Issued 1984
9-1569
BACKGROUNDSince 1913,
the Federal Reserve has performed a dual role as both an operator
in and a regulator of the nation’s payment mechanism. Over the last
70 years—and as recently as 1980—Congress has reaffirmed this role
of the Federal Reserve. The Monetary Control Act of 1980 (MCA) has
expanded the Federal Reserve’s role by requiring the Federal Reserve
to provide its services to all depository institutions on an equitable
basis, taking into account the need to ensure an adequate level of
services nationwide.
The Federal Reserve has exercised care to avoid actual
or apparent conflict between its role as a provider of services and
its role as a regulator, supervisor, and lender. Further, the Federal
Reserve is careful to ensure that its actions promote the integrity
and efficiency of the payment mechanism. As an extension of this,
the Federal Reserve exercises care to ensure that it provides payment
services to all depository institutions on an equitable and impartial
basis. Federal Reserve actions are also implemented in a manner that
ensures fairness to other providers of payment services. Moreover,
there are in place external and internal safeguards that ensure that
these objectives are achieved. Externally, the safeguards include
congressional oversight, directly and through the General Accounting
Office, and statutory controls. An additional level of external review
is provided by the public through the opportunity to comment on all
significant Board proposals. The internal safeguards include oversight
by the Board of Governors and Reserve Bank boards of directors through
various means, including use of the Board examiners and Reserve Bank
internal auditors. Finally, the Federal Reserve itself imposes restrictions
upon the conduct of its employees—restrictions intended to avoid even
the appearance of impropriety.
To ensure further that its public interest role is paramount
in providing priced services under the MCA, the following additional
standards have been adopted.
