 percent in 2015 from the 2014 level. The
price index for Check 21 services is projected to decrease
approximately 3 percent. The price index for the FedACH Service is
projected to decrease nearly 1 percent. The price index for the Fedwire
Funds and National Settlement Services is projected to increase
approximately 5 percent. The price index for the Fedwire Securities
Services is projected to increase approximately 15 percent. For the
period 2005 to 2014, the price index for total priced services is
expected to decrease 32 percent. In comparison, for the period 2005 to
2013, the GDP price index increased 16 percent.
[[Page 65940]]
[GRAPHIC] [TIFF OMITTED] TN06NO14.022
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.
---------------------------------------------------------------------------
\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 the entirety of the U.S. market.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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 pre-tax 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
[[Page 65941]]
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.
---------------------------------------------------------------------------
\13\ The FDIC rule, which was adopted as final on April 8, 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. Since 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
https://www.fdic.gov/news/board/2014/2014-04-08_notice_dis_c_fr.pdf.
---------------------------------------------------------------------------
Application of the Payment System Risk (PSR) Policy to the Fedwire
Services. The Board recently approved revisions to the PSR policy to
reflect the new international standards for financial market
infrastructures (FMIs) developed by the Committee on Payment and
Settlement Systems and the Technical Committee of the International
Organization of Securities Commissions in the Principles for Financial
Market Infrastructures. The revised policy retains the expectation that
the Fedwire Services will 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 Services do 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. In order to
foster competition with private-sector FMIs, however, the Reserve
Banks' priced services will hold six months of the Fedwire Funds
Service's current operating expenses as liquid net financial assets and
equity on the pro forma balance sheet.\14\ Current operating expenses
are defined as normal business operating expenses on the income
statement less depreciation, amortization, taxes, and interest on debt.
The Fedwire Funds Service's six months of operating expenses are
computed based on its 2015 budget at $47.7 million.\15\ The revised PSR
policy requirement is met in 2015 by the investments and equity imputed
to the priced services balance sheet; therefore, there is no need to
impute additional assets or equity.
---------------------------------------------------------------------------
\14\ This requirement, which becomes effective on December 31,
2015, does not apply to the Fedwire Securities Service. There are no
competitors to the Fedwire Securities Service that will face such a
requirement, and imposing such a requirement when pricing securities
services could artificially increase the cost of these services.
\15\ 2015 budget pro forma as of October 8, 2014 based on
initial transmission data.
---------------------------------------------------------------------------
Effective tax rate. As with 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 5 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 A2/P2) and the annual Merrill Lynch Corporate & High
Yield Index rate, respectively. 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 decrease in the 2015 PSAF is primarily due to lower financing
costs as a result of fewer priced services assets to be financed than
in 2014. Debt and equity financing rates declined and less debt and
equity was imputed to fund priced services assets.
Projected 2015 Federal Reserve priced-services assets, reflected in
table 3, have decreased $107.3 million from 2014, which is primarily
the result of a decline in the deferred tax asset. As shown in table 3,
the amount of long-term debt for the 2015 PSAF is $81.9 million, a
decline of $37.4 million from $119.3 million in 2014. Imputed equity
for 2015 is $71.9 million, a decrease of approximately $10.4 million
from the equity imputed for 2014. In accordance with FAS 158 [ASC 715],
this amount includes an accumulated other comprehensive loss of $523.7
million.
Table 4 reflects the portion of short- and long-term assets that
must be financed with actual or imputed liabilities and equity. Debt
and equity imputed to fund the 2015 priced services assets within the
observed market leverage ratio produced an equity level that did not
meet the FDIC minimum equity requirements. As a result, additional
equity was imputed to meet the FDIC requirements and imputed long-term
debt was reduced. The ratio of capital to risk-weighted assets meets
the required 10 percent of risk-weighted assets and equity exceeds 5
percent of total assets (table 6). In 2014, long-term debt and equity
was imputed to meet the asset funding requirements and reflects the
leverage ratio observed in the market; no additional equity was
required (table 5).
Table 5 shows the derivation of the 2015 and 2014 PSAF. Financing
costs for 2015 are $4.3 million lower than in 2014. In addition to the
decline in the levels of debt and equity mentioned above, the long-term
debt and cost of equity declined 9 basis points and 5 basis points,
respectively. The reduced equity balance and the lower cost of equity
result in a pre-tax ROE that is $1.4 million lower than the 2014 pre-
tax ROE. Imputed sales taxes declined to $3.3 million in 2015 from $3.5
million in 2014. The priced services portion of the Board's expenses
decreased $0.8 million to $3.3 million in 2015 from $4.1 million in
2014. The effective income tax rate used in 2015 decreased to 22.4
percent from 37.2 percent in 2014.
[[Page 65942]]
Table 3--Comparison of Pro Forma Balance Sheets for Budgeted Federal Reserve Priced Services
[Millions of dollars--projected average for year]
----------------------------------------------------------------------------------------------------------------
2015 2014 Change
----------------------------------------------------------------------------------------------------------------
Short-term assets:
Receivables................................................. 34.5 35.8 (1.3)
Materials and supplies...................................... 0.6 0.7 (0.1)
Prepaid expenses............................................ 11.0 11.1 (0.1)
Items in process of collection \16\............................. 151.0 200.0 (49.0)
-----------------------------------------------
Total short-term assets................................. 197.2 247.7 (50.5)
Imputed investments \17\........................................ $600.0 $600.0 $0.0
Long-term assets:
Premises \18\............................................... $116.2 $123.6 $(7.4)
Furniture and equipment..................................... 39.9 37.6 2.3
Leasehold improvements and long-term prepayments............ 91.5 103.3 (11.7)
Net pension asset........................................... 79.6 39.3 40.2
Deferred tax asset.......................................... 222.8 303.1 (80.2)
-----------------------------------------------
Total long-term assets.................................. 550.0 606.8 (56.8)
-----------------------------------------------
Total assets........................................ $1,347.2 $1,454.5 $(107.3)
===============================================
Short-term liabilities:
Deferred credit items....................................... $751.0 $800.0 $(49.0)
Short-term debt............................................. 18.5 22.2 (3.6)
Short-term payables......................................... 27.6 25.5 2.1
-----------------------------------------------
Total short-term liabilities............................ 797.2 847.7 (50.5)
Long-term liabilities:
Long-term debt.............................................. $81.9 $119.3 $(37.4)
Postemployment/postretirement benefits and net pension 396.3 405.2 (8.9)
liabilities \19\...........................................
-----------------------------------------------
Total liabilities....................................... $1,275.3 $1,372.2 $(96.9)
Equity \17\ \20\................................................ $71.9 $82.3 $(10.4)
===============================================
Total liabilities and equity........................ $1,347.2 $1,454.5 $(107.3)
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\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 prior to
providing credit to the depositing bank. Float is directly estimated
at the service level.
\17\ Consistent with the Federal Reserve Policy on Payment
System Risk, the Reserve Banks' priced services will hold 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 operating expenses
is $47.7 million. As this requirement takes effect on the last day
of the year, the minimum liquid financial assets and equity
requirement is $0.1 million ($47.7 million/365). The investments and
equity imputed to the priced services balance sheet of $600 million
and $71.9 million, respectively, are greater than the liquid
financial assets and equity required; therefore no additional
imputation is necessary.
\18\ Includes the allocation of Board of Governors assets to
priced services of $0.7 and $0.6 million for 2015 and 2014,
respectively.
\19\ Includes the allocation of Board of Governors liabilities
to priced services of $0.6 million and $0.6 million for 2015 and
2014, respectively.
\20\ Includes an accumulated other comprehensive loss of $523.7
million for 2015 and $497.5 million for 2014, which reflects the
ongoing amortization of the accumulated loss in accordance with FAS
158 [ASC 715]. Future gains or losses, and their effects on the pro
forma balance sheet, cannot be projected. See table 5 for
calculation of required imputed equity amount.
