[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79310-79330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28096]


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FEDERAL RESERVE SYSTEM

[Docket No. OP-1787]


Federal Reserve Bank Services

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
has approved the private-sector adjustment factor (PSAF) for 2023 of 
$23.7 million and the 2023 fee schedules for Federal Reserve priced 
services and electronic access. These actions were taken in accordance 
with the Monetary Control Act of 1980, which requires that, over the 
long run, fees for Federal Reserve priced services be established based 
on all direct and indirect costs, including the PSAF.

DATES: The new fee schedules become effective January 3, 2023.

FOR FURTHER INFORMATION CONTACT: For questions regarding the fee 
schedules: Ian Spear, Assistant Director, (202) 452-3959; Christian 
Miller, Lead Financial Institution Policy Analyst, (202) 452-3769; 
Division of Reserve Bank Operations and Payment Systems. For questions 
regarding the PSAF: Rebecca Royer, Deputy Associate Director, (202) 
736-5662; Sarah Skariah, Senior Financial Institution Policy Analyst, 
(202) 973-6882, Division of Reserve Bank Operations and Payment 
Systems. For users of TTY-TRS, please call 711 from any telephone, 
anywhere in the United States. Copies of the 2023 fee schedules for the 
check services are available from the Board, the Federal Reserve Banks, 
or the Federal Reserve Financial Services website at 
www.FRBservices.org.

SUPPLEMENTARY INFORMATION:

I. Private-Sector Adjustment Factor, Priced Services Cost Recovery, and 
Overview of 2023 Price Changes

    A. Overview--Each year, as required by the Monetary Control Act 
(MCA) of 1980, the Reserve Banks set fees for priced services provided 
to financial institutions. These fees are set to recover, over the long 
run, all direct and indirect costs and imputed costs, including 
financing costs, taxes, and certain other expenses, as well as the 
return on equity (profit) that would have been earned if a private-
sector business provided the services.\1\ The imputed costs and imputed 
profit are collectively referred to as the private-sector adjustment 
factor (PSAF).
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    \1\ Although the Monetary Control Act does not define ``over the 
long run,'' the Board has generally measured long-run cost recovery 
for mature services to be over a 10-year rolling time frame. The 
Board currently views a 10-year cost recovery expectation as 
appropriate for assessing mature services, which are those that have 
achieved a critical mass of customer participation and generally 
have stable and predictable volumes, costs, and revenues. The 10-
year recovery rate is based on the pro forma income statements for 
Federal Reserve priced services published in the Board's Annual 
Report. In accordance with Accounting Standards Codification (ASC) 
715 Compensation--Retirement Benefits, the Reserve Banks recognized 
a $686.5 million cumulative reduction in equity related to the 
priced services' benefit plans through 2021. Including this 
cumulative reduction in equity from 2012 to 2021 results in cost 
recovery of 94.3 percent for the 10-year period. This measure of 
long-run cost recovery is also published in the Board's Annual 
Report.
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    From 2012 through 2021, the Reserve Banks recovered 103.0 percent 
of their total expenses (including imputed costs) and targeted after-
tax profits or return on equity (ROE).\2\ During that period, check 
services, the Fedwire[supreg] Funds Service, National Settlement 
Service, and Fedwire Securities Service achieved full cost recovery. 
FedACH[supreg] Services achieved 97.9 percent cost recovery as a result 
of the Reserve Banks' development and implementation of a multiyear 
technology initiative to modernize the FedACH Services processing 
platform capabilities. Although the modernized platform was implemented 
in 2021, the Reserve Banks are continuing to invest in platform 
capabilities, as well as resiliency initiatives, as part of a broader 
enhancement strategy. At the same time, the Reserve Banks have made 
limited changes to existing FedACH Services fees to provide price 
stability for customers in alignment with pricing policies.\3\
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    \2\ The Board communicated in its 2019 Notice Federal Reserve 
Actions to Support Interbank Settlement of Instant Payments (``2019 
Notice'') that it expects the FedNow Service to achieve its first 
instance of long run cost recovery outside the 10-year time frame 
typically applied to mature services. New services like the FedNow 
Service may not initially have stable volumes, costs, and revenues. 
Application of the 10-year rolling time frame used to evaluate 
mature services to the FedNow Service would result in prohibitively 
high or unnecessarily volatile pricing, negatively affecting the 
Federal Reserve's public policy objectives in providing the service. 
See ``Federal Reserve Actions to Support Interbank Settlement of 
Instant Payments,'' 84 FR 39297, (August 9, 2019). Available at: 
https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf.
    \3\ In alignment with the Board's Principles for the Pricing of 
Federal Reserve Bank Services, the Reserve Banks will continue to 
assess the tradeoffs between price stability for customers, 
investment in technology infrastructure to reflect desirable longer-
run improvements in the ACH system, and the expectation of achieving 
full cost recovery for the FedACH Service over the long run. See 
Board of Governors of the Federal Reserve System, ``Adoption of Fee 
Schedules and Pricing Principles for Federal Reserve Bank 
Services,'' 46 FR 1338, 1343 (Jan. 6, 1981). Available at https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf.
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    Table 1 summarizes 2021 actual, 2022 forecasted, and 2023 budgeted 
annual cost recovery rates for all priced services, excluding 
FedNow\SM\ Service cost and revenue.\4\ Cost recovery is

[[Page 79311]]

forecasted to be 101.1 percent in 2022 and budgeted to be 100.2 percent 
in 2023.
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    \4\ Per its 2019 Notice, the Board will disclose the FedNow 
Service's costs, inclusive of PSAF-related expenses, beginning the 
year the service is available to participating banks (currently 
anticipated in mid-2023). See ``Federal Reserve Actions to Support 
Interbank Settlement of Instant Payments,'' 84 FR 39297, (August 9, 
2019). Available at https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-17027.pdf.

                  Table 1--Aggregate Priced Services Pro Forma Cost and Revenue Performance \a\
                                              [Dollars in millions]
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                                                                                                   Recovery rate
              Year                    Revenue      Total expense    Net income     Targeted ROE   after targeted
                                                                       (ROE)                         ROE  (%)
                                           1 \b\           2 \c\               3           4 \d\           5 \e\
                                                                           [1-2]                     [1/(2 + 4)]
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2021 (actual)...................           456.0           452.7             3.3             4.4            99.8
2022 (forecast).................           470.1           458.0            12.1             7.2           101.1
2023 (budget)...................           495.8           486.2             9.6             8.4           100.2
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\a\ Calculations in this table and subsequent pro forma cost and revenue tables may be affected by rounding.
  Excludes amounts related to the development of the FedNow Service.
\b\ Revenue includes imputed income on investments when equity is imputed at a level that meets minimum capital
  requirements and, when combined with liabilities, exceeds total assets (attachment 1). For 2023, the projected
  revenue assumes implementation of the fee changes.
\c\ The calculation of total expense includes operating, imputed, and other expenses. Imputed and other expenses
  include taxes, Board of Governors' priced services expenses, the cost of float, and interest on imputed debt,
  if any. Credits or debits related to the accounting for pension plans under ASC 715 are also included.
\d\ Targeted ROE is the after-tax ROE included in the PSAF.
\e\ The recovery rates in this and subsequent tables do not reflect the unamortized gains or losses that must be
  recognized in accordance with ASC 715. Future gains or losses, and their effect on cost recovery, cannot be
  projected.

    Table 2 provides an overview of cost recovery budgets, forecasts, 
and performance for the 10-year period from 2012 to 2021, 2021 actual, 
2022 budget, 2022 forecast, and 2023 budget by priced service.

                                     Table 2--Priced Services Cost Recovery
                                                   [Percent)]
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                                                                   2022  Budget                    2023  Budget
         Priced service              2012-2021     2021  Actual         \a\       2022  Forecast        \b\
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All services....................           103.0            99.8           101.3           101.1           100.2
Check...........................           109.1           103.2            97.1           100.4           100.1
FedACH..........................            97.9            98.0           100.4           102.3           100.7
Fedwire Funds and NSS...........           102.1            98.6           100.3            99.2            97.7
Fedwire Securities..............           102.4           103.8           149.4           108.4           109.3
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\a\ The 2022 budget figures reflect the final budgets as approved by the director of the Division of Reserve
  Bank Operations and Payment Systems under delegated authority given by the Board, who conditionally approved
  the final budgets in December 2021. See Board of Governors of the Federal Reserve System, ``2022 Federal
  Reserve Bank Budget Memo and Addendum'' available at 2022 Federal Reserve Bank Budget Memo and Addendum. These
  budget figures incorporate the implementation of a new cost accounting framework and a new Enterprise Resource
  Planning application, which had not been fully implemented when the initial cost recovery figures for 2022
  budget were calculated and reported in last year's Federal Register Notice.
\b\ The 2023 budget figures reflect preliminary budget information from the Reserve Banks. The Reserve Banks
  will submit final budget data to the Board in November 2022, for Board consideration in December 2022.

    1. 2022 Forecasted Performance--The Reserve Banks forecast that 
they will recover 101.1 percent of the costs of providing priced 
services in 2022, including total expense and targeted ROE, compared 
with a 2022 budgeted recovery rate of 101.3 percent, as shown in table 
2. Overall, the Reserve Banks forecast that they will fully recover 
actual and imputed costs and earn net income of $12.1 million, compared 
with the targeted ROE of $7.2 million. The Reserve Banks forecast that 
check services, the FedACH Services, and the Fedwire Securities Service 
will achieve full cost recovery.\5\ The Reserve Banks forecast that the 
Fedwire Funds Service and the National Settlement Service will not 
achieve full cost recovery in 2022. Forecasted under-recovery in 2022 
for the Fedwire Funds Service and the National Settlement Service is 
driven by an effort to avoid significant price volatility for customers 
while maintaining long-run cost recovery.
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    \5\ The Fedwire Securities Service over-recovery position is 
primarily driven by lower-than-budgeted operating and pension costs 
forecasted for 2022.
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    2. 2023 Private-Sector Adjustment Factor--The 2023 PSAF for Reserve 
Bank priced services is $23.7 million.\6\ This amount represents an 
increase of $4.3 million from the 2022 PSAF of $19.4 million. This 
increase is attributable to a $2.6 million increase in the cost of 
capital primarily driven by rising interest rates, a $1.1 million 
increase in sales tax, and a $0.6 million increase in Board of 
Governors expenses.
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    \6\ Inclusive of the FedNow Service, the PSAF increases to $27.4 
million for 2023. In alignment with its 2019 Notice related to the 
FedNow Service, fees that will be introduced in 2023 are based on 
costs in a mature volume environment. These costs include PSAF-
related expenses the service has incurred over time.
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    3. 2023 Projected Performance--The Reserve Banks project a priced 
services cost recovery rate of 100.2 percent in 2023, with a net gain 
of $9.6 million and

[[Page 79312]]

targeted ROE of $8.4 million.\7\ The Reserve Banks project that each of 
the individual service lines will achieve full cost recovery in 2023 
except for the Fedwire Funds Service and the National Settlement 
Service. The Fedwire Funds Service and the National Settlement Service 
are expected to under recover because of ongoing technology 
investments, higher operating costs, and a strategy of providing price 
stability to customers during a period of rising costs.
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    \7\ The FedNow Service will be available mid-2023. Per its 2019 
Notice ``Federal Reserve Actions to Support Interbank Settlement of 
Faster Payments'' (``2019 Notice''), the Board has determined that 
it is most appropriate to report FedNow Service cost recovery 
independently of mature priced services until the service has 
relatively stable revenues and costs. Thus, FedNow Service cost and 
revenue is excluded from overall performance projections for 2023. 
See ``Federal Reserve Actions to Support Interbank Settlement of 
Faster Payments,'' 4 FR 39297, (August 9, 2019). Available here: 
Federal Register:: Federal Reserve Actions To Support Interbank 
Settlement of Faster Payments.
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    The Reserve Banks' primary risks to current projections are 
unanticipated volume and revenue reductions and the potential for cost 
overruns from new and ongoing improvement initiatives.
    4. 2023 Pricing--The following summarizes the Reserve Banks' 
proposed changes to fee schedules for priced services in 2023:

Check

     The Reserve Banks will increase the check Participation 
Fee by $20 to $100 depending on the tier.
     The Reserve Banks will increase check Premium Delivery 
Fees in the FedReceipt[supreg] suite of offerings for 8:00 a.m. ET 
target fees by $0.005, from $0.032 to $0.037, 10:00 a.m. local target 
fees by $0.002, from $0.020 to $0.022, and noon local target fees by 
$0.001, from $0.015 to $0.016.
     The Reserve Banks will increase check Reject Repair Fees 
by $0.05 for both basic and premium users.
     The Reserve Banks will increase all check FedImage[supreg] 
product fees by 10 percent.
     The Reserve Banks will increase forward paper fees for 
Canadian cash letter fees for U.S. and Canadian funds by $2.00 and per-
item fees by $0.50, Canadian Amount Encoding per-item fee by $0.35, 
Foreign GBP and EURO per-item fee by $3.00, Foreign All Other per-item 
fee by $3.00, Foreign Collection per-item fee by $7.00, and the Mixed 
Forward Products cash letter fee by $2.00 and per-item fee by $0.50.
     The Reserve Banks will increase return paper fees for 
Large Dollar Return Item Notification (LDRIN) via the FedLine 
Web[supreg] access solution per-item fee by $0.50, Return Item Reclear 
cash letter fee by $1.00 and per-item fee by $0.05, Qualified and 
Unqualified Return Item cash letter fee by $2.00 and per-item fee by 
$1.00, and the Return Item Qualification per-item fee by $1.75.

