9-1576
The Monetary Control Act of 1980 requires
that “over the long run, fees shall be established on the basis of
all direct and indirect costs actually incurred. . . .” Consequently,
the Board has established the policy that Reserve Bank fees for Federal
Reserve services will be established in order to generate sufficient
revenue to cover the anticipated costs of providing services to depository
institutions for the calendar year, rather than to offset prior years’
surpluses and shortfalls.
The Board believes that this policy better advances the
Federal Reserve’s objective of promoting efficiency in the payment
mechanism than does the alternative approach of accumulating surpluses
and shortfalls. If, for example, the Federal Reserve were to establish
a lower price to compensate for a previous year’s surplus, inefficiencies
could result, as below-cost pricing might lead to services’ being
produced by the Federal Reserve at a higher societal cost than if
they had been produced by other service providers. In addition, the
short-term fluctuations in Federal Reserve fees that could result
from compensating for previous years’ surpluses or shortfalls could
be disruptive to the Federal Reserve, other providers of payment services,
and users of such services. Moreover, other providers of payment services
do not typically establish prices in order to eliminate surpluses
or shortfalls incurred in prior years. Finally, if the Federal Reserve
seeks to match costs and revenues each year, any surpluses or shortfalls
incurred should be reduced, if not eliminated, over time.
Accordingly, the Board has determined
that it is appropriate to continue the current policy of establishing
Reserve Bank fees for Federal Reserve services in order to generate
sufficient revenue to cover the anticipated costs of providing services
to depository institutions for the calendar year, rather than to offset
prior years’ surpluses and shortfalls. 1985 Fed. Res. Bull. 30.