Table 4--Imputed Funding for Priced-Services Assets
[Millions of dollars]
------------------------------------------------------------------------
2015 2014
------------------------------------------------------------------------
A. Short-term asset financing
Short-term assets to be financed....
Receivables..................... $34.5 $35.8
Materials and supplies.......... 0.6 0.7
Prepaid expenses................ 11.0 11.1
-------------------------------
Total short-term assets to be $46.2 $47.7
financed...........................
Short-term payables............. 27.6 25.5
-------------------------------
Net short-term assets to be $18.5 $22.2
financed.........................
===============================
Imputed short-term debt $18.5 $22.2
financing \21\.............
===============================
B. Long-term asset financing
Long-term assets to be financed.....
Premises........................ $116.2 $123.6
[[Page 65943]]
Furniture and equipment......... 39.9 37.6
Leasehold improvements and long- 91.5 103.3
term prepayments...............
Net pension asset............... 79.6 39.3
Deferred tax asset.............. 222.8 303.1
-------------------------------
Total long-term assets to be $550.0 $606.8
financed...........................
Postemployment/postretirement 396.3 405.2
benefits and net pension
liabilities....................
-------------------------------
Net long-term assets to be $153.8 $201.6
financed.......................
===============================
Imputed long-term debt \21\............. $81.9 $119.3
Imputed equity \21\..................... 71.9 82.3
-------------------------------
Total long-term financing... $153.8 $201.6
------------------------------------------------------------------------
---------------------------------------------------------------------------
\21\ See table 5 for calculation.
Table 5--Derivation of the 2015 and 2014 PSAF
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
2015 2014
-----------------------------------------------------------------
Debt Equity Debt Equity
----------------------------------------------------------------------------------------------------------------
A. Imputed long-term debt and equity:
Net long-term assets to finance........... $153.8 ......... $153.8 $201.6 ......... $201.6
Capital structure observed in market...... 58.2% ......... 41.8% 59.2% ......... 40.8%
-----------------------------------------------------------------
Pre-adjusted long-term debt and equity.... $89.5 ......... $64.3 $119.3 ......... $82.3
Equity adjustments offset by: \22\
Imputed long-term debt................ (7.6) ......... 7.6 -- ......... --
Imputed investments................... -- ......... -- -- ......... --
-----------------------------------------------------------------
$81.9 ......... $71.9 $119.3 ......... $82.3
=================================================================
B. Cost of capital:
Elements of capital costs.................
Short-term debt \23\.................. $18.5 x 0.2% = $0.0 $22.2 x 0.2% = $0.0
Long-term debt \23\................... 81.9 x 5.0% = 4.1 119.3 x 5.9% = 7.0
Equity \24\........................... 71.9 x 10.1% = 7.3 82.3 x 10.6% = 8.7
----------- ----------
......... ......... $11.4 ......... ......... $15.8
C. Other required PSAF costs:
Sales taxes............................... ......... $3.3 ......... ......... $3.5
Board of Governors expenses............... ......... 3.3 ......... ......... 4.1
-----------------------------------------------------------------
......... ......... 6.6 ......... ......... 7.6
-----------------------------------------------------------------
......... ......... $18.0 ......... ......... $23.4
=================================================================
D. Total PSAF:
As a percent of assets.................... ......... ......... 1.3% ......... ......... 1.6%
As a percent of expenses.................. ......... ......... 4.5% ......... ......... 5.6%
E. Tax rates.................................. ......... ......... 22.4% ......... ......... 37.2%
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\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 2014, the amount of imputed equity was based on the
minimum equity requirements for risk-weighted assets, or 10%.
\23\ Imputed short-term debt and long-term debt are computed at
table 4.
\24\ The 2015 ROE is equal to a risk-free rate plus a risk
premium (beta * market risk premium). The 2015 after-tax CAPM ROE is
calculated as 0.03% + (1.0 * 7.83%) = 7.86%. Using a tax rate of
22.4%, the after-tax ROE is converted into a pretax ROE, which
results in a pretax ROE of (7.86%/(1 - 22.4%)) = 10.1%. Calculations
may be affected by rounding.
[[Page 65944]]
Table 6--Computation of 2015 Capital Adequacy for Federal Reserve Priced Services
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Weighted
Assets Risk weight assets
----------------------------------------------------------------------------------------------------------------
Imputed investments:
3-month Treasury bills \25\................................. $-- .............. $--
Federal funds \26\.......................................... 600.0 0.2 120.0
---------------- ---------------
Total imputed investments............................... 600.0
Receivables..................................................... $34.5 0.2 $6.9
Materials and supplies.......................................... 0.6 1.0 0.6
Prepaid expenses................................................ 11.0 1.0 11.0
Items in process of collection.................................. 151.0 0.2 30.2
Premises........................................................ 116.2 1.0 116.2
Furniture and equipment......................................... 39.9 1.0 39.9
Leasehold improvements and long-term prepayments................ 91.5 1.0 91.5
Pension asset................................................... 79.6 1.0 79.6
Deferred tax asset.............................................. 222.8 1.0 222.8
---------------- ---------------
Total............................................... $1,347.2 .............. $718.8
================ ===============
Imputed equity.................................................. .............. .............. $71.9
Capital to risk-weighted assets................................. 10.0%
Capital to total assets......................................... 5.3%
----------------------------------------------------------------------------------------------------------------
C. Check Service--Table 7 shows the 2013 actual, 2014 estimated,
and 2015 budgeted cost-recovery performance for the commercial check
service.
---------------------------------------------------------------------------
\25\ 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 https://www.federalreserve.gov/releases/h15/data.htm.
\26\ The investments are imputed based on the amounts arising
from the collection of items prior to providing credit according to
established availability schedules.
Table 7--Check Service Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Net income after targeted
Year Revenue Total expense (ROE) [1-2] Targeted ROE ROE [1/(2+4)]
%
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2013 (actual)................... 198.9 170.7 28.2 1.7 115.4
2014 (estimate)................. 172.5 149.1 23.4 1.9 114.2
2015 (budget)................... 151.8 142.0 9.8 2.0 105.4
----------------------------------------------------------------------------------------------------------------
1. 2014 Estimate--The Reserve Banks estimate that the check service
will recover 114.2 percent of total expenses and targeted ROE, compared
with a 2014 budgeted recovery rate of 108.8 percent. Greater-than-
expected check volumes processed by the Reserve Banks and lower-than-
expected costs have influenced significantly the check services cost
recovery.27 28
---------------------------------------------------------------------------
\27\ The greater-than-expected check volume is attributed to
continued enhancements of two strategic FedForward product
offerings, specifically select mixed and premium mixed.
\28\ Operating costs are expected to be $2.1 million lower than
the original 2014 budget due to operational efficiencies in check
processing as well as lower than budgeted information technology
costs. Pension costs are also projected to be $3.5 million under the
original budget.
---------------------------------------------------------------------------
The decline in Reserve Bank check volume, which is attributable to
the decline in the number of checks written generally, was not as great
as anticipated. Through September, total forward check volume is 4.5
percent lower and total return check volume is 12.4 percent lower than
for the same period last year. For full-year 2014, the Reserve Banks
estimate that their total forward check volume will decline 5.1 percent
(compared to a budgeted decline of nearly 9 percent) and their total
return check volume will decline 13.0 percent (compared to a budgeted
decline of about 14 percent) from 2013 levels.\29\
---------------------------------------------------------------------------
\29\ Total Reserve Bank forward check volumes are expected to
drop from roughly 6.0 billion in 2013 to 5.7 billion in 2014. Total
Reserve Bank return check volumes are expected to drop from roughly
42.1 million in 2013 to 36.6 million in 2014.
---------------------------------------------------------------------------
2. 2015 Pricing--The Reserve Banks project that the check service
will recover 105.4 percent of total expenses and targeted ROE in 2015.