FedACH

     The Reserve Banks will add a new fifth tier to the FedACH 
Receipt Discount offered to Premium Receiver at a volume threshold of 
30 million items per month. The discount for the new tier increases the 
current highest discount by $0.0003 to $0.0023 per-item for Premium 
Receivers, Level One \8\ and to $0.0024 per-item for Premium Receivers, 
Level Two.\9\
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    \8\ RDFIs receiving through FedACH at least 90 percent of their 
FedACH-originated items, but less than 90 percent of all of their 
ACH items originated through any operator.
    \9\ RDFIs receiving through FedACH at least 90 percent of all of 
their ACH items originated through any operator.
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     The Reserve Banks will increase the FedACH Participation 
fee from $65 to $75 per routing transit number (RTN) per month.
     The Reserve Banks will introduce a tiered FedACH 
Settlement Fee structure with fees ranging from $60 to $200 per RTN per 
month, based on Premium Receiver status.
     The Reserve Banks will increase the FedACH Information 
File Extract Fee from $150 to $180 per month.
     The Reserve Banks will increase the International ACH 
Transaction (IAT) File Fee from $75 to $150 per month.
     The Reserve Banks will increase the FedACH Risk[supreg] 
Management Services Package Fees approximately 20 percent per month 
depending on the tier.
     The Reserve Banks will introduce a monthly tiered FedACH 
Exception Resolution Service fee structure with fees ranging from $20 
to $500 per month based on monthly case volume count.

Fedwire Funds

     The Reserve Banks will increase the tier 1 volume-based 
pre-incentive transfer fee from $0.88 to $0.92.
     The Reserve Banks will increase the tier 2 volume-based 
pre-incentive transfer fee from $0.255 to $0.285.
     The Reserve Banks will increase the tier 3 volume-based 
pre-incentive transfer fee from $0.17 to $0.18.
     The Reserve Banks will increase the surcharge for offline 
transfers from $70 to $75.

National Settlement Service

     The Reserve Banks will keep prices at existing levels for 
all priced National Settlement Service products.

Fedwire Securities

     The Reserve Banks will decrease the agency transfer fee 
from $0.77 to $0.61.
     The Reserve Banks will decrease the Treasury transfer fee 
from $0.77 to $0.61.
     The Reserve Banks will decrease the issue maintenance fee 
from $0.77 to $0.61.
     The Reserve Banks will transition the transfer and 
settlement of marketable Treasury bills, notes, and bonds over the 
Fedwire Securities Service from a fiscal agency service to a priced 
service.
     The Reserve Banks will introduce Fedwire Securities 
Lending claims adjustment fees to mortgage-backed securities (MBS), 
Treasury, and non-Treasury debt securities through the Automated Claims 
Adjustment Process (ACAP) enhancements, expanding ACAP eligibility to 
all coupon paying securities. Further, the ACAP enhancements will 
establish two new fees in the schedule.\10\
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    \10\ The two new fees in the schedule are (1) Repo and 
Securities Lending Tracking Indicators and (2) Repo and Securities 
Lending Position Maintenance.
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FedNow Service

     The Reserve Banks will introduce a customer credit 
transfer and customer credit transfer return fee of $0.045 per-item. 
Customer credit transfers up to 2,500 transactions will be discounted 
to $0.00 in 2023 per RTN per month.
     The Reserve Banks will introduce a FedNow participation 
fee of $25.00 per RTN per month. This fee will be discounted to $0.00 
in 2023 per RTN per month.
     The Reserve Banks will introduce a Request for Payment 
(RFP) fee of $0.01 per-item.
     The Reserve Banks will introduce a Liquidity Management 
Transfer fee of $1.00 per transfer.

FedLine[supreg] Solutions

     The Reserve Banks will discontinue FedMail[supreg] Fax 
Service by December 31, 2023.
     The Reserve Banks will introduce a flat fee assessment for 
FedMail[supreg] Fax Service of $200 per month.
     The Reserve Banks will increase the price for FedMail 
Email Service (for customers with FedLine Web and above) from $60 to 
$85.
     The Reserve Banks will increase the price for FedMail 
Subscribers from $15 to $25.
     The Reserve Banks will discontinue FedComplete[supreg] 100 
Command Plus and FedComplete 200 Command Plus.
     The Reserve Banks will increase the price for FedComplete 
100 Advantage

[[Page 79313]]

Plus from $825 to $900 and FedComplete 100 Advantage Premier from $900 
to $975.
     The Reserve Banks will increase the price for FedComplete 
200 Advantage Plus from $1,350 to $1,425 and FedComplete 200 Advantage 
Premier from $1,425 to $1,500.
     The Reserve Banks will introduce a flat fee assessment for 
legacy VPN devices of $400 per month to customers who have not started 
the migration by October 1, 2023.
     The Reserve Banks will collect FedLine Direct fees from 
FedLine Direct, Check 21 Large File Delivery and other FedLine Command 
or FedLine Advantage customers that use a wide area network connection.
    B. Private-Sector Adjustment Factor--The imputed debt financing 
costs, targeted ROE, and effective tax rate are based on a U.S. 
publicly traded firm market model.\11\ The method for calculating the 
financing costs in the PSAF requires determining the appropriate 
imputed levels of debt and equity and then applying the applicable 
financing rates. In this process, a pro forma balance sheet using 
estimated assets and liabilities associated with the Reserve Banks' 
priced services is developed, and the remaining elements that would 
exist are imputed as if these priced services were provided by a 
private business firm. The same generally accepted accounting 
principles that apply to commercial-entity financial statements apply 
to the relevant elements in the priced services pro forma financial 
statements.
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    \11\ Data for U.S. publicly traded firms is from the Standard 
and Poor's Compustat[supreg] database. This database contains 
information on more than 6,000 U.S. publicly traded firms, which 
approximates information for the entirety of the U.S. market.
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    The portion of Federal Reserve assets that will be used to provide 
priced services during the coming year is determined using information 
about actual assets and projected disposals and acquisitions. The 
priced portion of these assets is determined based on the allocation of 
depreciation and amortization expenses of each asset class. The priced 
portion of actual Federal Reserve liabilities consists of 
postemployment and postretirement benefits, accounts payable, and other 
liabilities. The priced portion of the actual net pension asset or 
liability is also included on the balance sheet.\12\
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    \12\ The pension assets are netted with the pension liabilities 
and reported as a net asset or net liability as required by ASC 715 
Compensation--Retirement Benefits.
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    The equity financing rate is the targeted ROE produced by the 
capital asset pricing model (CAPM). In the CAPM, the required rate of 
return on a firm's equity is equal to the return on a risk-free asset 
plus a market risk premium. The risk-free rate is based on the three-
month Treasury bill; the beta is assumed to be equal to 1.0, which 
approximates the risk of the market as a whole; and the market risk 
premium is based on the monthly returns in excess of the risk-free rate 
over the most recent 40 years. The resulting ROE reflects the return a 
shareholder would expect when investing in a private business firm.
    For simplicity, given that federal corporate income tax rates are 
graduated, state income tax rates vary, and various credits and 
deductions can apply, an actual income tax expense is not explicitly 
calculated for Reserve Bank priced services. Instead, the Board targets 
a pretax ROE that would provide sufficient income to fulfill the priced 
services' imputed income tax obligations. To the extent that 
performance results are greater or less than the targeted ROE, income 
taxes are adjusted using the effective tax rate.
    Capital structure. The capital structure is imputed based on the 
imputed funding need (assets less liabilities), subject to minimum 
equity constraints. Short-term debt is imputed to fund the imputed 
short-term funding need. Long-term debt and equity are imputed to meet 
the priced services long-term funding need at a ratio based on the 
capital structure of the U.S. publicly traded firm market. The level of 
equity must meet the minimum equity constraints, which follow the FDIC 
requirements for a well-capitalized institution. The priced services 
must maintain equity of at least 5 percent of total assets and 10 
percent of risk-weighted assets.\13\ Any equity imputed that exceeds 
the amount needed to fund the priced services' assets and meet the 
minimum equity constraints is offset by a reduction in imputed long-
term debt. When imputed equity is larger than what can be offset by 
imputed debt, the excess is imputed as investments in Treasury 
securities; income imputed on these investments reduces the PSAF.
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    \13\ The FDIC rule, which was adopted as final on April 14, 
2014, requires that well-capitalized institutions meet or exceed the 
following standards: (1) total capital to risk-weighted assets ratio 
of at least 10 percent, (2) tier 1 capital to risk-weighted assets 
ratio of at least 8 percent, (3) common equity tier 1 capital to 
risk-weighted assets ratio of at least 6.5 percent, and (4) a 
leverage ratio (tier 1 capital to total assets) of at least 5 
percent. Because all of the Federal Reserve priced services' equity 
on the pro forma balance sheet qualifies as tier 1 capital, only 
requirements 1 and 4 are binding. The FDIC rule can be located at 12 
CFR 324.403(b).
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    Application of the Payment System Risk (PSR) Policy to the Fedwire 
Funds Service. The Board's PSR policy incorporates the international 
standards for financial market infrastructures (FMIs) developed by the 
Committee on Payments and Market Infrastructure and the Technical 
Committee of the International Organization of Securities Commissions 
in the Principles for Financial Market Infrastructures.\14\ The policy 
requires that the Fedwire Funds Service meet or exceed the applicable 
risk-management standards. Principle 15 states that an FMI should 
identify, monitor, and manage general business risk and hold sufficient 
liquid net assets funded by equity to cover potential general business 
losses so that it can continue operations and services as a going 
concern if those losses materialize. Further, liquid net assets should 
at all times be sufficient to ensure a recovery or orderly wind-down of 
critical operations and services. The Fedwire Funds Service does not 
face the risk that a business shock would cause the service to wind 
down in a disorderly manner and disrupt the stability of the financial 
system. To foster competition with private-sector FMIs, however, the 
Reserve Banks' priced services will hold an amount equivalent to six 
months of the Fedwire Funds Service's current operating expenses as 
liquid financial assets and equity on the pro forma balance sheet.\15\ 
Current operating expenses are defined as normal business operating 
expenses on the income statement, less depreciation, amortization, 
taxes, and interest on debt. Using the Fedwire Funds Service's 
preliminary 2023 budget, six months of current operating expenses would 
be $69.5 million. In 2023, $49.9 million of equity was imputed to meet 
the FDIC capital requirements. Additional equity of $19.7 million was 
necessary to meet the PSR policy requirement.
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    \14\ The Committee on Payments and Market Infrastructure was 
formerly the Committee on Payment and Settlement Systems.
    \15\ This requirement does not apply to the Fedwire Securities 
Service. There are no competitors to the Fedwire Securities Service 
that would face such a requirement, and imposing such a requirement 
when pricing the securities services could artificially increase the 
cost of these services.
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    Effective tax rate. Like the imputed capital structure, the 
effective tax rate is calculated based on data from U.S. publicly 
traded firms. The tax rate is the mean of the weighted average rates of 
the U.S. publicly traded firm market over the past five years.
    Debt and equity financing. The imputed short- and long-term debt 
financing rates are derived from the nonfinancial commercial paper 
rates from the Federal Reserve Board's H.15 Selected Interest Rates 
release (AA and

[[Page 79314]]

A2/P2) and the annual Merrill Lynch Corporate & High Yield Index rate, 
respectively. The equity financing rate is described above. The rates 
for debt and equity financing are applied to the priced services 
estimated imputed short-term debt, long-term debt, and equity needed to 
finance short- and long-term assets and meet equity requirements.
    The 2023 PSAF is $23.7 million, compared with $19.4 million in 
2022. The increase of $4.3 million is attributable to a net $2.6 
million increase in the cost of capital, a $1.1 million increase in 
sales tax due to inflation, and a $0.6 million increase in Board of 
Governors expenses. The net $2.6 million increase in cost of capital is 
primarily driven by a $2.0 million increase in return on equity imputed 
to satisfy FDIC requirements of a well-capitalized institution and 
rising interest rates resulting in a $1.2 million increase in cost of 
debt.
    The PSAF expense of $23.7 million, detailed in table 5, reflects 
$11.6 million for capital funding, $6.8 million for BOG expense, and 
$5.3 million in sales tax expense.
    As shown in table 3, 2023 total assets of $805.6 million increased 
by $15.5 million from 2022. The net increase in total assets reflects 
and additional $25.2 million long-term assets partially offset by a net 
$9.7 million decrease in short-term assets and imputed investments.
    The net long-term asset increase of $25.2 million primarily 
consists of a $25.1 million increase in the net pension asset, 
reflecting higher plan contributions planned for 2022 and for 2023. In 
addition to this, Bank premises, furniture and equipment, and software 
and tenant improvement reflect a combined increase of $19.8 million as 
a result of additional assets allocated to the priced services. The 
decrease in the deferred tax asset is due to a change in the discount 
rate.
    The decrease in the short-term assets is primarily driven by a 
$34.7 million decrease in the imputed investments in Treasury 
securities from imputed equity required to meet FDIC capital 
requirements for a well-capitalized institution and to comply with the 
PSR policy, partially offset by a $10.0 million increase in imputed 
investments in Fed Funds.
    The capital structure of the 2023 pro forma balance sheet, provided 
in table 4, is composed of equity of $69.5 million, or 13.9 percent of 
the 2023 risk-weighted assets detailed in table 6, and no long-term 
debt. The 2023 capital structure differs from that of 2022, which was 
composed of $77.6 million of equity and no long-term debt. Provided in 
table 5, the 2023 initially imputed equity required to fund assets and 
meet the publicly traded firm model capital requirements is $1.0 
million. As long-term assets are marginally greater than long-term 
liabilities, long-term debt of $1.4 million was imputed at the observed 
market ratio of 59.1 percent. To meet the FDIC capital requirements for 
a well-capitalized institution, $1.4 million of imputed long-term debt 
was substituted for equity, and additional equity of $48.9 million was 
imputed to meet the FDIC capital requirements. The resulting $49.9 
million total level of equity was not sufficient to satisfy the $69.5 
million equity needed for the PSR policy requirements, and additional 
equity of $19.7 million was imputed.
    The net Accumulated Other Comprehensive loss is $640.8 million, 
compared with $687.7 million in 2022. The $46.9 million increase is 
primarily attributable to a higher discount rate. AOCI is in a net loss 
position and does not reduce the total imputed equity required to fund 
priced services assets or fulfill the FDIC equity requirements for a 
well-capitalized institution.

