Federal Reserve System Guidelines for the Provision of Financial Services

The following guidelines are a further elaboration of the pricing principles announced previously by the Board. These guidelines have been adopted by the Board to clarify, to the extent possible at this time, the System’s objectives in an environment of priced Federal Reserve services. Adherence to these guidelines will help ensure reasonable uniformity across the System in the provision of financial services, while maintaining sufficient flexibility for Reserve Bank adjustments as the pricing environment evolves.

1. The Federal Reserve System will maintain an operational presence in the payments mechanism where, as a result of cost advantages, that presence will contribute to economic efficiency, or where other public interest considerations require.

2. Initially, the System will continue to provide the range of major services it offers currently. However, the System should be prepared to remove itself from the provision of those services that can be supplied more efficiently by the private sector, unless there are overriding public interest considerations for maintenance of an operational presence by the System.

3. The Reserve Banks will maintain the flexibility to modify existing services or to offer new services, as appropriate, to meet the specialized and changing needs of financial institutions and the public.

4. In the provision of financial services, the System will ascertain the needs of depository institutions and the public so that the Federal Reserve can enhance its ability to offer useful, cost-effective, and complete packages of financial services to its customers, while recognizing the statutory requirement that revenues must cover costs.

5. The Federal Reserve System will continue to encourage innovation across the range of financial services.

6. The Reserve Banks will undertake efforts to provide depository institutions with full information about the nature and scope of financial services offered, including the prices, benefits, and operating requirements of those services. The character of these efforts should be consistent with the System’s responsibility to serve the public interest.