The Reserve Banks project revenue to be $151.8 million, a decline of 12
percent from 2014. This decline is driven largely by projected
reductions in both forward check and return check volume. The Reserve
Banks estimate that total Reserve Bank forward check volumes will
decline nearly 7 percent to 5.3 billion and return check volumes will
decline approximately 14 percent to 31.3 million in 2015. Total
expenses for the check service are projected to be $142.0 million, a
decline of nearly 5 percent from 2014. The reduction in check costs is
driven primarily by the cost savings associated with the implementation
of a more efficient
[[Page 65945]]
check processing platform and the full decommissioning of the legacy
platform.\30\
---------------------------------------------------------------------------
\30\ The Reserve Banks completed a multi-year check platform
modernization initiative in October 2012.
---------------------------------------------------------------------------
The Reserve Banks announced in October a 12:00 noon deadline (but
not the associated fees) for three deposit options within the current
FedForward product line, specifically, Mixed, Premium Mixed D, and
Select Mixed products, to provide an opportunity for the bank of first
deposit to present forward items to paying banks one day
earlier.31 32 For the Mixed deposit option, the Reserve
Banks will reduce the per-item fees for tiers 1, 2, 3, and 4 from the
current 10:00 a.m. deposition option, as seen in table 8.\33\ For the
Select Mixed option, the Reserve Banks will increase the per-item fees
for non-eligible items from $0.10 to $0.35 and to implement a $25 ICL
surcharge.\34\ For the Premium Mixed D option, the Reserve Banks will
charge per-item fees $0.002 higher than the per-item fees at the
current 1:00 a.m. deadline (with the exception of the substitute check
fee, which will be $0.20 higher) and a $25 ICL surcharge.\35\
---------------------------------------------------------------------------
\31\ Depository institutions deposit image cash letters using
nine deposit options within the FedForward product line, which vary
in price structure and funds availability. A current list of
FedForward deposit options can be found at https://frbservices.org/servicefees/check_services_2014.html.
\32\ The Reserve Banks announced the deadline in October,
effective January 2, 2015, to provide both collecting banks and
paying banks enough time to modify their processes to deposit and
receive items at 12:00 noon and 2:00 p.m., respectively. The
announcement can be found at https://www.frbservices.org/files/communications/pdf/check/100314_updated_new_fedforward_deposit_deadline.pdf.
\33\ The Mixed product option allows customers to send forward
collection items in a mixed cash letter at various deadlines for a
lower cash letter fee and higher electronic per-item fee.
\34\ The Select Mixed product option allows customers to send
forward collection items drawn on specific endpoints in a separate
cash letter, which combines a high fixed fee with a lower per-item
variable fee. All eligible items in the cash letter receive
immediate availability and qualify for the special pricing while
ineligible items receive deferred availability of the next business
day and pay a higher per-item fee. A current list of Select Mixed
endpoints can be found at https://www.frbservices.org/servicefees/check21_endpoint_listing.html.
\35\ The Premium Mixed product option allow customers to send
forward collection items within a specific number of mixed cash
letters for a daily fixed fee and a lower per-item fee. A surcharge,
or overage fee, is charged for each cash letter deposited over the
published threshold. Premium Mixed depositors are not eligible to
use Fine Sort and Deferred Fine Sort products.
Table 8
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
FedForward Mixed Image Cash Letter \a\ \b\
----------------------------------------------------------------------------------------------------------------
Deadline.................................................... 9:00 p.m. 1:00 a.m. 5:00 a.m. 12:00 p.m.
----------------------------------------------------------------------------------------------------------------
Cash letter fee............................................. $3.50 $4.50 $6.50 $6.50
Tier 1.................................................. 0.0080 0.0230 0.0500 0.0700
Tier 2.................................................. 0.0200 0.0330 0.0800 0.1000
Tier 3.................................................. 0.0300 0.0500 0.2000 0.2200
Tier 4.................................................. 0.0400 0.0600 0.2500 0.2700
Substitute check \e\.................................... 0.1500 0.1500 0.3000 0.3500
----------------------------------------------------------------------------------------------------------------
FedForward Premium Mixed D Image Cash Letter \a\ \b\
----------------------------------------------------------------------------------------------------------------
Deadline.................................................... 1:00 a.m.
12:00 p.m.
----------------------------------------------------------------------------------------------------------------
Cash letter fee \d\......................................... $500.00
$500.00
Cash letter surcharge \c\................................... ........................
..................
25.00
Tier 1.................................................. 0.0040
0.0060
Tier 2.................................................. 0.0170
0.0190
Tier 3.................................................. 0.0280
0.0300
Tier 4.................................................. 0.0390
0.0410
Substitute check \e\.................................... 0.1500
0.3500
----------------------------------------------------------------------------------------------------------------
FedForward Select Mixed Image Cash Letter \a\ \b\
----------------------------------------------------------------------------------------------------------------
Deadline.................................................... 5:00 a.m.
12:00 p.m.
---------------------------------------------------
Level 1 Level 2 Level 1 Level 2
----------------------------------------------------------------------------------------------------------------
Daily fixed fee............................................. $2,200.00 $900.00 $2,200.00 $900.00
Cash letter surcharge \c\................................... ........... ........... 25.00 25.00
Tier 1...................................................... 0.0020 0.0020 0.0020 0.0020
Tier 2...................................................... 0.0040 0.0060 0.0040 0.0060
Tier 3...................................................... 0.0060 0.0080 0.0060 0.0080
Non-eligible endpoints...................................... 0.1000 0.1000 0.3500 0.3500
----------------------------------------------------------------------------------------------------------------
\a\ All deadlines are Monday through Friday.
\b\ A current list of FedForward endpoint tier listings can be found at https://www.frbservices.org/servicefees/
check21--Fendpoint--listing.html.
\c\ The surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the
daily fixed fee.
\d\ Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee
for each additional cash letter. The maximum number of cash letters per day for the Premium Mixed D product is
35.
\e\ The Reserve Bank's Check 21 service fees include separate and substantially different fees for the delivery
of checks to electronic endpoints versus paper substitute check endpoints.
The Reserve Banks will introduce two new deposit options to the
FedForward Premium Mixed ICL products, Premium Mixed E and F, as seen
in table 9.
[[Page 65946]]
Table 9--FedForward Premium Mixed Image Cash Letter \a\ \b\
----------------------------------------------------------------------------------------------------------------
Premium Mixed E \c\ Premium Mixed F \c\
Deadline ---------------------------------------------------------------
5:00 a.m. 12:00 p.m. 5:00 a.m. 12:00 p.m.
----------------------------------------------------------------------------------------------------------------
Daily fixed fee \d\............................. $325.00 $325.00 $650.00 $650.00
Cash letter surcharge \e\....................... .............. 25.00 .............. 25.00
Tier 1.......................................... 0.0040 0.0060 0.0040 0.0060
Tier 2.......................................... 0.0170 0.0190 0.0170 0.0190
Tier 3.......................................... 0.0280 0.0300 0.0280 0.0300
Tier 4.......................................... 0.0390 0.0410 0.0390 0.0410
Substitute Checks \f\........................... 0.3000 0.3500 0.3000 0.3500
----------------------------------------------------------------------------------------------------------------
\a\ All deadlines are Monday through Friday.
\b\ A current list of FedForward endpoint tier listings can be found at https://www.frbservices.org/servicefees/
check21--Fendpoint--listing.html.
\c\ Premium Mixed E and Premium Mixed F products are not eligible to use Fine Sort or Deferred Fine Sort
products.
\d\ Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee
for each additional cash letter. The maximum number of cash letters per day for Premium Mixed E and Premium
Mixed F is 30 and 60, respectively.
\e\ The surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the
daily fixed fee.
\f\ The Reserve Bank's Check 21 service fees include separate and substantially different fees for the delivery
of checks to electronic endpoints versus paper substitute check endpoints.