         Table 3--Comparison of Pro Forma Balance Sheets for Budgeted Federal Reserve Priced Services a
                                [Millions of dollars--projected average for year]
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                                                                       2023            2022           Change
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Short-term assets:
    Receivables.................................................           $41.9           $39.0            $2.8
    Inventory...................................................             0.2             0.4           (0.2)
    Prepaid expenses............................................            30.9            30.5             0.4
    Items in process of collection \16\.........................            76.0            64.0            12.0
                                                                 -----------------------------------------------
        Total short-term assets.................................           148.9           133.9            15.1
Imputed investments: \17\
    Imputed investment in Treasury Securities...................            67.2           101.9          (34.7)
    Imputed investment in Fed Funds.............................           182.0           172.0            10.0
                                                                 -----------------------------------------------
        Total imputed investments...............................           249.2           273.9          (24.7)
Long-term assets:
    Premises \18\...............................................           100.0            87.6            12.5
    Furniture and equipment.....................................            54.2            51.9             2.3
    Software and leasehold improvements.........................            69.9            64.8             5.1
    Net pension asset...........................................            25.9             0.9            25.1
    Deferred tax asset..........................................           157.4           177.1          (19.7)
                                                                 -----------------------------------------------
        Total long-term assets..................................           407.5           382.3            25.2
                                                                 -----------------------------------------------
            Total assets........................................           805.6           790.1            15.5
                                                                 ===============================================
Short-term liabilities:
    Deferred credit items.......................................           258.0           236.0            22.0
    Short-term debt.............................................            47.0            21.6            25.3
    Short-term payables.........................................            25.9            48.3          (22.3)
                                                                 -----------------------------------------------
        Total short-term liabilities............................           330.9           305.9            25.1
Long-term liabilities:
    Postemployment/postretirement benefits and net pension                 405.2           406.6           (1.4)
     liabilities \19\...........................................
                                                                 -----------------------------------------------
        Total liabilities.......................................           736.1           712.4            23.7

[[Page 79315]]

 
        Equity \20\.............................................            69.5            77.6           (8.1)
                                                                 -----------------------------------------------
            Total liabilities and equity........................           805.6           790.1            15.5
----------------------------------------------------------------------------------------------------------------
\a\ Calculations in this table and subsequent PSAF tables may be affected by rounding.


           Table 4--Imputed Funding for Priced-Services Assets
                          [Millions of dollars]
------------------------------------------------------------------------
                                               2023            2022
------------------------------------------------------------------------
A. Short-term asset financing:
    Short-term assets to be financed:...
        Receivables.....................           $41.9           $39.0
        Inventory.......................             0.2             0.4
        Prepaid expenses................            30.9            30.5
                                         -------------------------------
    Total short-term assets to be                   72.9            69.9
     financed...........................
        Short-term payables.............            25.9            48.3
    Net short-term assets to be financed            47.0            21.6
                                         ===============================
    Imputed short-term debt financing               47.0            21.6
     \21\...............................
B. Long-term asset financing:
    Long-term assets to be financed:....
        Premises........................           100.0            87.6
        Furniture and equipment.........            54.2            51.9
        Software and Leasehold                      69.9            64.8
         Improvements...................
        Net pension asset...............            25.9             0.9
        Deferred tax asset..............           157.4           177.1
                                         -------------------------------
    Total long-term assets to be                   407.5           382.3
     financed...........................
        Postemployment/postretirement              405.2           406.6
         benefits and net pension
         liabilities....................
        Net long-term assets to be                  69.5            77.6
         financed.......................
        Imputed long-term debt \21\.....
        Imputed equity \21\.............            69.5            77.6
                                         ===============================
            Total long-term financing...            69.5            77.6
------------------------------------------------------------------------


                                  Table 5--Derivation of the 2023 and 2022 PSAF
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                               2023                            2022
                                                 ---------------------------------------------------------------
                                                       Debt           Equity           Debt           Equity
----------------------------------------------------------------------------------------------------------------
A. Imputed long-term debt and equity:
    Net long-term assets to finance.............           $ 2.3           $ 2.3        $ (24.3)        $ (24.3)
    Capital structure observed in market........           59.1%           40.9%           59.1%           40.9%
    Pre-adjusted long-term debt and equity......           $ 1.4           $ 1.0        $ (14.3)         $ (9.9)
    Equity adjustments: \22\....................
        Equity to meet capital requirements.....  ..............            49.9  ..............            46.8
        Adjustment to debt and equity funding              (1.4)             1.4          (14.4)            14.4
         given capital requirements \23\........
        Adjusted equity balance.................  ..............             2.3  ..............          (24.3)
        Equity to meet capital requirements \24\  ..............            47.5  ..............            71.1
                                                 ---------------------------------------------------------------
            Total imputed long-term debt and                   $          $ 49.9               $          $ 46.8
             equity.............................
                                                 ===============================================================
B. Cost of capital:
    Elements of capital costs:..................
        Short-term debt \25\....................   $ 47.0 x 2.6%           $ 1.2   $ 21.6 x 0.1%           $ 0.0
                                                               =                               =
        Long-term debt \25\.....................      - x 3.6% =  ..............      - x 3.4% =  ..............
        Equity \26\.............................  49.9 x 14.9% =             7.4  46.8 x 11.6% =             5.4
                                                                 ----------------                ---------------
                                                  ..............           $ 8.7  ..............           $ 5.4
C. Incremental cost of PSR policy:

[[Page 79316]]

 
    Equity to meet policy.......................  $ 19.7 x 14.9%           $ 2.9  $ 30.8 x 11.6%           $ 3.6
                                                               =                               =
                                                                 ----------------                ---------------
D. Other required PSAF costs:
    Sales taxes.................................           $ 5.3  ..............           $ 4.2  ..............
    Board of Governors expenses.................             6.8  ..............             6.2  ..............
                                                 ----------------                ----------------
                                                                            12.1  ..............            10.4
                                                                 ----------------                ---------------
                                                                          $ 23.7  ..............          $ 19.4
                                                                 ================                ===============
E. Total PSAF:
    As a percent of assets......................  ..............            2.9%  ..............            2.5%
    As a percent of expenses....................  ..............            3.9%  ..............            4.3%
F. Tax rates....................................  ..............           19.3%  ..............           20.3%
----------------------------------------------------------------------------------------------------------------


                Table 6--Computation of 2023 Capital Adequacy for Federal Reserve Priced Services
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Weighted
                                                                      Assets        Risk weight       assets
----------------------------------------------------------------------------------------------------------------
Imputed investments:
    1-Year Treasury securities \27\.............................           $67.2  ..............               $
    Federal funds \28\..........................................           182.0             0.2            36.4
                                                                 -----------------------------------------------
        Total imputed investments...............................           249.2  ..............            36.4
Receivables.....................................................            41.9             0.2             8.4
Inventory.......................................................             0.2             1.0             0.2
Prepaid expenses................................................            30.9             1.0            30.9
Items in process of collection..................................            76.0             0.2            15.2
Premises........................................................           100.0             1.0           100.0
Furniture and equipment.........................................            54.2             1.0            54.2
Software and leasehold Improvements.............................            69.9             1.0            69.9
Pension asset...................................................            25.9             1.0            25.9
Deferred tax asset..............................................           157.4             1.0           157.4
                                                                 -----------------------------------------------
    Total.......................................................           805.6  ..............           498.5
                                                                 ===============================================
Imputed equity:
    Capital to risk-weighted assets.............................           13.9%  ..............  ..............
    Capital to total assets.....................................            8.6%  ..............  ..............
----------------------------------------------------------------------------------------------------------------

     
---------------------------------------------------------------------------

    \16\ Credit float, which represents the difference between items 
in process of collection and deferred credit items, occurs when the 
Reserve Banks debit the paying bank for transactions before 
providing credit to the depositing bank. Float is directly estimated 
at the service level.
    \17\ Consistent with the Board's PSR policy, the Reserve Banks' 
priced services will hold an amount equivalent to six months of the 
Fedwire Funds Service's current operating expenses as liquid net 
financial assets and equity on the pro forma balance sheet. Six 
months of the Fedwire Funds Service's projected current operating 
expenses is $69.5 million. In 2023, $19.7 million of equity was 
imputed to meet the regulatory capital requirements.
    \18\ Includes the allocation of Board of Governors assets to 
priced services of $2.7 million for 2023 and $2.1 million for 2022.
    \19\ Includes the allocation of Board of Governors liabilities 
to priced services of $1.3 million for 2023 and $1.3 million for 
2022.
    \20\ Includes an accumulated other comprehensive loss of $640.8 
million for 2023 and $687.7 million for 2022, which reflects the 
ongoing amortization of the accumulated loss in accordance with ASC 
715. Future gains or losses, and their effects on the pro forma 
balance sheet, cannot be projected. See table 5 for calculation of 
requird imputed equity amount.
    \21\ Imputed short-term debt financing is computed as the 
difference between short-term assets and short-term liabilities. As 
presented in table 5, the financing costs of imputed short-term 
debt, imputed long-term debt and imputed equity are the elements of 
cost of capital, which contribute to the calculation of the PSAF.
    \22\ If minimum equity constraints are not met after imputing 
equity based on the capital structure observed in the market, 
additional equity is imputed to meet these constraints. The long-
term funding need was met by imputing long-term debt and equity 
based on the capital structure observed in the market (see tables 4 
and 6). In 2022, the amount of imputed equity met the minimum equity 
requirements for risk-weighted assets.
    \23\ Equity adjustment offsets are due to a shift of long-term 
debt funding to equity in order to meet FDIC capital requirements 
for well-capitalized institutions.
    \24\ Additional equity in excess of that needed to fund priced 
services assets is offset by an asset balance of imputed investments 
in treasury securities.
    \25\ Imputed short-term debt and long-term debt are computed at 
table 4.
    \26\ The 2023 ROE is equal to a risk-free rate plus a risk 
premium (beta * market risk premium). The 2022 after-tax CAPM ROE is 
calculated as 2.29% + (1.0 * 9.72%) = 12.02%. Using a tax rate of 
19.3%, the after-tax ROE is converted into a pretax ROE, which 
results in a pretax ROE of (12.02%/(1-19.3%)) = 14.88%. Calculations 
may be affected by rounding.
    \27\ If minimum equity constraints are not met after imputing 
equity based on all other financial statement components, additional 
equity is imputed to meet these constraints. Additional equity 
imputed to meet minimum equity requirements is invested solely in 
Treasury securities. The imputed investments are similar to those 
for which rates are available on the Federal Reserve's H.15 
statistical release, which can be located at http://www.federalreserve.gov/releases/h15/data.htm.
    \28\ The investments are imputed based on the amounts arising 
from the collection of items before providing credit according to 
established availability schedules.

---------------------------------------------------------------------------

[[Page 79317]]

    C. Check Services--Table 7 shows the 2021 actual, 2022 forecasted, 
and 2023 budgeted cost-recovery performance for commercial check 
services.

                         Table 7--Check Services Pro Forma Cost and Revenue Performance
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Recovery rate
              Year                    Revenue      Total expense    Net income     Targeted roe   after targeted
                                                                       (roe)                            roe
                                               1               2               3               4               5
                                                                           [1-2]                     [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)...................           109.9           105.4             4.5             1.1           103.2
2022 (forecast).................           110.6           109.1             1.5             1.0           100.4
2023 (budget)...................           108.2           106.7             1.5             1.3           100.1
----------------------------------------------------------------------------------------------------------------

    1. 2022 Forecast--The Reserve Banks forecast that check services 
will recover 100.4 percent of total expenses and targeted ROE, compared 
with a 2022 budgeted recovery rate of 97.1 percent.
    Through August, total commercial forward and total commercial 
return check volumes were 6.4 percent lower and 18.8 percent greater, 
respectively, than they were during the same period last year. For 
full-year 2022, the Reserve Banks estimate that their total forward 
check volume will decline 7.0 percent (compared with a budgeted decline 
of 7.4 percent) and their total return check volume will increase 12.7 
percent (compared with a budgeted decline of 10.2 percent) from 2021 
levels. The Reserve Banks expect that check volumes will continue to 
decline, although uncertainty remains as to the rate of decline into 
2023.\29\ In particular, the Reserve Banks' check volumes are expected 
to decline because of substitution away from checks to other payment 
instruments.
---------------------------------------------------------------------------

    \29\ Return rates (as a percentage of forward volume) dropped 
dramatically in 2020 and 2021, likely because of the three rounds of 
Economic Impact Payments (EIPs) and other federal and state programs 
in response to the pandemic. Reserve Banks expected these lower 
rates to continue in 2022, but instead have seen return rates 
relative to forward volume revert to pre-Covid levels.
---------------------------------------------------------------------------

    2. 2023 Pricing--The Reserve Banks expect check services to recover 
100.1 percent of total expenses and targeted ROE. The Reserve Banks 
project revenue to be $108.2 million, a decline of $2.4 million, or 2.2 
percent from the 2022 forecast. Total expenses for check services are 
projected to be $106.7, a decrease of $2.4 million, or 2.2 percent, 
from 2022 forecasted expenses.
    The Reserve Banks will increase the pricing tiers for the fixed 
monthly participation fee. In light of the ongoing volume declines and 
growing costs related to check processing infrastructure, the changes 
are intended to continue to support revenue stability through fixed 
fees while minimizing the impact of fee increases on smaller 
institutions, taking into account higher system utilization costs 
associated with higher volumes from larger institutions. Table 8 shows 
the 2023-tiered participation fees.
---------------------------------------------------------------------------

    \30\ This fee is charged to financial institutions that have 
received any Check 21 electronic or substitute check volume (forward 
or return) from the Reserve Banks during the month. The fee is 
applied at the parent financial institution level, as defined in the 
Reserve Banks' Global Customer Directory. Each financial 
institution's tier assignment is determined by the criteria 
described in the FedForward Standard Endpoint Tier Listing.

