BACKGROUND

The act specifies that fees are to be set for the following Federal Reserve Bank services in accordance with the pricing principles adopted by the Board:

The legislative history of the act indicates that Congress had two objectives in establishing a requirement that the Federal Reserve price the services it provides. First, Congress sought to encourage competition in order to assure provision of these services at the lowest cost to society. While intending to stimulate competition, Congress did not wish to precipitate the reemergence of undesirable banking practices—such as non-par banking or circuitous routing of checks—which the Federal Reserve System was designated to eliminate. Also, Congress was concerned with ensuring an adequate level of services nationwide. Consequently, it charged the Board with adopting pricing principles that “give due regard to competitive factors and the provision of an adequate level of such services nationwide.” This objective is clearly established in the pricing principles established by the act.

Second, Congress was concerned with the amount of revenue lost to the Treasury due to the reduction in the level of aggregate required reserves resulting from the implementation of the reserve requirement provisions of the act. Pricing for Federal Reserve Bank services will generate revenue that will partially offset the revenue loss associated with reduced required reserves.