The Reserve Banks will increase the FedForward Deferred Mixed ICL
product per-item fees at the 5:00 a.m. and 10:00 a.m. deadlines by
$0.002 and $0.004, respectively. They also will increase the FedForward
Deferred Fine Sort ICL product per-item fees at the 5:00 a.m. and 10:00
a.m. deadlines by $0.001 and $0.002, respectively. The Reserve Banks
hope to encourage depositors to shift volume from the deferred-
availability product to one of the immediate-availability options at
12:00 noon. The Reserve Banks estimate that the price changes will
result in an approximate 0.5 percent average price decrease for check
customers.
Risks to the Reserve Banks' ability to achieve budgeted 2015 cost
recovery for the check service include greater-than-expected check
volume losses due to reductions in check writing overall and
competition from correspondent banks, aggregators, and direct
exchanges, which would result in lower-than-anticipated revenue, and
higher-than-expected support and overhead costs.
D. FedACH Service--Table 10 shows the 2013 actual, 2014 estimate,
and 2015 budgeted cost-recovery performance for the commercial FedACH
service.
Table 10--FedACH Service Pro Forma Cost and Revenue Performance
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Year Revenue Total expense Net income Targeted roe after targeted
(Roe) [1-2] Roe [1/(2+4)]
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2013 (actual)................... 118.9 116.3 2.6 1.2 101.2%
2014 (estimate)................. 123.3 140.9 -17.6 1.7 86.5
2015 (budget)................... 124.4 122.6 1.8 1.7 100.0
----------------------------------------------------------------------------------------------------------------
1. 2014 Estimate--The Reserve Banks estimate that the FedACH
service will recover 86.5 percent of total expenses and targeted ROE,
compared with a 2014 budgeted recovery rate of 99.2 percent. The
shortfall in the FedACH Service is due to a $31.6 million charge
related to its investment associated with a multiyear technology
initiative to modernize its processing platform.\36\ The Reserve Banks'
long-term cost recovery average, from 2003 to 2014, is 102.1 percent.
Through September, FedACH commercial origination and receipt volume was
4.1 percent higher than it was during the same period last year. The
Reserve Banks believe that the volume growth will continue at the same
pace for the full year 2014, higher than the 3.0 budgeted volume
increase.
---------------------------------------------------------------------------
\36\ The Reserve Banks have been engaged in a multiyear
technology initiative to modernize the FedACH processing platform by
migrating the service from a mainframe system to a distributed
computing environment. In late 2013, the Reserve Banks conducted an
assessment focused on the viability and cost-effectiveness of the
program. As a result, the Reserve Banks in 2014 suspended the
program and began to investigate the use of other technology
solutions.
---------------------------------------------------------------------------
2. 2015 Pricing--The Reserve Banks expect the FedACH service to
recover 100.0 percent of total expenses and targeted ROE in 2015.
FedACH commercial origination and receipt volume is projected to grow
3.5 percent contributing to an increase of $1.1 million in total
revenue from the 2014 estimate. Total expenses are budgeted to decrease
$900 thousand from 2014 budgeted expenses of $125.3 million, primarily
because of efficiencies gained from synergies between the check and ACH
operations.
The Reserve Banks will modify the FedACH Minimum Origination Fee
calculation to include fees associated with SameDay and FedGlobal
origination transactions in the computation.\37\ The Reserve Banks will
reduce the tier volume thresholds for the FedACH Risk Management
Services from 500,000 to 100,000 items reviewed per month.
---------------------------------------------------------------------------
\37\ Each Originating Depository Financial Institution (ODFI) is
charged a minimum of $35 per month in forward value and non-value
item origination fees. The fees associated with domestic FedACH,
SameDay, and FedGlobal originations are collectively subject to the
minimum fee.
---------------------------------------------------------------------------
The primary risks to the Reserve Banks' ability to achieve budgeted
2015 cost recovery for the FedACH service are cost overruns associated
with unanticipated problems related to infrastructure currency efforts
and higher-than-expected support and overhead costs. Other risks
include lower-than-expected volume and associated revenue due to
unanticipated
[[Page 65947]]
mergers and acquisitions and loss of market share due to direct
exchanges and a shift of volume to the private-sector operator.
E. Fedwire Funds and National Settlement Services--Table 11 shows
the 2013 actual, 2014 estimate, and 2015 budgeted cost-recovery
performance for the Fedwire Funds and National Settlement Services.
Table 11--Fedwire Funds and National Settlement Services Pro Forma Cost and Revenue Performance
[dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Net income after targeted
Year Revenue Total expense (ROE) [1-2] Targeted ROE ROE [1/(2+4)]
%
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2013 (actual)................... 96.7 97.1 -0.3 1.0 98.6
2014 (estimate)................. 109.5 106.6 2.9 1.5 101.3
2015 (budget)................... 112.2 109.8 2.4 1.5 100.8
----------------------------------------------------------------------------------------------------------------
1. 2014 Estimate -- The Reserve Banks estimate that the Fedwire
Funds and National Settlement Services will recover 101.3 percent of
total expenses and targeted ROE, compared with a 2014 budgeted recovery
rate of 98.0 percent. The higher-than-budgeted cost recovery is
primarily due to lower-than-expected operating costs, which offset
weaker-than-anticipated volumes and associated revenue.
Through September, Fedwire Funds Service online volume was 0.6
percent lower than for the same period last year. For full-year 2014,
the Reserve Banks estimate Fedwire Funds Service online volume to
decline 1.1 percent from 2013 levels, compared to the 3.8 percent
volume increase that had been budgeted. Through September, National
Settlement Service settlement file volume was unchanged from the same
period last year, while settlement entry volume was 5.6 percent lower.
For the full year, the Reserve Banks estimate that settlement file
volume will decrease 2.8 percent (same as budgeted) and settlement
entry volume will decrease 7.3 percent from 2013 levels (compared to a
budgeted 1.8 percent increase).
2. 2015 Pricing--The Reserve Banks expect the Fedwire Funds Service
to recover 100.8 percent of total expenses and targeted ROE. Revenue is
projected to be $112.2 million, an increase of 2.5 percent from 2014.
The Reserve Banks project total expenses to be $3.2 million higher than
the 2014 estimate.
The Reserve Banks will adjust the incentive pricing fees for the
Fedwire Funds Service by increasing the Tier 1 per item pre-incentive
fee (the fee before volume discounts are applied) from $0.69 to $0.73
and increasing the Tier 3 per item pre-incentive fee from $0.14 to
$0.15. The Reserve Banks intend to keep the Tier 2 per-item pre-
incentive fee the same.
The Reserve Banks will decrease the surcharge for transfers
exceeding $10 million from $0.15 to $0.14.
The Reserve Banks will increase the FedPayments Manager import/
export monthly fee from $45 to $50. In addition, the Reserve Banks will
increase the offline transaction surcharge from $45 to $50. The Reserve
Banks estimate that the price changes will result in an approximate 4.7
percent average price increase for Fedwire Funds customers.
The Reserve Banks will not change National Settlement Service fees
for 2015. The Reserve Banks' Fedwire Funds and National Settlement
Services fees are consistent with their multi-year strategy to minimize
pricing volatility while undertaking ongoing technology upgrades and
related projects to further strengthen information security.
The primary risk to the Reserve Banks' ability to achieve budgeted
2015 cost recovery for these services is cost overruns and schedule
delays from unanticipated problems with managing complex technology
programs.
F. Fedwire Securities Service--Table 12 shows the 2013 actual, 2014
estimate, and 2015 budgeted cost recovery performance for the Fedwire
Securities Service.\38\
---------------------------------------------------------------------------
\38\ 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 12--Fedwire Securities Service Pro Forma Cost and Revenue Performance
[dollars in millions]
----------------------------------------------------------------------------------------------------------------
Recovery rate
Net income after targeted
Year Revenue Total expense (ROE) [1-2] Targeted ROE ROE [1/(2+4)]
%
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2013 (actual)................... 26.9 25.3 1.5 0.2 105.0
2014 (estimate)................. 23.8 23.4 0.4 0.3 100.1
2015 (budget)................... 26.0 26.5 -0.6 0.4 96.5
----------------------------------------------------------------------------------------------------------------
1. 2014 Estimate-- The Reserve Banks estimate that the Fedwire
Securities Service will recover 100.1 percent of total expenses and
targeted ROE, compared with a 2014 budgeted recovery rate of 98.0
percent. The
[[Page 65948]]
higher-than-expected cost recovery is primarily due to lower-than-
budgeted information technology and pension costs, which offset weaker-
than-anticipated volumes and associated revenue.