              Table 8--Check 21 Participation Fee Structure
------------------------------------------------------------------------
                                                                Monthly
                          Tier \30\                               fee
------------------------------------------------------------------------
1...........................................................     $325.00
2...........................................................      200.00
3...........................................................      130.00
4...........................................................       75.00
------------------------------------------------------------------------

    The Reserve Banks will increase FedReceipt[supreg] Premium Delivery 
Fees for the 8:00 a.m. ET target by $0.005, from $0.032 to $0.037, for 
the 10:00 a.m. local target by $0.002, from $0.020 to $0.022, and for 
the noon local target by $0.001, from $0.015 to $0.016. The Reserve 
Banks will increase Reject Repair fees for both basic and premium users 
by $0.05.
    Additionally, the Reserve Banks will adopt a combination of fixed 
and variable pricing changes to legacy products and services. These 
changes are a continuation of targeting products that are in the later 
stages of the product life cycle to encourage customers to use modern 
services. First, the Reserve Banks will increase all FedImage[supreg] 
product fees 10 percent and sunset eight services that are no longer 
used or minimally used.\31\ Second, the Reserve Banks will increase 
cash letter fees for forward Canadian Check Clearing for U.S. funds and 
Canadian funds by $2.00 (13 percent) and per-item fees by $0.50 (9 
percent), Canadian Amount Encoding per-item fees by $0.35 (21 percent), 
Foreign GBP and EURO per-item fees by $3.00 (14 percent), Foreign All 
Other per-item fees by $3.00 (14 percent), Foreign Collection per-item 
fees by $7.00 (8 percent), and the Mixed Forward Products cash letter 
fees by $2.00 (13 percent) and per-item fees by $0.50 (12 percent). 
Lastly, the Reserve Banks will increase per-item return paper fees for 
Large Dollar Return Item Notification (LDRIN) via the FedLine Web 
access solution by $0.50 (12 percent), Return Item Reclear cash letter 
fees by $1.00 (10 percent) and per-item fees by $0.05 (5.0 percent to 
7.0 percent depending on dollar value levels), Qualified and 
Unqualified Return Item cash letter fees by $2.00 (13 percent) and per-
item fees by $1.00 (14 percent), and the Return Item Qualification per-
item fee by $1.75 (21 percent).
---------------------------------------------------------------------------

    \31\ The following FedImage Services will be discontinued: image 
capture + 7 business day archive, image capture on-us surcharge, 
dual archive (transition period up to 120 days), extended dual 
archive (more than 120 days), reoccurring request retrievals to 
email via FedLine web, CD-ROM--tape, CD-ROM selected accounts 
service-RAID, and information retrieval--FedLine (non-image).
---------------------------------------------------------------------------

    As check volumes continue to decline, the proposed pricing 
increases are intended to help stabilize check revenues, to shift the 
revenue mix toward fixed fees, and to continue a value-based pricing 
strategy for financial institutions that use the services.
    The Reserve Banks estimate the above price changes, along with an 
expected decrease in volume, will result in an overall 4.5 percent 
average price increase for check services' customers.
    The Reserve Banks' primary risk to current projections for check 
services is

[[Page 79318]]

a greater-than-expected decline in check volume due to the general 
reduction in check writing and competition from correspondent banks, 
aggregators, and direct exchanges, which would result in lower-than-
anticipated revenue.
    D. FedACH[supreg] Services--Table 9 shows the 2021 actual, 2022 
forecasted, and 2023 budgeted cost-recovery performance for commercial 
FedACH Services.

                         Table 9--FedACH Services Pro Forma Cost and Revenue Performance
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Recovery rate
              Year                    Revenue      Total expense    Net income     Targeted roe   after targeted
                                                                       (roe)                            roe
                                               1               2               3               4               5
                                                                           [1-2]                     [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)...................           165.7           167.5           (1.7)             1.7            98.0
2022 (forecast).................           173.1           167.6             5.5             1.5           102.3
2023 (budget)...................           178.6           175.2             3.5             2.2           100.7
----------------------------------------------------------------------------------------------------------------

    1. 2022 Forecast--The Reserve Banks forecast that FedACH Services 
will recover 102.3 percent of total expenses and targeted ROE, compared 
with a budgeted recovery rate of 100.4 percent.
    Through August, FedACH commercial origination and receipt volume 
was 3.9 percent higher than it was during the same period last year. 
For the full year 2022, the Reserve Banks estimate that FedACH 
commercial origination and receipt volume will increase 2.9 percent 
from 2021 levels, compared with a 2021 budgeted increase of 4.9 
percent.
    2. 2023 Pricing--The Reserve Banks expect FedACH Services to 
recover 100.7 percent of total expenses and targeted ROE in 2023. The 
Reserve Banks project revenue to be $178.6 million, an increase of $5.5 
million, or 3.2 percent, from the 2022 forecast. Total expenses are 
projected to be $175.2 million, an increase of $7.6 million, or 4.5 
percent, from the 2022 forecast.
    The Reserve Banks will add a new fifth tier to the ACH Receipt 
Discount offered to Premium Receiver customers at a volume threshold of 
30 million items per month. The new discount tier increases the current 
highest discount by $0.0003 to $0.0023 per-item for Premium Receivers, 
Level One and to $0.0024 per-item for Premium Receivers, Level Two.\32\
---------------------------------------------------------------------------

    \32\ Premium Receivers, Level One: RDFIs receiving through 
FedACH at least 90 percent of their FedACH-originated items, but 
less than 90 percent of all of their ACH items originated through 
any operator. Premium Receivers, Level Two: RDFIs receiving through 
FedACH at least 90 percent of all of their ACH items originated 
through any operator.
---------------------------------------------------------------------------

    The Reserve Banks will increase the monthly ACH Participation Fee 
from $65 to $75 per RTN per month. In addition, the Reserve Banks will 
introduce a tiered ACH Settlement Fee structure with fees ranging from 
$60 to $200 per RTN per month based on Premium Receiver status.\33\ 
Over the past years, the Reserve Banks have made minimal changes to 
existing FedACH Participation and Settlement Fees.\34\ The price 
changes are driven by ongoing operational costs and increased costs 
associated with introducing three additional intraday settlement 
windows to FedACH, and reflect higher utilization costs associated with 
higher volumes.
---------------------------------------------------------------------------

    \33\ Premium Receivers will be subject to a settlement fee of 
$60 per RTN per month. Non-Premium Receivers with a volume threshold 
of less than 1,500,000 items per month will be subject to a 
settlement fee of $100 per RTN per month. Non-Premium Receivers with 
a volume threshold of more than 1,500,000 items per month will be 
subject to a settlement fee of $200 per RTN per month.
    \34\ The last increase to the FedACH Participation Fee was in 
2018, from $58 to $65, or 12 percent. The last increase to the 
FedACH Settlement Fee was in 2014, from $50 to $55, or 10 percent.
---------------------------------------------------------------------------

    The Reserve Banks will increase the monthly FedACH Information File 
Extract Fee from $150 to $180 per month. In addition, the Reserve Banks 
will increase the IAT File Fee from $75 to $150 per month, and the 
FedACH Risk[supreg] Package Fees approximately 20 percent depending on 
the tier. The price changes reflect ongoing technology investments and 
infrastructure enhancements along with minimal price increases for 
these value-added services in previous years.\35\
---------------------------------------------------------------------------

    \35\ The last increase to the FedACH Information File Extract 
Fee was in 2017, from $100 to $150. The last increase to the IAT 
File Fee was in 2012, from $50 to $75. The FedACH Risk Package Fee 
has not been increased since it was first introduced in 2013.
---------------------------------------------------------------------------

    The Reserve Banks will modify the existing FedACH Exception 
Resolution Service fee structure and introduce a monthly fee tiered by 
usage and consolidated at the parent Depository Financial Institution 
level. Fees will range from $20 to $500 depending on monthly case 
volume count. The new tiered fee structure will simplify the current 
pricing structure by replacing existing fixed monthly and variable per 
case fees.
    The Reserve Banks estimate the above price changes will result in a 
4.4 percent average price increase for FedACH customers.
    The Reserve Banks will continue to assess pricing strategies that 
balance price stability with ongoing investments in system 
enhancements, while responding to economic and market dynamics. The 
Reserve Banks' primary risks to current projections for FedACH Services 
are unanticipated cost overruns associated with continued technology 
and resiliency investments, and lower-than-projected volumes and growth 
due to the market and economic environment.
    E. Fedwire[supreg] Funds Service and National Settlement Service--
Table 10 shows the 2021 actual, 2022 forecasted, and 2023 budgeted 
cost-recovery performance for the Fedwire Funds Service and the 
National Settlement Service.

[[Page 79319]]



     Table 10--Fedwire Funds Service and National Settlement Service Pro Forma Cost and Revenue Performance
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Recovery rate
              Year                    Revenue      Total expense    Net income     Targeted roe   after targeted
                                                                       (roe)                            roe
                                               1               2               3               4               5
                                                                           [1-2]                     [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)...................           152.7           153.4           (0.7)             1.5            98.6
2022 (forecast).................           161.7           158.7             3.0             4.3            99.2
2023 (budget)...................           164.4           164.0             0.4             4.3            97.7
----------------------------------------------------------------------------------------------------------------

    1. 2022 Forecast--The Reserve Banks forecast that the Fedwire Funds 
Service and the National Settlement Service will recover 99.2 percent 
of total expenses and targeted ROE, compared with a budgeted recovery 
rate of 100.3 percent.
    Through August, Fedwire Funds Service online volume was 1.4 percent 
lower than it was during the same period last year. For full-year 2022, 
the Reserve Banks estimate that Fedwire Funds Service online volume 
will increase 0.1 percent from 2021 levels, compared with the 12.9 
percent volume increase that had been budgeted. Through August, the 
National Settlement Service settlement file volume was 2.9 percent 
higher than it was during the same period last year, and settlement 
entry volume was 1.4 percent higher. For full-year 2022, the Reserve 
Banks estimate that settlement file volume will increase 1.1 percent 
(compared with a budgeted decrease of 3.1 percent) and settlement entry 
volume will decrease 0.1 percent from 2021 levels (compared with a 
budgeted 2.6 percent decrease).
    2. 2023 Pricing--The Reserve Banks expect the Fedwire Funds Service 
and the National Settlement Service to recover 97.7 percent of total 
expenses in 2023. Revenue is projected to be $164.4 million, an 
increase of 1.7 percent from the 2022 forecast. The Reserve Banks 
project total expenses to be approximately $5.3 million higher than 
2022 expenses, an increase of 3.3 percent, primarily reflecting ongoing 
technology investments, including those associated with the Fedwire 
Funds Service's transition to the ISO[supreg] 20022 messaging 
format.\36\ In addition, the National Settlement Service incurred 
higher costs in 2022 because of the expansion of its operating 
hours.\37\
---------------------------------------------------------------------------

    \36\ In October 2021, the Board announced that the Federal 
Reserve Banks will adopt the ISO 20022 message format for the 
Fedwire[supreg] Funds Service. See New Message Format for the 
Fedwire Funds Services, 86 FR 55600 (June 27, 2022). Available at 
Federal Register Notice: New Message Format for the Fedwire Funds 
Service (federalreserve.gov).
    \37\ The National Settlement Service expanded its hours to 21.5 
hours per day in 2022, with a new 9:00 p.m. ET open for the next 
business day.
---------------------------------------------------------------------------

    The Reserve Banks will increase all three of the gross origination 
and receipt tiered fees. The tier 1 fee will increase from $0.88 to 
$0.92, the tier 2 fee will increase from $0.255 to $0.285, and the tier 
3 fee will increase from $0.17 to $0.18. In addition, the offline send 
and receive surcharge for the Fedwire Funds Service will increase from 
$70.00 to $75.00. The Reserve Banks estimate the above price changes 
will result in an overall 8.3 percent average price increase for 
Fedwire Funds Service customers.
    The Reserve Banks will not change National Settlement Service fees 
for 2023.
    The Reserve Banks' primary risk to current projections for these 
services is uncertainty about the economic outlook for 2023, which 
complicates the accuracy of 2023 volume projections. Historically, 
Fedwire Funds Service volume has reflected market conditions, and a 
broader downturn in 2023 would likely result in a decrease in Fedwire 
Funds Service volume.\38\ Separately, unexpected increases in 2023 
technology costs would likely result in reduced cost recovery for the 
year.
---------------------------------------------------------------------------

    \38\ Fedwire Funds Service volume growth reflects economic 
growth. For example, its volume has grown every year except for 2008 
and 2009, when it contracted 2.5 percent and 5.0 percent, 
respectively, during the Great Recession. For historical Fedwire 
Funds Service volume data, see frbservices.org, ``Fedwire Funds 
Service--Annual Statistics. Available at: https://www.frbservices.org/resources/financial-services/wires/volume-value-stats/annual-stats.html.
---------------------------------------------------------------------------

    F. Fedwire Securities Service--Table 11 shows the 2021 actual, 2022 
forecast, and 2023 budgeted cost-recovery performance for the Fedwire 
Securities Service.\39\
---------------------------------------------------------------------------

    \39\ The Reserve Banks provide transfer services for securities 
issued by the U.S. Treasury, federal government agencies, 
government-sponsored enterprises, and certain international 
institutions. The priced component of this service, reflected in 
this memorandum, consists of revenues, expenses, and volumes 
associated with the transfer of all non-Treasury securities. For 
Treasury securities, the U.S. Treasury assesses fees for the 
securities transfer component of the service. The Reserve Banks 
assess a fee for the funds settlement component of a Treasury 
securities transfer; this component is not treated as a priced 
service.

