[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1442 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1442

To amend the Federal Reserve Act to expand the opportunity for private 
   enterprise to compete with the Board of Governors of the Federal 
 Reserve System in the provision of check-clearing and other services, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 24, 1997

Mr. Gonzalez (for himself and Mrs. Maloney of New York) introduced the 
  following bill; which was referred to the Committee on Banking and 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Reserve Act to expand the opportunity for private 
   enterprise to compete with the Board of Governors of the Federal 
 Reserve System in the provision of check-clearing and other services, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; PURPOSES.

    (a) Short Title.--This Act may be cited as the ``Federal Reserve 
Free Enterprise Act''.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To facilitate the development of private enterprise and 
        jobs by promoting competition with the Board of Governors of 
        the Federal Reserve System (hereafter in this section referred 
        to as the ``Board'') in the provision of check-clearing and 
        other services.
            (2) To further promote such competition by having the Board 
        fairly and accurately price the services provided by the Board 
        or any Federal reserve bank.
            (3) To save taxpayer funds by eliminating the subsidy the 
        Board provides through the maintenance of a pricing system for 
        check-clearing and other services which does not fully recover 
        the cost of providing such services.
            (4) To end the practice of the Board of bundling together 
        all the costs and revenue from all check-clearing and other 
        services provided by the Board or any Federal reserve bank and 
        require the Board to price each readily identifiable component 
        of each such service in a way that ensures that the full amount 
        of the costs incurred which are allocable to the provision of 
        such component is fully recovered.
            (5) To stimulate innovation and provide a wider range of 
        check-clearing and other services through market competition 
        and the free flow of information.

SEC. 2. COMPETITIVE PRICING OF SERVICES.

    (a) Clarification of Fee Schedule Requirements.--
            (1) In general.--Section 11A(b) of the Federal Reserve Act 
        (12 U.S.C. 248a(b)) is amended by striking paragraph (2) and 
        all that follows through paragraph (8) and inserting the 
        following new paragraphs:
            ``(2) check processing involving sorting and routing paper 
        checks, and settlement services;
            ``(3) electronic funds transfer services;
            ``(4) automated clearinghouse services;
            ``(5) electronic cashletter services;
            ``(6) securities safekeeping services;
            ``(7) check image capture services;
            ``(8) check truncation services;
            ``(9) image archive warehousing services;
            ``(10) electronic check presentation services;
            ``(11) adjustment of incorrect debits or credits services;
            ``(12) return of `bad' checks services;
            ``(13) transportation of paper checks services in the 
        clearing process;
            ``(14) presentation point services;
            ``(15) payor bank service or controlled disbursements 
        services;
            ``(16) any other service which the Board offers, directly 
        or through a Federal reserve bank; and
            ``(17) each readily identifiable component of any service 
        described in a preceding paragraph.''.
            (2) Publication within 60 days.--Before the end of the 60-
        day period beginning on the date of the enactment of this Act, 
        the Board of Governors of the Federal Reserve System shall 
        publish a revision of the schedule of fees required under 
        section 11A of the Federal Reserve Act which reflects the 
        changes required in the schedule because of the amendment made 
        by paragraph (1).
    (b) Pricing of Service Components.--Section 11A of the Federal 
Reserve Act (12 U.S.C. 248a) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively: and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Pricing of Service Components.--
            ``(1) Request for separate pricing of component.--If--
                    ``(A) any person seeks to compete with the Board or 
                any Federal reserve bank in the provision of any 
                component of any service referred to in subsection (b); 
                and
                    ``(B) the Board has not provided an explicit price 
                for such component in the fee schedule maintained by 
                the Board under this section,
        such person may submit a description of the service to be 
        provided and a request for a statement of an explicit price for 
        the provision of such component by the Board or bank.
            ``(2) Action on request.--Except as provided under 
        paragraph (3), the Board shall--
                    ``(A) comply with any request submitted under 
                paragraph (1); and
                    ``(B) include the price in the schedule of fees 
                maintained by the Board before the end of the 60-day 
                period beginning on the date the Board receives such 
                request.
            ``(3) Frivolous and meritless request.--The Board may 
        decline any request under paragraph (1) which the Board 
        determines, in accordance with regulations which the Board 
        shall prescribe, is frivolous and without any merit whatsoever 
        if the Board publishes a notice of the findings and conclusions 
        of the Board with regard to such determination.''.
    (c) Documentation.--Section 714 of title 31, United States Code, is 
amended by adding at the end the following new subsection:
    ``(e) Review of Pricing of Services Provided by the Federal Reserve 
System.--
            ``(1) In general.--The Comptroller General shall conduct an 
        annual audit of the Board of Governors of the Federal Reserve 
        System and the Federal reserve banks to determine whether the 
        requirements of subsection (c)(3) of section 11A of the Federal 
        Reserve Act are being met with respect to each component of any 
        service referred to in subsection (b) of such section.
            ``(2) Documentation.--Notwithstanding any restriction in 
        this section or any other provision of law relating to the 
        scope of any audit of the Board of Governors of the Federal 
        Reserve System or any Federal reserve bank by the Comptroller 
        General--
                    ``(A) the Board and each Federal reserve bank shall 
                maintain such documents and information as the 
                Comptroller General determines may be useful for 
                purposes of any audit under paragraph (1) for such 
                reasonable period of time as the Comptroller General 
                determines to be appropriate; and
                    ``(B) the Comptroller General shall have full 
                access to such documents for purposes of any audit 
                under paragraph (1).
            ``(3) Report.--A report on each audit conducted under 
        paragraph (1) shall be submitted annually to the Congress.''.
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