Through September, Fedwire Securities Service online volume was
31.5 percent lower than the same period last year. For full-year 2014,
the Reserve Banks estimate Fedwire Securities Service online volume to
decline 30.8 percent from 2013 levels, compared to a budgeted decline
of 10.9 percent.
2. 2015 Pricing--The Reserve Banks expect the Fedwire Securities
Service to recover 96.5 percent of total expenses and targeted ROE in
2015. The Reserve Banks project that 2015 revenue and expenses will
increase by $2.2 million and $3.1 million, respectively, compared to
2014 estimates.
The Reserve Banks project that online transfer activity will
decline by 12.9 percent in 2015, the number of accounts maintained will
decrease by 14.1 percent, and the number of agency securities
maintained will increase by 0.1 percent.\39\ The projected decline in
account maintenance activity reflects customer closures of empty
accounts to avoid unnecessary expenses and increased competition in
collateral management services.\40\ The Reserve Banks also estimate a
decrease in online transfer activity, driven by lower expected issuance
of mortgage-backed and agency debt securities. The reduction in
mortgage-backed securities issuance reflects gradually increasing
interest rates and lower anticipated mortgage refinancing. The
reduction in agency debt issuance reflects a further required reduction
in government sponsored enterprise portfolios, which has led to a
reduced funding need for new debt issuance.
---------------------------------------------------------------------------
\39\ The online transfer fee, monthly account maintenance fee,
and monthly issue maintenance fee accounted for 92 percent of total
Fedwire Securities Service revenue through June 2014.
\40\ Specifically, collateral management services refers to the
Fedwire Securities Joint Custody Service, which facilitates the
collateralization of deposits made by a government entity, through
the pledging of book-entry securities by its depository institution.
Approximately 72 percent of Fedwire Securities priced accounts are
collateral accounts related to the Joint Custody Service.
---------------------------------------------------------------------------
Expenses are budgeted to increase by $3.1 million from 2014
estimates, reflecting higher technology upgrade costs. The higher
technology upgrade costs, however, are expected to be partially offset
by higher Treasury reimbursements.\41\
---------------------------------------------------------------------------
\41\ Treasury reimbursement is calculated by multiplying costs
by the ratio of Treasury to agency transfers. In 2015, Treasury
projects its transfer volume will remain flat, while the Reserve
Banks expect agency transfers to decrease. Therefore, the higher
projected ratio of Treasury to agency transfers will result in
Treasury reimbursing a higher portion of total costs.
---------------------------------------------------------------------------
The Reserve Banks will increase various fees for the Fedwire
Securities Service. The Reserve Banks will increase the online transfer
fee from $0.54 to $0.65, the monthly account maintenance fee from $40
to $48, and the monthly issue maintenance fee from $0.54 to $0.65 per
issue. The Reserve Banks will also increase the Joint Custody
Origination Surcharge from $40 to $44. The Reserve Banks estimate that
the price changes will result in an approximate 19.1 percent average
price increase for Fedwire Securities customers.
The primary risk to the Reserve Banks' ability to achieve budgeted
2015 cost recovery for these services is cost overruns and schedule
delays from unanticipated problems with managing complex technology
upgrades.
G. FedLine Access--The Reserve Banks charge fees for the electronic
connections that depository institutions use to access priced services
and allocate the costs and revenue associated with this electronic
access to the various priced services. There are currently five FedLine
channels through which customers can access the Reserve Banks' priced
services: FedMail, FedLine Web[supreg], FedLine Advantage, FedLine
Command[supreg], and FedLine Direct.\42\ The Reserve Banks package
these channels into ten FedLine packages, described in the two
paragraphs 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 a FedLine Advantage connection and a fixed number
of FedACH, Fedwire Funds, and Check 21-enabled services.
---------------------------------------------------------------------------
\42\ FedMail, FedLine Web, FedLine Advantage, FedLine Command,
and FedLine Direct are registered trademarks of the Federal Reserve
Banks.
---------------------------------------------------------------------------
Five attended access packages offer access to critical payment and
information services via a Web-based interface. The FedLine Exchange
package (formerly the FedMail Email package) provides access to basic
information services via email, while two FedLine Web packages offer an
email option plus online attended access to a range of services,
including cash services, FedACH information services, and check
services. Three FedLine Advantage packages expand upon the FedLine Web
packages and offer attended access to critical transactional services:
FedACH, Fedwire Funds, and Fedwire Securities.
Four unattended access packages are computer-to-computer, IP-based
interfaces designed for medium- to high-volume customers. The FedLine
Command package offers an unattended connection to FedACH, as well as
most accounting information services. The three remaining packages are
FedLine Direct packages, which allow for unattended connections at one
of three connection speeds to FedACH, Fedwire Funds, and Fedwire
Securities transactional and information services and to most
accounting information services.\43\
---------------------------------------------------------------------------
\43\ The FedLine Direct base-level package is available to
current customers only and will be phased out in 2015 due to
elimination of 56K line speed.
---------------------------------------------------------------------------
Many of the FedLine access solutions fees in 2015 are designed to
encourage customers to migrate to more efficient access solutions. The
Reserve Banks will increase the fees on legacy services, such as an
additional $10 per month for FedMail Fax, $300 per month for FedLine
Direct (56K), and $400 for an additional 56K connection. The Reserve
Banks also will introduce a $2,500 per month surcharge for those
depository institutions that continue to use the AT&T VPN after
February 1, 2015, instead of migrating to the Sprint VPN.
In addition, the Reserve Banks will make other changes to FedLine
pricing for 2015 to improve contingency preparedness between Reserve
Banks and depository institutions. In particular, the Reserve Banks
will add to the FedLine Advantage channel a new package, FedLine
Advantage Premier that will be priced at $500 per month and includes a
secondary VPN device.\44\ FedLine Advantage Premier will also include
the FedTransaction Analyzer[supreg] tool, which enables depository
institutions to streamline after-the-fact analysis of payment
transactions and automate reporting processes. Depository institutions
with more than 250 Fedwire transactions, or more than one routing
number, will have access to the FedTransaction Analyzer tool via
FedLine Advantage Premier rather than FedLine Advantage Plus
package.\45\
---------------------------------------------------------------------------
\44\ All customers, regardless of their chosen electronic access
channel, are responsible for the purchase and installation of each
VPN device.
\45\ Current FedTransaction Analyzer customers will be
automatically moved to FedLine Advantage Premier if they originate
and receive more than 250 Fedwire funds transfers or have more than
one routing number in a given month. Customers can opt out of the
increased fees by discontinuing their use of the FedTransaction
Analyzer tool or the FedLine Advantage access solution.
---------------------------------------------------------------------------
The Reserve Banks will introduce two new tiers to FedComplete
package solutions called FedComplete 100 Premier and FedComplete 200
Premier,
[[Page 65949]]
which are $850 and $1,375 per month, respectively. These FedComplete
packages include FedLine Advantage Premier.
II. Analysis of Competitive Effect
All operational and legal changes considered by the Board that have
a substantial effect on payments system participants are subject to the
competitive impact analysis described in the March 1990 policy, The
Federal Reserve in the Payments System.\46\ Under this policy, the
Board assesses whether proposed 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.
---------------------------------------------------------------------------
\46\ Federal Reserve Regulatory Service (FRRS) 9-1558.
---------------------------------------------------------------------------
The changes for 2015 are limited to product enhancements and
pricing modifications; no new products or pricing constructs are
introduced. These changes 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 changes
should permit the Reserve Banks to earn a ROE that is comparable to
overall market returns and provide for full cost recovery over the long
run.