                   Table 11--Fedwire Securities Service Pro Forma Cost and Revenue Performance
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Recovery rate
              Year                    Revenue     Total  expense    Net income     Targeted roe   after targeted
                                                                       (roe)                            roe
                                               1               2               3               4               5
                                                                           [1-2]                     [1/(2 + 4)]
----------------------------------------------------------------------------------------------------------------
2021 (actual)...................            27.7            26.5             1.2             0.2           103.8
2022 (forecast).................            24.7            22.6             2.1             0.2           108.4
2023 (budget)...................            44.5            40.3             4.3             0.5           109.3
----------------------------------------------------------------------------------------------------------------


[[Page 79320]]

    1. 2022 Forecast--The Reserve Banks forecast that the Fedwire 
Securities Service will recover 108.4 percent of total expenses and 
targeted ROE, compared with a 2022 budgeted recovery rate of 149.4 
percent.
    For full-year 2022, volume for account maintenance is expected to 
decline from 2021 levels, while volumes for issue maintenance are 
expected to increase modestly from 2021 levels. Through August, account 
maintenance volume was 2.9 percent lower than it was during the same 
period last year. For full-year 2022, the Reserve Banks estimate that 
account maintenance volume will decline 3.2 percent from 2021 levels, 
compared with a budgeted decline of 4.6 percent. Through August, the 
number of agency issues maintained was 2.0 percent higher than it was 
during the same period last year. For full-year 2022, the Reserve Banks 
estimate that the number of agency issues maintained will increase 2.2 
percent from 2021 levels, compared with a budgeted decline of 0.6 
percent.
    2. 2023 Pricing--The Reserve Banks expect the Fedwire Securities 
Service to recover 109.3 percent of total expenses and targeted ROE in 
2023. Revenue is projected to be $44.5 million, an increase of 80.2 
percent from the 2022 revenue forecast. The Reserve Banks also project 
that 2023 expenses will increase by $17.7 million from the 2022 
forecast, an increase of 78.3 percent.
    The Reserve Banks project that agency transfer volume will remain 
relatively stable compared with previous years, with no notable changes 
that could potentially have a significant impact on agency transfers. 
The volume of Treasury security transfers is projected to increase 
because of anticipated growth of public debt. The volume of accounts 
maintained are expected to decrease 3.0 percent, consistent with recent 
trends and primarily driven by a reduction in joint custody accounts. 
The volume of agency issues maintained is expected to remain relatively 
flat, driven by expectations that security holdings will become 
increasingly concentrated and the volume of MBS CUSIPs on priced 
Securities Accounts will continue to increase. Claim adjustment volume 
is expected to increase with enhancements to the ACAP product. The 
Reserve Banks will decrease the agency transfer fee, the Treasury 
transfer fee, and the issue maintenance fee from $0.77 to $0.61 as part 
of a strategic transition to more accurately align costs across product 
offerings and to adjust for the large over-recovery in 2022.
    In response to direction from the U.S. Department of the Treasury, 
the Reserve Banks will offer to participants the transfer and 
settlement of marketable Treasury bills, notes, and bonds over the 
Fedwire Securities Service as a priced service effective January 3, 
2023. This will align the Reserve Banks' treatment of transfer and 
settlement of Treasury securities with its treatment of transfer and 
settlement of non-Treasury securities.\40\
---------------------------------------------------------------------------

    \40\ Currently, the Reserve Banks provide transfer services for 
Treasury securities as fiscal agent on behalf of the U.S. Department 
of the Treasury. Fees related to transfers of Treasury securities 
are set by the U.S. Department of the Treasury and collected by the 
Reserve Banks. The fees are then remitted to the U.S. Department of 
the Treasury by the Reserve Banks. The U.S. Department of the 
Treasury currently reimburses the Reserve Banks for the associated 
costs.
---------------------------------------------------------------------------

    Following the transition of transfer services for Treasury 
securities to a priced service, the Reserve Banks will set, charge, 
collect, and retain fees from customers for transfers of Treasury 
securities, obviating the need for remittance to and reimbursement from 
the U.S. Department of the Treasury.
    As part of the ACAP enhancements, the Reserve Banks are introducing 
several changes to ACAP pricing.
    First, the Reserve Banks will introduce the pricing of applicable 
claim adjustments on newly ACAP-eligible security types, Treasury 
securities, and non-Treasury debt securities, as part of the 
implementation of the ACAP enhancement project in 2023. The ACAP 
enhancements will add a new claim type, Securities Lending, to the 
existing claim adjustments. This change will result in an extension of 
the pricing schedule to Securities Lending claim adjustments for MBS, 
Treasury, and non-Treasury debt securities.
    Further, the Reserve Banks will expand the existing ACAP's pricing 
schedule to include Repo Tracking Indicators and Repo Position 
Maintenance fees, and once available, to Securities Lending Tracking 
Indicators and Securities Lending Position Maintenance fees.
    The Reserve Banks estimate the above price changes will result in 
an overall 17.3 percent average price decrease for Fedwire Funds 
Service customers.
    The Reserve Banks' primary risks to current projections for the 
Fedwire Securities Service include variations in technology costs and 
product volume forecasts stemming from an uncertain economic outlook.

G. FedNow Service

    1. 2022 Forecast--The Reserve Banks did not estimate FedNow Service 
recovery of total expenses and targeted ROE because it will not be 
operational until mid-2023.
    2. 2023 Pricing--The Reserve Banks will introduce a fee schedule 
for the FedNow Service that includes both per-item and fixed fees. This 
represents the initial fee schedule for the service, and the Reserve 
Banks expect that the fee schedule will change as the service matures.
    To limit prohibitively high or unnecessarily volatile prices, fees 
are based on transaction costs associated with mature volume estimates, 
inclusive of PSAF related expenses. This approach is similar to how the 
Reserve Banks have set fees for new services in the past.\41\ The 
proposed fee schedule also reflects the Federal Reserve's assessment of 
prevailing market practices among instant payments operators. 
Additionally, as described in greater detail below, the FedNow Service 
will discount certain fees to $0.00 in 2023. This approach is in 
alignment with the Board's Pricing Principles and will support the 
Board's policy objective of nationwide access to instant payments.\42\
---------------------------------------------------------------------------

    \41\ In establishing fees for the Federal Reserve's ACH service, 
the Board allowed fees to be set to recover costs associated with 
mature volume estimates instead of current costs. As part of setting 
fees following the passage of the MCA in 1980, the Federal Reserve 
published a specific year that it expected ACH to achieve annual 
cost recovery. At that time, FedACH had been in operation for more 
than a decade, giving the Federal Reserve the ability to estimate 
costs and revenues with relative confidence. Performing a similar 
exercise for the FedNow Service would not be feasible in the short 
term because of the lack of historical data. See Board of Governors 
of the Federal Reserve System, ``Adoption of Fee Schedules and 
Pricing Principles for Federal Reserve Bank Services,'' 46 FR 1338, 
1343 (Jan. 6, 1981). Available at: https://cdn.loc.gov/service/ll/fedreg/fr046/fr046003/fr046003.pdf.
    \42\ This approach is consistent with the Board's Pricing 
Principles. Specifically, in adopting principle 7, the Board 
explained that pricing flexibility may be necessary to induce 
desirable long-run changes in the payment system and to foster 
development of services that will ultimately benefit the public. See 
``Policies: The Federal Reserve in the Payments System,'' (January 
2001). Available at: Federal Reserve Board--Policies: The Federal 
Reserve in the Payments System.
---------------------------------------------------------------------------

    The Reserve Banks will introduce a per-item fee of $.045 that is 
charged to the FedNow Sender for each customer credit transfer (CCT) 
and CCT return.\43\ These fees will only be charged for messages that 
are accepted by the FedNow Receiver and settled over the service.\44\ 
CCTs up to 2,500 transactions

[[Page 79321]]

per RTN per month will be discounted to $0.00 in 2023.
---------------------------------------------------------------------------

    \43\ Operating Circular (OC) 8 defines a FedNow Sender as a 
FedNow Participant that sends a payment order through the FedNow 
Service. ``Operating Circular 8,'' (September 21, 2022). Available 
at: Operating Circular No. 8--Funds Transfers through the FedNow 
Service (frbservices.org).
    \44\ OC 8 defines a FedNow Receiver as a FedNow Participant that 
receives a payment order or Request for Confirmation through the 
FedNow Service. See ``Operating Circular 8,'' (September 21, 2022). 
Available at: Operating Circular No. 8--Funds Transfers through the 
FedNow Service (frbservices.org).
---------------------------------------------------------------------------

    The Reserve Banks will introduce a $25 monthly participation fee, 
discounted to $0.00 per month in 2023, for every routing transit number 
(RTN) enrolled in the service. The participation fee will only be 
charged to RTNs that are able to receive CCTs (Send & Receive or 
Receive-only participation types). The participation fee will not be 
charged to Liquidity Management Transfer (LMT) only and Settlement-only 
participation types in 2023.\45\
---------------------------------------------------------------------------

    \45\ For more information on FedNow participation types, see 
``FedNow features: flexible participation types,'' (April 27, 2021). 
Available at: https://www.frbservices.org/financial-services/fednow/blog/fednow-features-flexible-participation-types.html.
---------------------------------------------------------------------------

    The Reserve Banks will introduce a fee of $0.01 that is charged to 
the FedNow Participant for each request for payment (RFP) message that 
is completed or received by a financial institution with RFP receipt 
enabled.\46\ RFP messages sent to a financial institution that is not 
enabled for receipt of RFP will not be assessed the fee, since those 
messages will not be completed. The fee will be charged regardless of 
whether the RFP is answered with a CCT.
---------------------------------------------------------------------------

    \46\ A FedNow Participant that sends an RFP message can request 
either a CCT or a CCT return in response to the message.
---------------------------------------------------------------------------

    The Reserve Banks will introduce a fee of $1.00 that is charged to 
the FedNow Sender for each liquidity management transfer settled over 
the FedNow Service. Although not currently under consideration, a 
separate, fixed fee related to LMT use may introduced in the future. 
Changes to the LMT per-item fee will also be under consideration as LMT 
activity evolves. Per the 2020 Notice related to the FedNow Service, 
LMT is designed to support liquidity needs related to instant payments 
activity more broadly.\47\
---------------------------------------------------------------------------

    \47\ LMT will enable participants in the FedNow Service to 
transfer funds to one another to support liquidity needs related to 
payment activity in the FedNow Service. LMT will also support 
participants in a private-sector instant payment service backed by a 
joint account at a Reserve Bank by enabling transfers between the 
master accounts of participants and a joint account. See ``Service 
Details on Interbank Actions to Support Interbank Settlement of 
Instant Payments,'' 85 FR 48522, (August 11 2020). Available here: 
https://www.govinfo.gov/content/pkg/FR-2020-08-11/pdf/2020-17539.pdf.
---------------------------------------------------------------------------

    H. FedLine Solutions--The Reserve Banks charge fees for the 
electronic connections that financial institutions use to access priced 
services and allocate the costs and revenues associated with this 
electronic access to the priced services.\48\ There are six FedLine 
channels through which customers can access the Reserve Banks' priced 
services: FedMail[supreg], FedLine Exchange[supreg], FedLine 
Web[supreg], FedLine Advantage[supreg], FedLine Command[supreg] and 
FedLine Direct[supreg].\49\ The Reserve Banks bundle these channels 
into eleven FedLine packages, described below, that are supplemented by 
a number of premium (or [agrave] la carte) access and accounting 
information options. In addition, the Reserve Banks offer FedComplete 
packages, which are bundled offerings of FedLine connections and a 
fixed number of FedACH Services, Fedwire Funds Service, and Check 21-
enabled transactions.
---------------------------------------------------------------------------

    \48\ FedLine Solutions provide customers with access to Reserve 
Bank priced services. As such, FedLine costs and revenue are 
allocated to the Reserve Banks' priced services on an expense ratio 
basis.
    \49\ FedMail, FedLine Exchange, FedLine Web, FedLine Advantage, 
FedLine Command, and FedLine Direct are registered trademarks of the 
Federal Reserve Banks.
---------------------------------------------------------------------------

    Eight attended-access packages offer manual access to critical 
payment and information services via a web-based interface. The FedMail 
package provides access to basic information services via email, while 
the two FedLine Exchange packages are designed to provide certain 
services, such as the E-Payments Routing Directory, to customers that 
otherwise do not use FedLine for any payment services. Two FedLine Web 
packages offer online attended access to a range of services, including 
cash services, FedACH information services, and check service. Three 
FedLine Advantage packages expand upon the FedLine Web packages and 
offer attended access to critical transactional services: FedACH, 
Fedwire Funds, and Fedwire Securities. FedLine Advantage will also 
offer attended access to the FedNow Service when it is operational.
    Three unattended access packages are computer-to-computer, internet 
protocol (IP)-based interfaces. The FedLine Command package offers an 
unattended connection to FedACH, most accounting information services, 
and the FedNow Service when it is made available. The two remaining 
options are FedLine Direct packages, which allow for unattended 
connections at multiple connection speeds to Check, FedACH, Fedwire 
Funds, and Fedwire Securities transactional and information services 
and to most accounting information services. FedLine Direct packages 
will also allow for unattended connection to the FedNow Service.
    The Reserve Banks propose to increase the monthly fees for the 
FedMail Email Service from $60 to $85, and for FedMail Subscribers from 
$15 to $25. To provide an incentive for current customers to move to 
alternatives such as FedLine Web, the Reserve Banks propose to 
introduce a monthly fee assessment for the FedMail Fax Service of $200 
beginning in 2023. The Reserve Banks propose to discontinue the FedMail 
Fax Service by December 31, 2023. The FedMail Fax Service is available 
[agrave] la carte for all FedLine Solutions access packages, and 
FedMail Email Service is available [agrave] la carte only for FedLine 
Web or higher packages.\50\ The Reserve Banks seek not only to provide 
highly secure, modern access solutions, but also to enhance the 
customer experience through access to value-added services not 
available on legacy technology. Delivery of financial services 
information, such as transaction advices, accounting reports, and other 
statements over fax and email, does not align with industry best 
practices and poses potential risks to the confidentiality of customer 
information.
---------------------------------------------------------------------------

    \50\ In 2018, the Board of Governors approved a proposal to 
cease onboarding of new subscribers to the FedMail Fax Service 
effective January 1, 2019.
---------------------------------------------------------------------------

    The Reserve Banks propose to update all existing FedComplete 100 
and 200 packages. The Reserve Banks propose to increase the monthly fee 
for FedComplete Advantage Plus from $825 to $900, FedComplete 100 
Advantage Premier from $900 to $975, FedComplete 200 Advantage Plus 
from $1,350 to $1,425, and FedComplete 200 Advantage Premier from 
$1,425 to $1,500. The Reserve Banks propose to discontinue offering 
FedComplete 100 Plus and FedComplete 200 Command Plus. The proposed 
price increase aligns with the increase to the Check Monthly 
Participation fee, FedACH participation and settlement fees, and 
Fedwire Funds Service fees in alignment with fee changes in this 
notice. The Reserve Banks are discontinuing FedComplete 100 Command 
Plus and 200 Command Plus because of low demand, no new customers being 
onboarded, and a need to streamline offerings to reduce complexity of 
service and billing.
    The Reserve Banks propose to introduce a monthly fee assessment of 
$400 for legacy VPN devices to customers who have not started the 
migration by October 1, 2023. VPN devices are a key component of a 
customer's FedLine Advantage and FedLine Command connections to 
critical payment and informational services. The purpose of this 
monthly fee assessment is to support the timely

[[Page 79322]]

completion of the Next Generation Access Solution (NGAS) Virtual 
Private Network (VPN) migration. As part of the Federal Reserve Banks' 
ongoing modernization efforts, all customers are required to convert 
their VPN devices by the end of 2023.
    In addition, the Reserve Banks propose that use of a wide area 
network (WAN) connection for priced services will be associated with, 
and billed in accordance with, FedLine Direct package fees.\51\ As the 
Reserve Banks support current customers and prepare to launch new 
services, the FedLine Direct network continues to be the premier 
solution, with added resiliency, greater security, active monitoring, 
dedicated bandwidth, and consistent operational support.\52\ The 
Reserve Banks estimate the above price changes will result in a 4.0 
percent average price increase for FedLine customers.
---------------------------------------------------------------------------

    \51\ In 2019, a redesign of the FedLine Direct product offering 
was approved, introducing new package and pricing options that 
affected all FedLine Direct, Check 21 Large File Delivery, and other 
FedLine Command or FedLine Advantage customers that use a WAN 
connection.
    \52\ The Reserve Banks are preparing to deliver services to the 
industry via Application Programming Interfaces (API). APIs are a 
set of protocols for connecting software systems programmatically, 
enabling system-to-system interoperability. Communication will be 
forthcoming on timing and availability of initial APIs.
---------------------------------------------------------------------------

    Finally, for financial institutions that plan to adopt the FedNow 
Service in 2023, the Reserve Banks will discount certain FedLine fees 
to $0.00 to support testing activities and streamlined onboarding 
processes.\53\ More detail regarding discounted FedLine fees will be 
shared through existing Reserve Bank channels closer to FedNow Service 
introduction.
---------------------------------------------------------------------------

    \53\ Monthly fees for a new VPN device or WAN device to support 
FedNow Service activity will be discounted to $0.00 in 2023. Fees to 
set up a new FedLine Solution for the FedNow Service will be 
discounted to $0.00. Finally, new subscribers that the financial 
institution adds to support FedNow Service access will not 
contribute toward the fee for a FedLine Subscriber 5-Pack.
---------------------------------------------------------------------------

II. Analysis of Competitive Effect

    All operational and legal changes considered by the Board that have 
a substantial effect on payment system participants are subject to the 
competitive impact analysis described in the March 1990 policy ``The 
Federal Reserve in the Payments System.'' \54\ Under this policy, the 
Board assesses whether changes would have a direct and material adverse 
effect on the ability of other service providers to compete effectively 
with the Federal Reserve in providing similar services because of 
differing legal powers or constraints or because of a dominant market 
position deriving from such legal differences. If any proposed changes 
create such an effect, the Board must further evaluate the changes to 
assess whether the benefits associated with the changes--such as 
contributions to payment system efficiency, payment system integrity, 
or other Board objectives--can be achieved while minimizing the adverse 
effect on competition.
---------------------------------------------------------------------------

    \54\ Federal Reserve Regulatory Service (FRRS) 9-1558.
---------------------------------------------------------------------------

    The 2023 fees, fee structures, and changes in service will not have 
a direct and material adverse effect on the ability of other service 
providers to compete effectively with the Reserve Banks in providing 
similar services. The Reserve Banks expect to continue to achieve 
aggregate long-run cost recovery across all mature priced services.

III. 2023 Fee Schedules

                    FedACH Services 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices]
------------------------------------------------------------------------
                                                            Fee
------------------------------------------------------------------------
FedACH minimum monthly fee:
    Originating depository financial institution  $50.00.
     (ODFI) \55\.
    Receiving depository financial institution    $40.00.
     (RDFI) \56\.
Origination (per item or record):
    Forward or return items.....................  $0.0035.
    SameDay Service--forward item \57\..........  $0.0010 surcharge.
    Addenda record..............................  $0.0015.
    FedLine Web-originated returns and            $0.50.
     notification of change (NOC) \58\.
    Facsimile Exception Return/NOC \59\.........  $45.00.
    SameDay Exception Return....................  $45.00.
    Automated NOC...............................  $0.20.
    Volume discounts (based on monthly billed
     origination volume) \60\ per item when
     origination volume is:.
        750,001 to 1,500,000 items per month      $0.0008.
         discount.
        more than 1,500,000 items per month       $0.0010.
         discount.
    Volume discounts (based on monthly billed
     receipt volume) \61\ per item when receipt
     volume is:.
        10,000,001 to 15,000,000 items per month  $0.0002.
         discount.
        more than 15,000,000 items per month      $0.0003.
         discount.
Receipt (per item or record):
    Forward Item................................  $0.0035.
    Return Item.................................  $0.0075.
    Addenda record..............................  $0.0015.
    Volume discounts:...........................
        Non-Premium Receivers \62\ per item when
         volume is:.
            750,001 to 12,500,000 items per       $0.0017 discount.
             month \63\.
            more than 12,500,000 items per month  $0.0019 discount.
             \64\.
        Premium Receivers, Level One \65\ per
         item when volume is:.
            750,001 to 1,500,000 items per month  $0.0017 discount.
             \66\.
            1,500,001 to 2,500,000 items per      $0.0017 discount.
             month \64\.
            2,500,001 to 12,500,000 items per     $0.0018 discount.
             month \64\.
            more than 12,500,000 items per month  $0.0020 discount.
             \64\.
            more than 30,000,000 items per month  $0.0023 discount.
             \64\.
        Premium Receivers, Level Two \67\ per
         item when volume is:.
            750,001 to 1,500,000 items per month  $0.0017 discount.
             \68\.
            1,500,001 to 2,500,000 items per      $0.0017 discount.
             month \64\.
            2,500,001 to 12,500,000 items per     $0.0019 discount.
             month \64\.
            more than 12,500,000 items per month  $0.0021 discount.
             \64\.
            more than 30,000,000 items per month  $0.0024 discount.
             \64\.
------------------------------------------------------------------------


[[Page 79323]]


                    FedACH Services 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices]
------------------------------------------------------------------------
                                                            Fee
------------------------------------------------------------------------
FedACH Risk Management Services: \69\
    Monthly Package Fee (a single fee based on
     total number of criteria sets):.
        For up to 5 criteria sets...............  $45.00.
        For 6 through 11 criteria sets..........  $85.00.
        For 12 through 23 criteria sets.........  $150.00.
        For 24 through 47 criteria sets.........  $180.00.
        For 48 through 95 criteria sets.........  $300.00.
        For 96 through 191 criteria sets........  $510.00.
        For 192 through 383 criteria sets.......  $810.00.
        For 384 through 584 criteria sets.......  $1,025.00.
        For more than 584 criteria sets.........  $1,325.00.
    Batch/Item Monitoring (based on total
     monthly volume):.
        For 1 through 100,000 batches (per        $0.007.
         batch).
        For more than 100,000 batches (per        $0.0035.
         batch).
FedPayments Insights Service: \70\
    Monthly Fee (a single fee based on
     commercial receipt volume):.
        0-50,000 items per month................  $75.00.
        50,001-100,000 items per month..........  $120.00.
        100,001-500,000 items per month.........  $180.00.
        500,001-1,000,000 items per month.......  $260.00.
        1,000,001-5,000,000 items per month.....  $340.00.
        5,000,001-10,000,000 items per month....  $450.00.
        10,000,001-25,000,000 items per month...  $550.00.
        25,000,001-60,000,000 items per month...  $625.00.
        Over 60,000,000 items per month.........  $700.00.
Monthly FedPayments Reporter Service:
    FedPayments Reporter Service monthly package
     includes the following reports.
        ACH Received Entries Detail--Customer
         and Depository Financial Institution.
        ACH Return Reason Report--Customer and
         Depository Financial Institution.
        ACH Originated Entries Detail--Customer
         and Depository Financial Institution.
        ACH Volume Summary by SEC Code--Customer
        ACH Customer Transaction Activity.......
        ACH Death Notification..................
        ACH International (IAT).................
        ACH Notification of Change..............
        ACH Payment Data Information File.......
        ACH Remittance Advice Detail............
        ACH Remittance Advice Summary...........
        ACH Return Item Report and File.........
        ACH Return Ratio........................
        ACH Social Security Beneficiary.........
        ACH Originator Setup....................
        ACH Report Delivery via FedLine Solution
        On Demand Report Surcharge \71\.........  $1.00.
Monthly Package Fee (counts reflect reports
 generated as well as delivered via a FedLine
 Solution):
    For up to 50 reports........................  $45.00.
    For 51 through 150 reports..................  $65.00.
    For 151 through 500 reports.................  $120.00.
    For 501 through 1,000 reports...............  $220.00.
    For 1,001 through 1,500 reports.............  $320.00.
    For 1,501 through 2,500 reports.............  $505.00.
    For 2,501 through 3,500 reports.............  $705.00.
    For 3,501 through 4,500 reports.............  $900.00.
    For 4,501 through 5,500 reports.............  $1,095.00.
    For 5,501 through 7,000 reports.............  $1,350.00.
    For 7,001 through 8,500 reports.............  $1,585.00.
    For 8,501 through 10,000 reports............  $1,815.00.
    For more than 10,000 reports................  $1,980.00.
    Premier reports (per report generated): \71\
        ACH Volume Summary by SEC Code Report--
         Depository Financial Institution:.
            For 1 through 5 reports.............  $10.00.
            For 6 through 10 reports............  $6.00.
            For 11 or more reports..............  $1.00.
            On Demand Surcharge.................  $1.00.
        ACH Routing Number Activity Report:.....
            For 1 through 5 reports.............  $10.00.
            For 6 through 10 reports............  $6.00.
            For 11 or more reports..............  $1.00.
            On Demand Surcharge.................  $1.00.
        ACH Originated Batch Report (monthly):..
            For 1 through 5 reports.............  $10.00.
            For 6 through 10 reports............  $6.00.
            For 11 or more reports..............  $1.00.
            On Demand Surcharge.................  $1.00.
        ACH Originated Batch Report (daily):....
            Scheduled Report....................  $0.65.
            On Demand Surcharge.................  $1.00.
    On-us inclusion:............................
        Participation (monthly fee per RTN).....  $10.00.
        Per-item................................  $0.0030.

[[Page 79324]]

 
        Per-addenda.............................  $0.0015.
    Report delivery via encrypted email (per      $0.20.
     email).
Other Fees and Discounts:
    Monthly fee (per RTN):......................
        FedACH Participation Fee \72\...........  $75.00.
        Same Day Service Origination              $10.00.
         Participation Fee \73\.
    FedACH Settlement Fee \74\..................
        Premium Receivers, Level One \75\ and     $60.00.
         Level Two \76\.
        Non-Premium Receivers \77\ when volume    $100.00.
         is less than 1,500,000 items per month.
        Non-Premium Receivers \78\ when volume    $200.00.
         is more than 1,500,000 items per month.
    FedACH Information File Extract Fee.........  $180.00.
    IAT Output File Sort Fee....................  $150.00.
    Fixed Participation Fee--Automated NOCs \79\  $5.00.
    Non-Electronic Input/Output fee: \80\.......
        CD/DVD (CD or DVD)......................  $50.00.
        Paper (file or report)..................  $50.00.
    Fees and Credits Established by Nacha: \81\.
        Nacha Same Day Entry fee (per item).....  $0.052.
        Nacha Same Day Entry credit (per item)..  $0.052 (credit).
        Nacha Unauthorized Entry fee (per item).  $4.50.
        Nacha Unauthorized Entry credit (per      $4.50 (credit).
         item).
        Nacha Admin Network fee (monthly fee per  $22.00.
         RTN).
        Nacha Admin Network fee (per entry).....  $0.000185.
FedGlobal[supreg] ACH Payments: \82\
    Fixed Monthly Fee (per RTN): \83\...........
        Monthly origination volume more than 500  $185.00.
         items.
        Monthly origination volume between 161    $60.00.
         and 500 items.
        Monthly origination volume less than 161  $20.00.
         items.
    Per-item Origination Fee for Monthly Volume
     more than 500 Items (surcharge): \84\.
        Canada service..........................  $0.50.
        Mexico service..........................  $0.55.
        Panama service..........................  $0.60.
        Europe service..........................  $1.13.
    Per-item Origination Fee for Monthly Volume
     between 161 and 500 items (surcharge): \84\.
        Canada service..........................  $0.75.
        Mexico service..........................  $0.80.
        Panama service..........................  $0.85.
        Europe service..........................  $1.38.
    Per-item Origination Fee for Monthly Volume
     less than 161 items (surcharge): \84\.
        Canada service..........................  $1.00.
        Mexico service..........................  $1.05.
        Panama service..........................  $1.10.
        Europe service..........................  $1.63.
    Other FedGlobal ACH Payments Fees:..........
        Canada service:.........................
            Return received from Canada \85\....  $0.99 (surcharge).
            Trace of item at receiving gateway..  $5.50.
            Trace of item not at receiving        $7.00.
             gateway.
        Mexico service:.........................
            Return received from Mexico \85\....  $0.91 (surcharge).
            Item trace..........................  $13.50.
            Foreign currency to foreign currency  $0.67 (surcharge).
             (F3X) item originated to Mexico
             \84\.
        Panama service:.........................
            Return received from Panama \85\....  $1.00 (surcharge).
            Item trace..........................  $7.00.
            NOC.................................  $0.72.
        Europe service:.........................
            F3X item originated to Europe \84\..  $1.25 (surcharge).
            Return received from Europe \85\....  $1.35 (surcharge).
            Item trace..........................  $7.00.
Exception Resolution Service:
    Monthly Fees (applies to cases only at the
     parent RTN): \86\.
        Up to 5 cases...........................  $20.00.
        6-25 cases..............................  $40.00.
        26-50 cases.............................  $60.00.
        51-100 cases............................  $100.00.
        101-1,000 cases.........................  $250.00.
        1,001-5,000 cases.......................  $400.00.
        5,001 cases and above...................  $500.00.
    Offline Service Participant--Case Fees: \87\
        Case Open Fee...........................  $5.00.
        Case Response Fee.......................  $5.00.
------------------------------------------------------------------------


[[Page 79325]]