III. 2015 Fee Schedules
FedACH Service 2015 Fee Schedule
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
FedACH minimum monthly fee.......
Originating Depository $35.00.
Financial Institution (ODFI)
\47\.
Receiving Depository 25.00.
Financial Institution (RDFI)
\48\.
Origination (per item or record)
\49\.
Forward or return items in 0.0030.
small files.
Forward or return items in 0.0025.
large files.
Addenda record............... 0.0015.
FedLine Web[supreg]- 0.35.
originated returns and
notification of change (NOC)
fee \50\.
Facsimile exception returns/ 45.00.
NOC \51\.
Automated NOC fee............ 0.20.
Volume-based discounts (based
on monthly billed receipt
volume) \52\.
Per item when receipt 0.0002 discount.
volume is 10,000,001 to
17,500,000 items per
month.
Per item when receipt 0.0003 discount.
volume is more than
17,500,000 items per
month.
Receipt (per item or record).....
Forward item................. 0.0025.
Return item.................. 0.0075.
Addenda record............... 0.0015.
On-us receipt credit \53\.... 0.0025 discount.
Volume-based discounts
(forward items excluding
FedACH SameDay service
items).
Non-Premium Receivers--
RDFIs receiving less than
90 percent of total
network volume through
FedACH.
Per item when volume is 0.0007 discount.
1,000,001 to 12,500,000
items per month \54\.
Per item when volume is 0.0009 discount.
more than 12,500,000
items per month \55\.
Premium Receivers, level
one--RDFIs receiving at
least 90 percent of FedACH-
originated volume through
FedACH.
Per item when volume is 0.0007 discount.
1,000,001 to 2,500,000
items per month \58\.
Per item when volume is 0.0008 discount.
2,500,001 to 12,500,000
items per month \58\.
Per item when volume is 0.0010 discount.
more than 12,500,000
items per month.\59\
Premium Receivers, level
two--RDFIs receiving at
least 90 percent of ACH
volume originated through
FedACH or EPN.
Per item when volume is 0.0007 discount.
1,000,001 to 2,500,000
items per month \58\.
Per item when volume is 0.0009 discount.
2,500,001 to 12,500,000
items per month \58\.
Per item when volume is 0.0011 discount.
more than 12,500,000
items per month \59\.
FedACH SameDay Service...........
Origination 56 57............
Forward item in a small 0.0030 surcharge.
file.
Forward item in a large 0.0035 surcharge.
file.
Addenda record........... 0.0015 surcharge.
Return item in a small 0.0030 discount.
file.
Return item in a large 0.0025 discount.
file.
Return addenda record.... 0.0015 discount.
Receipt \58\.................
Forward item............. 0.0025 discount.
Return item.............. 0.0075 discount.
Addenda record (forward/ 0.0015 discount.
return).
Monthly FedACH Risk[supreg]
Management fees \59\.
Risk Origination Monitoring
Service/RDFI Alert Service
package pricing.
For up to 5 criteria sets 35.00.
For 6 through 11 criteria 70.00.
sets.
For 12 through 23 125.00.
criteria sets.
[[Page 65950]]
For 24 through 47 150.00.
criteria sets.
For 48 through 95 250.00.
criteria sets.
For 96 through 191 425.00.
criteria sets.
For 192 through 383 675.00.
criteria sets.
For 384 through 584 850.00.
criteria sets.
For 585+ criteria sets... 1,100.00.
Risk origination monitoring
batch.
For 1 through 100,000 0.007/batch.
batches.
For 100,000+ batches..... 0.0035/batch.
Monthly FedPayments Reporter
Service.
FedPayments Reporter Service
package pricing includes.
Standard reports \60\....
ACH volume summary by SEC
code report--
customer.\61\
Daily return ratio report
Monthly return ratio
report.
Receiver setup report....
Report delivery via
FedLine file access
solution (monthly fee).
For up to 50 reports. 35.00.
For 51 through 150 55.00.
reports.
For 151 through 500 100.00.
reports.
For 501 through 1,000 180.00.
reports.
For 1,001 through 1,500 260.00.
reports.
For 1,501 through 2,500 420.00.
reports.
For 2,501 through 3,500 580.00.
reports.
For 3,501 through 4,500 740.00.
reports.
For 4,501 through 5,500 900.00.
reports.
For 5,501 through 7,000 1,100.00.
reports.
For 7,001 through 8,500 1,300.00.
reports.
For 8,501+ reports....... 1,500.00.
Premier reports \62\.........
ACH volume summary by SEC
code report--depository
financial institution.
Reports 1 through 5.. 10.00/report.
Reports 6 through 10. 6.00/report.
Reports 11+.......... 1.00/report.
On Demand............ 1.00/report surcharge.
ACH volume summary by SEC 1.00/report surcharge.
code report--customer On
Demand.
Monthly ACH routing
number activity report.
Reports 1 through 5.. 10.00/report.
Reports 6 through 10. 6.00/report.
Reports 11+.......... 1.00/report.
On-us inclusion..............
Participation fee........ 10.00/month/RTN.
Per-item fee............. 0.0030.
Per-addenda fee.......... 0.0015.
Report delivery via encrypted 0.20/email.
email.
Other fees.......................
Monthly fee (per routing
number).
Account servicing fee 45.00.
\63\.
FedACH settlement \64\... 55.00.
Information extract file. 100.00.
IAT Output File Sort..... 75.00.
Notification of change 5.00.
participation fee \65\.
Non-electronic input/output
fee \66\.
CD or DVD input/output... 50.00.
Paper input/output....... 50.00.
FedGlobal ACH Payments...........
Canada service fee.......
Item originated to 0.62.
Canada \67\.
Return received from 0.99.
Canada \68\.
Trace of item at 5.50
receiving gateway.
Trace of item not at 7.00.
receiving gateway.
Mexico service fee.......
Item originated to 0.67.
Mexico \67\.
Return received from 0.91.
Mexico \68\.
Item trace........... 13.50.
A2R item originated 3.45.
to Mexico 67 69.
F3X item originated 0.67.
to Mexico 68 70.
Panama service fee.......
Item originated to 0.72.
Panama \67\.
Return received from 1.00.
Panama \68\.
Item trace........... 7.00.
[[Page 65951]]
NOC.................. 0.72.
Latin America service fee
A2R item originated 4.40.
to Latin America 67
69.
Return received from 0.72.
Latin America \68\.
Item trace........... 5.00.
Europe service fee.......
Item originated to 1.25.
Europe \67\.
F3X item originated 1.25.
to Europe 67 70.
Return received from 1.35.
Europe \68\.
Item trace........... 7.00.
------------------------------------------------------------------------
---------------------------------------------------------------------------
\47\ Any ODFI incurring less than 35 in forward value and non-
value item origination fees will be charged a variable amount to
reach the minimum.
\48\ Any RDFI not originating forward value and non-value items
and incurring less than 25 in receipt fees will be charged a
variable amount to reach the minimum.
\49\ Small files contain fewer than 2,500 items and large files
contain 2,500 or more items.
\50\ The fee includes the item and addenda fees in addition to
the conversion fee.
\51\ The fee includes the item and addenda fees in addition to
the conversion fee. Reserve Banks also assess a 30 fee for every
government paper return/NOC they process.
\52\ Origination discounts apply only to those items received by
FedACH receiving points and are available only to Premium Receivers.
\53\ Depository institutions originating and receiving items on
the same routing number.
\54\ This per-item discount is a reduction to the standard
receipt fees listed in this fee schedule.
\55\ Receipt volumes of more than 12,500,000 items per month
qualify for the waterfall discount which includes all FedACH receipt
items.
\56\ This per-item surcharge is in addition to the standard
origination fees for forward items.
\57\ This per-item discount is a reduction to the standard
origination fees for return items.
\58\ This per-item discount is a reduction to the standard
receipt fees.
\59\ 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.
\60\ Standard reports include Customer Transaction Activity,
Death Notification, International (IAT), Notification of Change,
Payment Data Information File, Remittance Advice Detail, Remittance
Advice Summary, Return Item, Return Ratio, Social Security
Beneficiary, and Originator Setup Reports.
\61\ ACH volume summary by SEC code reports generated on demand
are subject to a 1.00 per report surcharge.
\62\ Premier reports generated on demand are subject to the
package/tiered fees plus a surcharge.
\63\ The account servicing fee applies to routing numbers that
have received or originated FedACH transactions. Institutions that
receive only U.S. government transactions through the Reserve Banks
or that elect to use EPN exclusively are not assessed this fee.
\64\ The FedACH settlement fee is applied to any routing number
with activity during a month, including institutions that elect to
use EPN exclusively but also have items routed to or from customers
that access the ACH network through FedACH. This fee does not apply
to routing numbers that use the Reserve Banks for only U.S.
government transactions.
\65\ The notification of change fee is applied to any routing
number with activity during a month. This fee does not apply to
routing numbers that use the Reserve Banks for only U.S. government
transactions.
\66\ Limited services are offered in contingency situations.
\67\ This per-item surcharge is in addition to the standard
domestic origination and input file processing fees.
\68\ This per-item surcharge is in addition to the standard
domestic receipt fees.
\69\ Account-to-receiver (A2R) allows funds from accounts at a
U.S. depository institution to be retrieved by any receiver at
either a participating bank location or a trusted, third-party
provider.
\70\ Payments are both transferred and received in foreign
currency. The foreign exchange rate and settlement is managed and
processed by participating U.S. depository institutions and the
respective foreign gateway operators via their foreign correspondent
banks.
Fedwire Funds and National Settlement Services 2015 Fee Schedule
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Fedwire Funds Service
------------------------------------------------------------------------
Monthly participation fee............................... $90.00
Basic volume-based pre-incentive transfer fee
(originations and receipts)............................
Per transfer for the first 14,000 transfers per 0.73
month..............................................
Per transfer for additional transfers up to 90,000 0.24
per month..........................................
Per transfer for every transfer over 90,000 per 0.15
month..............................................
Volume-based transfer fee with the incentive discount
(originations and receipts) \71\.......................
Per eligible transfer for the first 14,000 transfers 0.148
per month..........................................
Per eligible transfer for additional transfers up to 0.048
90,000 per month...................................
Per eligible transfer for every transfer over 90,000 0.030
per month..........................................
Surcharge for offline transfers (originations and 50.00
receipts)..............................................
Surcharge for high-value payments $10 0.14
million................................................
Surcharge for high-value payments > $100 million........ 0.36
Surcharge for payment notification...................... 0.20
Surcharge for late-day transfer originations \72\....... 0.26
Monthly FedPayments Manager import/export fee \73\...... 50.00
------------------------------------------------------------------------
National Settlement Service
------------------------------------------------------------------------
Basic
Settlement entry fee................................ 1.50
Settlement file fee................................. 30.00
Surcharge for offline file origination.................. 45.00
[[Page 65952]]
Minimum monthly charge (account maintenance) \74\....... 60.00
Special settlement arrangements \75\....................
Fee per day......................................... 150.00
------------------------------------------------------------------------
---------------------------------------------------------------------------
\71\ 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 prior activity, then the customer qualifies
automatically for incentive discounts for the year. The applicable
incentive discounts are as follows: $0.582 for transfers up to
14,000; $0.192 for transfers 14,001 to 90,000; and $0.120 for
transfers over 90,000.
\72\ This surcharge applies to originators of transfers that are
processed by the Reserve Banks after 5:00 p.m. ET.
\73\ 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.
\74\ This minimum monthly charge is only assessed if total
settlement charges during a calendar month are less than $60.
\75\ Special settlement arrangements use Fedwire Funds transfers
to effect settlement. Participants in arrangements and settlement
agents are also charged the applicable Fedwire Funds transfer fee
for each transfer into and out of the settlement account.
Fedwire Securities Service 2015 Fee Schedule
[Effective January 2, 2015. Bold indicates changes from 2014 prices]
------------------------------------------------------------------------
Fee
------------------------------------------------------------------------
Basic transfer fee
Transfer or reversal originated or received......... $0.65
Surcharge...............................................
Offline origination & receipt surcharge............. 66.00
Monthly maintenance fees
Account maintenance (per account)................... 48.00
Issues maintained (per issue/per account)........... 0.65
Claim adjustment fee.................................... 0.75
Joint Custody Origination Surcharge..................... 44.00
------------------------------------------------------------------------
FedLine 2015 Fee Schedule
[Effective January 2, 2015. Bold indicates changes from 2014 prices.]
------------------------------------------------------------------------
FedComplete Packages (monthly) \76\
------------------------------------------------------------------------
FedComplete 100 Plus..................... $775.00.
Includes: 7,500 FedForward transactions..
70 FedReturn[supreg] transactions....
14,000 FedReceipt[supreg]
transactions.
35 Fedwire funds origination
transfers.
35 Fedwire funds receipt transfers...
Fedwire participation fee............
1,000 FedACH origination items.......
FedACH minimum fee...................
7,500 FedACH receipt items...........
FedACH receipt minimum fee...........
10 FedACH web return/NOC.............
500 FedACH addenda originated........
1,000 FedACH addenda received........
FedACH account servicing.............
FedACH settlement....................
FedLine Advantage Plus...............
FedLine subscriber 5-pack............
FedLine Exchange subscriber 5-pack...
FedComplete 100 Premier.................. 850.00.
Includes: 7,500 FedForward transactions..
70 FedReturn transactions............
14,000 FedReceipt transactions.......
35 Fedwire funds origination
transfers.
35 Fedwire funds receipt transfers...
Fedwire participation fee............
1,000 FedACH origination items.......
FedACH minimum fee...................
7,500 FedACH receipt items...........
FedACH receipt minimum fee...........
[[Page 65953]]
10 FedACH web return/NOC.............
500 FedACH addenda originated........
1,000 FedACH addenda received........
FedACH account servicing.............
FedACH settlement....................
FedLine Advantage Premier............
FedLine subscriber 5-pack............
FedLine Exchange subscriber 5-pack...
FedComplete 200 Plus..................... 1,300.00.
Includes: 25,000 FedForward transactions.
225 FedReturn transactions...........
25,000 FedReceipt transactions.......
100 Fedwire funds origination
transfers.
100 Fedwire funds receipt transfers..
Fedwire participation fee............
2,000 FedACH origination items.......
FedACH minimum fee...................
25,000 FedACH receipt items..........
FedACH receipt minimum fee...........
20 FedACH web return/NOC.............
750 FedACH addenda originated........
1,500 FedACH addenda received........
FedACH account servicing.............
FedACH settlement....................
FedLine Advantage Plus...............
FedLine subscriber 5-pack............
FedLine Exchange subscriber 5-pack...
FedComplete 200 Premier.................. 1,375.00.
Includes: 25,000 FedForward transactions.
225 FedReturn transactions...........
25,000 FedReceipt transactions.......
100 Fedwire funds origination
transfers.
100 Fedwire funds receipt transfers..
Fedwire participation fee............
2,000 FedACH origination items.......
FedACH minimum fee...................
25,000 FedACH receipt items..........
FedACH receipt minimum fee...........
20 FedACH web return/NOC.............
750 FedACH addenda originated........
1,500 FedACH addenda received........
FedACH account servicing.............
FedACH settlement....................
FedLine Advantage Premier............
FedLine subscriber 5-pack............
FedLine Exchange subscriber 5-pack...
FedComplete Excess Volume Surcharge. \77\
FedForward........................... 0.01/item.
FedReturn............................ 0.7500/item.
Fedwire funds origination............ 0.7000/item.
FedACH origination................... 0.0025/item.
FedComplete package credit incentive \78\ (1,500.00).