Fedwire Funds Service and National Settlement Service 2023 Fee Schedules
  [Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
                                                                Fee
------------------------------------------------------------------------
                          Fedwire Funds Service
------------------------------------------------------------------------
Monthly Participation Fee...............................         $100.00
Basic volume-based pre-incentive transfer fee
 (originations and receipts)--per transfer for:
    Tier 1: The first 14,000 transfers per month........           0.920
    Tier 2: Additional transfers up to 90,000 per month.           0.285
    Tier 3: Every transfer over 90,000 per month........           0.180
Volume-based transfer fee with the incentive discount
 (originations and receipts)--per eligible transfer for:
 \88\
    Tier 1: The first 14,000 transfers per month........           0.184
    Tier 2: Additional transfers 14,001 to 90,000 per              0.057
     month..............................................
    Tier 3: Every transfer over 90,000 per month........           0.036
Surcharge for Offline Transfers (Originations and                  75.00
 Receipt)...............................................
Surcharge for End-of-Day Transfer Originations \89\.....            0.26
Monthly FedPayments Manager Import/Export fee \90\......           50.00
Surcharge on transfers >$10 million Origination and                 0.14
 Receipt................................................
Surcharge on transfers >$100 million Origination and                0.36
 Receipt................................................
Surcharge for Payment Notification:
    Origination Surcharge \91\..........................            0.01
    Receipt Volume 91 92................................             N/A
Delivery of Reports--Hard Copy Reports to On-Line                  50.00
 Customers..............................................
Special Settlement Arrangements (charge per settlement            150.00
 day) \93\..............................................
------------------------------------------------------------------------
                       National Settlement Service
------------------------------------------------------------------------
Basic:
    Settlement Entry Fee................................            1.50
    Settlement File Fee.................................           30.00
Surcharge for Offline File Origination \94\.............           45.00
Minimum Monthly Fee \95\................................           60.00
------------------------------------------------------------------------


              Fedwire Securities Service 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
                                                                Fee
------------------------------------------------------------------------
Basic Transfer Fee: 96 97
    Agency Securities: Transfer or reversal originated             $0.61
     or received........................................
    Treasury Securities: Transfer or reversal originated            0.61
     or received........................................
Surcharge: \98\
    Agency Securities: Offline origination & receipt               80.00
     surcharge..........................................
    Treasury Securities: Offline origination & receipt             80.00
     surcharge..........................................
Monthly Maintenance Fees: \99\
    Agency Securities: Account maintenance (per account)           57.50
     \100\..............................................
    Agency Securities: Issue maintenance (per issue/per             0.61
     account) \101\.....................................
    Treasury Securities: Account maintenance (per                   None
     account) \102\.....................................
    Treasury Securities: Issue maintenance (per issue/              None
     per account) \103\.................................
ACAP Fees: 104 105
    Claims Adjustment Fee 106 107.......................            1.00
    Tracking Indicators Fee.............................            0.10
    Position Maintenance Fee (per position maintained/              0.03
     per business day) 108 109..........................
GNMA Serial Note Stripping or Reconstitution Fee \110\..            9.00
Joint Custody Origination Surcharge 111 112.............           46.00
Delivery of Reports--Hard Copy Reports to On-Line                  50.00
 Customers \113\........................................
------------------------------------------------------------------------


                    FedNow Service 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
                                                          Fee
------------------------------------------------------------------------
Customer Credit Transfer (per item) PACS.008   $0.045.
 Origination.
Customer Credit Transfer Returns (per item)    $0.045.
 PACS.004 Origination.
Liquidity Management Transfer (LMT) (per-      $1.00.
 item) PACS.009 Origination.
Request for Payment (RFP) (per-item) PAIN.013  $0.01.
PACS.008 Origination Discount................  -$0.045 per item for up
                                                to 2,500 customer credit
                                                transfers per month (in
                                                2023).
Participation Fee--General (per month).......  $25.00, discounted to
                                                $0.00 in 2023.
------------------------------------------------------------------------


[[Page 79326]]


                        FedLine 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
                                                          Fee
------------------------------------------------------------------------
                 FedComplete Packages (monthly) 114 115
------------------------------------------------------------------------
FedComplete 100A Plus \116\..................  $900.00.
includes:
    FedLine Advantage Plus package...........
    FedLine Subscriber--Pack of 5............
    7,500 FedForward transactions............
    46 FedForward Cash Letter items..........
    70 FedReturn transactions................
    14,000 FedReceipt transactions...........
    Check monthly participation fee..........
    35 Fedwire Funds origination transfers...
    35 Fedwire Funds receipt transfers.......
    Fedwire monthly participation fee........
    1,000 FedACH origination items...........
    FedACH monthly minimum fee--Forward
     Origination.
    7,500 FedACH receipt items...............
    FedACH monthly minimum fee--Receipt......
    10 FedACH web-originated return/NOC......
    500 FedACH addenda record originated.....
    1,000 FedACH addenda record received.....
    100 FedACH SameDay Service--Forward Item
     Originated.
    FedACH Participation Fee.................
    FedACH settlement fee....................
    FedACH SameDay Service origination
     participation fee.
FedComplete 100A Premier.....................  $975.00.
includes:
    FedLine Advantage Premier package........
    Volumes included in the FedComplete 100A
     Plus package.
FedComplete 200A Plus........................  $1,425.00.
includes:
    FedLine Advantage Plus package...........
    FedLine subscriber 5-pack................
    25,000 FedForward transactions...........
    46 FedForward Cash Letter items..........
    225 FedReturn transactions...............
    25,000 FedReceipt transactions...........
    Check monthly participation fee..........
    100 Fedwire Funds origination transfers..
    100 Fedwire Funds receipt transfers......
    Fedwire monthly participation fee........
    2,000 FedACH origination items...........
    FedACH monthly minimum fee--Forward
     Origination.
    25,000 FedACH receipt items..............
    FedACH monthly minimum fee--Receipt......
    20 FedACH web-originated return/NOC......
    750 FedACH addenda record originated.....
    1,500 FedACH addenda record received.....
    200 FedACH SameDay Service--Forward Item
     Originated.
    FedACH Participation Fee.................
    FedACH settlement fee....................
    FedACH SameDay Service origination
     participation fee.
FedComplete 200A Premier.....................  $1,500.00.
includes:
    FedLine Advantage Premier package........
    Volumes included in the FedComplete 200A
     Plus package.
FedComplete Excess Volume and Receipt
 Surcharge: \117\
    FedForward \118\.........................  $0.03700/item.
    FedReturn................................  $0.82000/item.
    FedReceipt...............................  $0.00005/item.
    Fedwire Funds Origination................  $0.88000/item.
    Fedwire Funds Receipt....................  $0.08800/item.
    FedACH Origination.......................  $0.00350/item.
    FedACH Receipt...........................  $0.00035/item.
FedComplete credit adjustment................  various.
FedComplete debit adjustment.................  various.
------------------------------------------------------------------------
                       FedLine Solutions (monthly)
------------------------------------------------------------------------
FedMail \119\................................  $85.00.
includes:

[[Page 79327]]

 
    FedMail access channel...................
    Check FedFoward, Fed Return and
     FedReceipt Services.
    Check Adjustments........................
    FedACH Download Advice and Settlement
     Information.
    Fedwire Funds Offline Advices............
    Daily Statement of Account (Text)........
    Monthly Statement of Service Charges
     (Text).
    Electronic Cash Difference Advices.......
FedLine Exchange \119\.......................  $40.00.
includes:
    E-Payments Directory (via manual
     download).
FedLine Exchange Premier 119 120.............  $125.00.
includes:
    FedLine Exchange package.................
    E-Payments Directory (via automated
     download).
FedLine Web \121\............................  $110.00.
includes:
    FedLine Web access channel...............
    Services included in the FedLine Exchange
     package.
    Check FedForward, FedReturn and
     FedReceipt Services.
    Check Adjustments........................
    FedACH Derived Returns and NOCs..........
    FedACH File, Batch and Item Detail
     Information.
    FedACH Download Advice...................
    FedACH Settlement Information............
    FedACH Customer Profile Information......
    FedACH Returns Activity Statistics.......
    FedACH Risk RDFI Alert Service...........
    FedACH Risk Returns Reporting Service....
    FedACH Exception Resolution Service......
    FedCash[supreg] Services.................
FedLine Web Plus \121\.......................  $160.00.
includes:
    Services included in the FedLine Web
     package.
    FedACH Risk Origination Monitoring
     Service.
    FedACH FedPayments Reporter Service......
    Check Large Dollar Return................
    Check FedImage Services..................
    Account Management Information (AMI).....
    Daily Statement of Account (PDF, Text)...
    Daylight Overdraft Reports...............
    Monthly Account Services (SCRD) File.....
    Monthly Statement of Service Charges
     (PDF, Text).
    E-Payments Routing Directory (via
     automated download).
FedLine Advantage \121\......................  $415.00.
includes:
    FedLine Advantage access channel.........
    One VPN device...........................
    Services included in the FedLine Web
     package.
    FedACH File Transmission To/From Federal
     Reserve.
    FedACH Request Output File Delivery......
    FedACH View File Transmission and
     Processing Status.
    Fedwire Originate and Receive Funds
     Transfer.
    Fedwire Originate and Receive Securities
     Transfer.
    National Settlement Service Services.....
    Check Large Dollar Return................
    Check FedImage Services..................
    Account Management Information with Intra-
     Day Download Search File.
    Daily Statement of Account (PDF, Text)...
    Daylight Overdraft Reports...............
    Monthly Account Services (SCRD) File.....
    Monthly Statement of Service Charges
     (PDF, Text).
FedLine Advantage Plus \121\.................  $460.00.
includes:
    Services included in the FedLine
     Advantage package.
    One VPN device...........................
    FedACH Risk Origination Monitoring
     Service.
    FedACH FedPayments Reporter Service......
    Fedwire Funds FedPayments Manager Import/
     Export (less than or equal to 250
     Fedwire transactions and one routing
     number per month).

[[Page 79328]]

 
    FedTransaction Analyzer[supreg] (less
     than 250 or equal to Fedwire
     transactions and one routing number per
     month).
    E-Payments Routing Directory (via
     automated download).
FedLine Advantage Premier \121\..............  $570.00.
Includes:
    FedLine Advantage Plus package...........
    Two VPN devices..........................
    Fedwire Funds FedPayments Manager Import/
     Export (more than 250 Fedwire
     transactions or more than one routing
     number in a given month).
    FedTransaction Analyzer (more than 250
     Fedwire transactions or more than one
     routing number per month).
FedLine Command Plus \122\...................  $1,035.00.
includes:
    FedLine Command access channel...........
    Services included in the FedLine
     Advantage Plus package.
    One VPN device...........................
    Additional FedLine Command server
     certificates.
    Fedwire Statement Services...............
    Fedwire Funds FedPayments Manager Import/
     Export (more than 250 Fedwire
     transactions or more than one routing
     number in a given month).
    FedTransaction Analyzer (more than 250
     Fedwire transactions or more than one
     routing number in a given month).
    Intra-Day File with Transaction Details
     (up to six times daily).
    Statement of Account Spreadsheet File
     (SASF).
    Financial Institution Reconcilement Data
     (FIRD) File (machine readable).
FedLine Direct Plus \123\....................  $5,500.00.
includes:
    FedLine Direct access channel............
    Services included in the FedLine Command
     Plus package.
    One VPN device...........................
    One 2 Mbps Dedicated WAN Connection......
    Additional FedLine Direct server
     certificates.
    Treasury Check Information System (TCIS).
    Dual Vendors.............................
    FedLine Direct Contingency Solution......
FedLine Direct Premier \123\.................  $10,500.00.
includes:
    Services included in the FedLine Direct
     Plus package.
    Two 2 Mbps dedicated WAN Connections.....
    One Network Diversity....................
    Two VPN devices..........................
------------------------------------------------------------------------
                   A la carte options (monthly) \124\
------------------------------------------------------------------------
Electronic Access:
    FedMail--FedLine Exchange Subscribers--    $25.00.
     Pack of 5 \125\.
    FedLine Subscribers--Pack of 5 (access to  $100.00.
     Web and Advantage).
    Additional VPNs 126 127..................  $100.00.
    Additional 2 Mbps WAN connection \123\...  $3,000.00.
    WAN Connection Upgrade...................
        10 Mbps \128\........................  $1,700.00.
        30 Mbps \128\........................  $3,000.00.
        50 Mbps \128\........................  $4,000.00.
        100 Mbps \128\.......................  $7,000.00.
        200 Mbps \128\.......................  $11,000.00.
    FedLine International Setup (one-time      $5,000.00.
     fee).
    FedLine Custom Implementation Fee (one-    various.
     time fee) \129\.
    Network Diversity........................  $2,500.00.
    FedMail Fax \130\........................  $200.00.
    FedMail Email (for customers with FedLine  $85.00.
     Web and above) \131\.
    VPN Device Modification (one-time fee)...  $200.00.
    VPN Device Missed Activation Appointment   $175.00.
     (one-time fee).
    VPN Device Expedited Hardware Surcharge    $100.00.
     (one-time fee).
    VPN Device Replacement or Move (one-time   $300.00.
     fee).
    E-Payments Automated Download (1-5 Add'l   $75.00.
     Codes) \132\.
    E-Payments Automated Download (6-20 Add'l  $150.00.
     Codes) \132\.
    E-Payments Automated Download (21-50       $300.00.
     Add'l Codes) \132\.
    E-Payments Automated Download (51-100      $500.00.
     Add'l Codes) \132\.
    E-Payments Automated Download (101-250     $1,000.00.
     Add'l Codes) \132\.
    E-Payments Automated Download (>250 Add'l  $2,000.00.
     Codes) \132\.
------------------------------------------------------------------------


[[Page 79329]]


                        FedLine 2023 Fee Schedule
  [Effective January 3, 2023. Bold indicates changes from 2022 prices.]
------------------------------------------------------------------------
                                                          Fee
------------------------------------------------------------------------
Accounting Information Services (monthly):
    Cash Management System (CMS) Plus--Own
     report--up to 12 files with \133\.
        no OSRTN, respondent/sub-account       $60.00.
         activity.
        less than 10 OSRTNs, respondents and/  $125.00.
         or sub-accounts.
        10-50 OSRTNs, respondents and/or sub-  $250.00.
         accounts.
        51-100 OSRTNs, respondents and/or sub- $500.00.
         accounts.
        101-500 OSRTNs, respondents and/or     $750.00.
         sub-accounts.
        >500 OSRTNs, respondents and/or sub-   $1,000.00.
         accounts.
    End-of-Day Financial Institution           $150.00.
     Reconcilement Data (FIRD) File \134\.
    Statement of Account Spreadsheet File      $150.00.
     (SASF) \135\.
    Intra-day Download Search Results in       $150.00.
     Spreadsheet Format (with AMI) \136\.
Other:
    Software Certification...................  $0.00 to $8,000.00.
    Vendor Pass-Through Fee..................  various.
    Electronic Access Credit Adjustment......  various.
    Electronic Access Debit Adjustment.......  various.
------------------------------------------------------------------------