FedLine Customer Access Solutions
(monthly). \79\
FedLine Exchange (formerly FedMail Email) 40.00.
FedLine Web.............................. 110.00.
Includes: FedLine Exchange...............
FedLine Web with no priced services
subscriptions.
FedACH information services (includes
RDFI file alert service).
Check 21 services. \80\
Check 21 duplicate notification......
Check adjustments....................
Service charge information...........
Account management information. \81\
FedLine Web Plus......................... 140.00.
Includes:FedLine Web traditional package.
FedACH risk management services......
FedACH FedPayments Reporter Service
via secure email.
Check large dollar return............
Check FedImage[supreg] services......
Account management information.......
Cash management plus service.........
[[Page 65954]]
Various accounting and other inquiry
and report services (Real-time
Account Balance information,
Daylight Overdraft Balance, and
Available Funds Balance information;
drill down and search features to
view transaction details; daily
Statement of Account and data files;
collateral totals and details; and
ex-post Daylight Overdraft reports)..
FedLine Advantage........................ 380.00.
Includes: FedLine Web traditional package
FedACH transactions..................
Fedwire funds transactions...........
Fedwire securities transactions......
Fedwire cover payments...............
Check large dollar return............
Check FedImage services..............
Account management information.......
Various accounting services (ABMS
inquiry, IAS/PSR inquiry, IAS
detailed inquiries, notifications
and advices, end-of-day accounting
file (PDF)).
FedLine Advantage Plus................... 425.00.
Includes: FedLine Advantage traditional
package.
FedACH risk management services......
FedACH FedPayments Reporter Service
via secure email.
Fedwire Funds FedPayments Manager
import/export.
FedTransaction Analyzer (less than
250 FedWire transactions and one
routing number per month).
Account management information with
intra-day search.
FedLine Advantage Premier................ 500.00.
Includes: FedLine Advantage Plus package
with no priced services subscriptions.
FedTransaction Analyzer (more than
250 Fedwire transactions and two
routing numbers per month).
Secondary VPN device.................
FedLine Command Plus..................... 1,000.00.
Includes: FedLine Advantage Plus package.
FedLine Command with two certificates
Fedwire statement services...........
Intra-day CI file....................
Statement of account spreadsheet file
(SASF).
Financial Institution Reconcilement
Data File (FIRD).
Billing Data Format File (BDFF)......
FedLine Direct. \82\..................... 4,500.00.
Includes: FedLine Advantage traditional
package.
56K Dedicated WAN Connection.........
FedLine Command with two certificates
FedLine Direct with two certificates.
Fedwire statement services...........
Intra-day file (I-Day CI File).......
Statement of Account Spreadsheet File
(SASF).
Financial Institution Reconcilement
Data File (FIRD).
Billing Data Format File (BDFF)......
FedLine Direct Plus...................... 3,600.00.
Includes: FedLine Direct traditional
package.
56K or 256K Dedicated WAN Connection.
FedACH risk management services......
FedACH FedPayments Reporter Service
via secure email.
Fedwire Funds FedPayments Manager
import/export.
FedTransaction Analyzer..............
FedLine Direct Premier................... 6,500.00.
Includes: FedLine Direct Plus package....
T1 Dedicated WAN Connection..........
A La Carte Options (monthly). \83\
Electronic Access........................
FedLine Exchange subscriber 5-pack 10.00.
\84\.
FedLine subscriber 5-pack............ 80.00.
Additional FedLine Command 100.00.
certificate \85\.
Additional FedLine Direct certificate 100.00.
\86\.
Maintenance of additional virtual 60.00.
private network device.
FedLine Advantage 800# Usage (per 3.00.
hour).
Dial-Only VPN surcharge.............. 1,000.00.
Additional dedicated connections.
\87\
56K.............................. 3,500.00.
256K............................. 2,500.00.
T1............................... 3,200.00.
FedLine international setup (one-time 5,000.00.
fee).
FedLine Direct contingency solution 1,000.00.
\88\.
Check 21 large file delivery......... various.
FedMail Fax.......................... 70.00.
Legacy VPN device surcharge \89\..... 2,500.00.
[[Page 65955]]
VPN device modification.............. 200.00.
VPN device modification emergency 200.00.
surcharge.
VPN device missed activation 175.00.
appointment.
VPN device expedited hardware 100.00.
surcharge.
VPN device replacement or move....... 300.00.
Expedited legacy VPN device order/ 500.00.
change \90\.
Accounting Information Services..........
Cash Management System. \91\
Plus--Own report--up to six files 60.00.
with no respondent/sub-account
activity (per month).
Plus--Own report--up to six files 125.00.
with less than 10 respondent and/
or sub-accounts (per month).
Plus--Own report--up to six files 250.00.
with 10-50 respondent and/or sub-
accounts (per month).
Plus--Own report--up to six files 500.00.
with 51-100 respondents and/or
sub-accounts (per month.
Plus--Own report--up to six files 750.00.
with 101-500 respondents and/or
sub-accounts (per month).
Plus--Own report--up to six files 1,000.00.
with >500 respondents and/or sub-
accounts (per month).
End-of-day financial institution 150.00.
reconcilement data file (per month)
\92\.
Statement of account spreadsheet file 150.00.
(per month) \93\.
Intra-day download search file (with 150.00.
AMI) (per month) \94\.
ACTS Report--<20 sub-accounts........ 500.00.
ACTS Report--21-40 sub-accounts...... 1,000.00.
ACTS Report--41-60 sub-accounts...... 1,500.00.
ACTS Report--> 60 sub-accounts....... 2,000.00.
------------------------------------------------------------------------
---------------------------------------------------------------------------
\76\ FedComplete packages are all-electronic service options
that bundle payment services with an access solution for one monthly
fee.
\77\ Per-item surcharges are in addition to the standard fees
listed in the applicable priced services fee schedules.
\78\ New FedComplete package customers with a new FedLine
Advantage connection are eligible for a one-time $1,500 credit
applied to their Federal Reserve service charges. Customers
receiving credit must continue using the FedComplete package for a
minimum of six months or forfeit the $1,500 credit.
\79\ VPN hardware for FedLine Advantage and FedLine Command is
billed directly by the vendor. A list of fees can be found at https://www.frbservices.org/files/servicefees/pdf/access/2013_vendor_fees.pdf.
\80\ Check 21 services can be accessed via three options:
FedLine Web, an Internet connection with Axway Secure Transport
Client, or a dedicated connection using Connect: Direct.
\81\ Ex-post Daylight Overdraft Reports and the daily Statement
of Account are available via FedMail.
\82\ FedLine Direct is available to installed customer base
only. The 56K option is not available for new orders.
\83\ These add-on services can be purchased only with a FedLine
Customer Access Service option.
\84\ There are no priced subscribers contained in the FedLine
Exchange or FedLine packages.
\85\ Additional FedLine Command Certificates available for
FedLine Command and Direct packages only.
\86\ Additional FedLine Direct Certificates available for
FedLine Direct packages only.
\87\ Network diversity supplemental charge of $2,000 a month may
apply in addition to these fees.
\88\ FedLine Direct contingency solution is available only for
FedLine Direct Plus & Premier packages.
\89\ Effective February 1, 2015. Price will increase to $5,000
on May 1, 2015 and $7,500 on September 1, 2015.
\90\ Applicable to VPN devices ordered before May 13, 2013.
\91\ Cash Management Service options are limited to Plus and
Premier packages.
\92\ End of Day Reconcilement File option is available to
FedLine Web Plus and FedLine Advantage Plus packages.
\93\ Statement of Account Spreadsheet File option is available
to FedLine Web Plus and FedLine Advantage Plus packages.
\94\ ACTS Report options are limited to FedLine Command Plus and
FedLine Direct Plus and Premier packages.
By order of the Board of Governors of the Federal Reserve
System, October 31, 2014.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2014-26322 Filed 11-5-14; 8:45 am]
BILLING CODE P