     
---------------------------------------------------------------------------

    \55\ Any ODFI incurring less than $50 for the following fees 
will be charged a variable amount to reach the minimum: Forward 
value and non-value item origination fees, and FedGlobal ACH 
origination surcharges.
    \56\ Any RDFI not originating forward value and non-value items 
and incurring less than $40 in receipt fees will be charged a 
variable amount to reach the minimum. Any RDFI that originates 
forward value and non-value items incurring less than $50 in forward 
value and nonvalue item origination fees will only be charged a 
variable amount to reach the minimum monthly origination fee.
    \57\ This surcharge is assessed on all forward items that 
qualify for sameday processing and settlement and is incremental to 
the standard origination item fee.
    \58\ The fee includes the item and addenda fees in addition to 
the conversion fee.
    \59\ The fee includes the item and addenda fees in addition to 
the conversion fee. Reserve Banks also assess a $45 fee for every 
government paper return/NOC they process.
    \60\ Origination volumes at these levels qualify for a waterfall 
discount which includes all FedACH origination items.
    \61\ Origination discounts based on monthly billed receipt 
volume apply only to those items received by FedACH receiving points 
and are available only to Premium Receivers.
    \62\ RDFIs receiving through FedACH less than 90 percent of 
their FedACH-originated items.
    \63\ This per-item discount is a reduction to the standard 
receipt fees listed in this fee schedule.
    \64\ Receipt volumes at these levels qualify for a waterfall 
discount which includes all FedACH receipt items.
    \65\ RDFIs receiving through FedACH at least 90 percent of their 
FedACH-originated items, but less than 90 percent of all of their 
ACH items originated through any operator.
    \66\ This per-item discount is a reduction to the standard 
receipt fees listed in this fee schedule.
    \67\ RDFIs receiving through FedACH at least 90 percent of all 
of their ACH items originated through any operator.
    \68\ This per-item discount is a reduction to the standard 
receipt fees listed in this fee schedule.
    \69\ Criteria may be set for both the Origination Monitoring 
Service and the RDFI Alert Service. Subscribers with no criteria set 
up will be assessed the $35 monthly package fee.
    \70\ Monthly commercial receipt volume is calculated based on 
combined volume of subscribed ABAs in an account family.
    \71\ Premier reports generated on demand are subject to the 
package/tiered fees plus a surcharge.
    \72\ The fee applies to RTNs that have received or originated 
FedACH transactions during a month. Institutions that receive only 
U.S. government transactions or that elect to use a private-sector 
operator exclusively are not assessed the fee.
    \73\ This surcharge is assessed to any RTN that originates at 
least one item meeting the criteria for same-day processing and 
settlement in a given month.
    \74\ The fee is applied to any RTN with activity during a month, 
including RTNs of institutions that elect to use a private-sector 
operator exclusively but also have items routed to or from customers 
that access the ACH network through FedACH. This fee does not apply 
to RTNs that use the Reserve Banks for only U.S. government 
transactions.
    \75\ RDFIs receiving through FedACH at least 90 percent of their 
FedACH-originated items, but less than 90 percent of all of their 
ACH items originated through any operator.
    \76\ RDFIs receiving through FedACH at least 90 percent of all 
of their ACH items originated through any operator.
    \77\ RDFIs receiving through FedACH less than 90 percent of 
their FedACH-originated items.
    \78\ RDFIs receiving through FedACH less than 90 percent of 
their FedACH-originated items.
    \79\ Fee will be assessed only when automated NOCs are 
generated.
    \80\ Limited services are offered in contingency situations.
    \81\ The fees and credits listed are collected from the ODFI and 
credited to Nacha (admin network) or to the RDFI (same-day entry and 
unauthorized entry) in accordance with the ACH Rules.
    \82\ The international fees and surcharges vary from country to 
country as these are negotiated with each international gateway 
operator.
    \83\ A single monthly fee based on total FedGlobal ACH Payments 
origination volume.
    \84\ This per-item surcharge is in addition to the standard 
domestic origination fees listed in this fee schedule.
    \85\ This per-item surcharge is in addition to the standard 
domestic receipt fees listed in this fee schedule.
    \86\ The monthly fee is rolled up to the parent DI level, such 
that a DI that opts into the FedACH Exception Resolution Service 
under two separate RTNs would pay a single monthly fee based on the 
total number of cases opened for their two RTNs combined.
    \87\ A financial institution may enroll in the Service as an 
Offline Service Participant by designating the Reserve Bank to 
access and use the functionality of the application on behalf of the 
Offline Participant.
    \88\ The incentive discounts apply to the volume that exceeds 60 
percent of a customer's historic benchmark volume. Historic 
benchmark volume is based on a customer's average daily activity 
over the previous five calendar years. If a customer has fewer than 
five full calendar years of previous activity, its historic 
benchmark volume is based on its daily activity for as many full 
calendar years of data as are available. If a customer has less than 
one year of past activity, then the customer qualifies automatically 
for incentive discounts for the year. The applicable incentive 
discounts are as follows: $0.736 for transfers up to 14,000; $0.228 
for transfers 14,001 to 90,000; and $0.144 for transfers over 
90,000.
    \89\ This surcharge applies to originators of transfers that are 
processed by the Reserve Banks after 5:00 p.m. eastern time.
    \90\ This fee is charged to any Fedwire Funds participant that 
originates a transfer message via the FedPayments Manager (FPM) 
Funds tool and has the import/export processing option setting 
active at any point during the month.
    \91\ Payment Notification and End-of-Day Origination surcharges 
apply to each Fedwire funds transfer message.
    \92\ Provided on billing statement for informational purposes 
only.
    \93\ This charge is assessed to settlement arrangements that use 
the Fedwire Funds Service to affect the settlement of interbank 
obligations (as opposed to those that use the National Settlement 
Service). With respect to such special settlement arrangements, 
other charges may be assessed for each funds transfer into or out of 
the accounts used in connection with such arrangements.
    \94\ If your organization is a settlement agent, it may be able 
to use the National Settlement Service offline service if it is 
experiencing an operational event that prevents the transmission of 
settlement files via its electronic connection to the Federal 
Reserve Banks. The Federal Reserve Banks have limited capacity to 
process offline settlement files. As a result, while the Federal 
Reserve Banks use best efforts to process offline settlement file 
submissions, there is no guarantee that an offline settlement file, 
in particular one that is submitted late in the operating day or 
that contains a large number of entries, will be accepted for 
processing. Only those persons identified as authorized individuals 
on the National Settlement Service 04 Agent Contact Form may submit 
offline settlement files. For questions related to the National 
Settlement Service offline service, please contact National 
Settlement Service Central Support Service Staff (CSSS) at 800-758-
9403, or via email at [email protected].
    \95\ Any settlement arrangement that accrues less than $60 
during a calendar month will be assessed a variable amount to reach 
the minimum monthly fee.
    \96\ Restricted Securities Accounts maintained by the Reserve 
Banks under the Loans and Discounts program and the 31 CFR part 202 
program are not assessed for monthly account maintenance fees or 
fees for Transfers of Book-Entry Securities to or from such 
Restricted Securities Accounts. Restricted Securities Accounts 
maintained by the Reserve Banks under the 31 CFR part 225 program 
are subject to monthly account maintenance fees but not fees for 
Transfers of Book-Entry Securities to or from such Restricted 
Securities Accounts.
    \97\ These fees are set by the Federal Reserve Banks.
    \98\ This surcharge is set by the Federal Reserve Banks. It is 
in addition to any basic transfer or reversal fee.
    \99\ Restricted Securities Accounts maintained by the Reserve 
Banks under the Loans and Discounts program and the 31 CFR. part 202 
program are not assessed for monthly account maintenance fees or 
fees for Transfers of Book-Entry Securities to or from such 
Restricted Securities Accounts. Restricted Securities Accounts 
maintained by the Reserve Banks under the 31 CFR part 225 program 
are subject to monthly account maintenance fees but not fees for 
Transfers of Book-Entry Securities to or from such Restricted 
Securities Accounts.
    \100\ These fees are set by the Federal Reserve Banks.
    \101\ These fees are set by the Federal Reserve Banks.
    \102\ The U.S. Department of the Treasury absorbs the monthly 
account maintenance fees the Federal Reserve Banks charge to the 
extent a securities account contains only Treasury securities.
    \103\ The U.S. Department of the Treasury absorbs the monthly 
account maintenance fees the Federal Reserve Banks charge to the 
extent a securities account contains only Treasury securities.
    \104\ These fees are set by the Federal Reserve Banks.
    \105\ Automated Claim Adjustment Process (ACAP) fees apply to 
all ACAP-eligible security types. For information about ACAP's 
enhancements coming up in 2023 and their implementation dates, 
please visit this website.
    \106\ The billing code 20141, Fail Claim Adjustment Fee, will be 
sunset once Phase 1 of the ACAP's Enhancement Project goes live. For 
information about ACAP's enhancements implementation dates, please 
visit this website.
    \107\ The billing codes 20144, Fail Claim Adjustment Fee 
(Debit), and 20145, Fail Claim Adjustment Fee (Credit), will be 
introduced once Phase 1 of the ACAP's Enhancement Project goes live. 
These fees will replace the billing code 20141, Fail Claim 
Adjustment Fee. For information about ACAP's enhancements 
implementation dates, please visit this website.
    \108\ Participants are charged the Repo Position Maintenance Fee 
for both a Repo-Out balance and a Repo-In balance. These fees will 
be assessed every business day.
    \109\ Participants are charged the Securities Lending Position 
Maintenance Fee for both a Securities Borrowed balance and a 
Securities Lent balance. These fees will be assessed every business 
day.
    \110\ This fee is set by and remitted to the Government National 
Mortgage Association (GNMA).
    \111\ The Federal Reserve Banks charge participants a Joint 
Custody Origination Surcharge for both Agency and Treasury 
securities.
    \112\ These fees are set by the Federal Reserve Banks.
    \113\ These fees are set by the Federal Reserve Banks.
    \114\ FedComplete packages are all-electronic service options 
that bundle payment services with an access solution for one monthly 
fee.
    \115\ FedComplete customers that use the email service would be 
charged the FedMail Email a la carte fee and for all FedMail-FedLine 
Exchange Subscriber 5-packs.
    \116\ Packages with an ``A'' include the FedLine Advantage 
channel.
    \117\ Per-item surcharges are in addition to the standard fees 
listed in the applicable priced services fee schedules.
    \118\ FedComplete customers will be charged $4 for each 
FedForward cash letter over the monthly package threshold. This 
activity will appear under billing code 51998 in Service Area 1521 
on a month-lagged basis.
    \119\ FedMail and FedLine Exchange packages do not include user 
credentials, which are required to access priced services and 
certain informational services. Credentials are sold separately in 
packs of five via the FedMail-FedLine Exchange Subscriber 5-pack.
    \120\ Additional VPNs are available for FedLine Advantage, 
FedLine Command, and FedLine Direct packages only. All customers 
will need to replace their existing VPN device with the new VPN 
device. Effective October 1, 2023, customers who have not started 
migration will be assessed a $400 monthly fee until migration is 
complete.
    \121\ FedLine Web and Advantage packages do not include user 
credentials, which are required to access priced services and 
certain informational services. Credentials are sold separately in 
packs of five via the FedLine Subscriber 5-pack.
    \122\ FedLine Solutions package fees associated with 
establishing a new connection or upgrading a current connection to 
FedLine Advantage[supreg], FedLine Command[supreg], or FedLine 
Direct[supreg] for the FedNowSM Service will be credited back on a 
monthly basis in 2023.
    \123\ Early termination fees and/or expedited order fees may 
apply to all FedLine Direct packages and FedLine Direct a la carte 
options.
    \124\ These add-on services can be purchased only with a FedLine 
Solution.
    \125\ New FedNow\SM\ Subscribers will not contribute toward the 
FedLine Subscribers--Pack of 5 monthly fee in 2023.
    \126\ Additional VPNs are available for FedLine Advantage, 
FedLine Command, and FedLine Direct packages only. All customers 
will need to replace their existing VPN device with the new VPN 
device. Effective October 1, 2023, customers who have not started 
migration will be assessed a $400 monthly fee until migration is 
complete.
    \127\ An additional VPN or WAN device leveraged exclusively for 
the FedNow\SM\ Service will not be assessed the monthly ala carte 
fee for the device(s) in 2023. While customers may opt to add a WAN 
router of any applicable line speed for the FedNow\SM\ Service, the 
total monthly qualifying amount will be limited to $5,000 per month.
    \128\ Fee is in addition to the FedLine Direct package fees or 
additional 2Mbps WAN fees.
    \129\ The FedLine Custom Implementation Fee is $2,500 or $5,000 
based on the complexity of the setup.
    \130\ Limited to installed base only. All customers will need to 
migrate FedMail Fax services to FedMail or FedLine services, where 
applicable. Effective October 1, 2023, the price will increase to 
$400 for FedMail Fax.
    \131\ Available only to customers with a priced FedLine package.
    \132\ Five download codes are included at no cost in all Plus 
and Premier packages.
    \133\ Cash Management Service options are limited to Plus and 
Premier packages.
    \134\ The End of Day Financial Institution Reconcilement Data 
(FIRD) File option is available for FedLine Web Plus, FedLine 
Advantage Plus and Premier packages. It is available for no extra 
fee in FedLine Command Plus and Direct packages.
    \135\ The Statement of Account Spreadsheet File (SASF) option is 
available for FedLine Web Plus, FedLine Advantage Plus and Premier 
packages. It is available for no extra fee in FedLine Command Plus 
and Direct packages.
    \136\ The Intra-day Download Search Results in Spreadsheet Form 
option is available for the FedLine Web Plus package. It is 
available for no extra fee in FedLine Advantage and higher packages.


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    By order of the Board of Governors of the Federal Reserve 
System.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2022-28096 Filed 12-23-22; 8:45 am]
BILLING CODE 6210-01-P