[Federal Register Volume 65, Number 103 (Friday, May 26, 2000)]
[Notices]
[Pages 34183-34187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13207]


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FEDERAL RESERVE SYSTEM

[Docket No. R-1037]


Modifying Federal Reserve ACH Deposit Deadlines and Pricing 
Practices Relative to Private-Sector ACH Operators

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice.

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SUMMARY: Based on comments received in response to its request for 
comment last year, the Board has concluded that the Federal Reserve 
Banks' deposit deadlines and pricing practices for automated clearing 
house (ACH) transactions exchanged with private-sector ACH operators 
should be modified. The Board is considering specific modifications to 
these deadlines and pricing practices, which could be implemented as 
early as mid-2001, and requests comment on these proposed 
modifications.

DATES: Comments must be submitted on or before July 25, 2000.

ADDRESSES: Comments, which should refer to Docket No. R-1037, may be 
mailed to Ms. Jennifer J. Johnson, Secretary, Board of Governors of the 
Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551 
or mailed electronically to <a href="/cdn-cgi/l/email-protection#384a5d5f4b165b5755555d564c4b785e5d5c5d4a59544a5d4b5d4a4e5d165f574e"><span class="__cf_email__" data-cfemail="e092858793ce838f8d8d858e9493a08685848592818c92859385929685ce878f96">[email protected]</span></a>. Comments 
addressed to Ms. Johnson also may be delivered to the Board's mail room 
between 8:45 a.m. and 5:15 p.m. and to the security control room 
outside of those hours. Both the mail room and the security control 
room are accessible from the courtyard entrance on 20th Street between 
Constitution Avenue and C Street, NW. Comments may be inspected in Room 
MP-500 between 9 a.m. and 5 p.m. weekdays, pursuant to Sec. 261.12, 
except as provided in Sec. 261.14, of the Board's Rules Regarding 
Availability of Information, 12 CFR 261.12 and 261.14.

FOR FURTHER INFORMATION CONTACT: Jack K. Walton II, Manager (202/452-
2660); Michele Braun, Project Leader (202/452-2819); or Jeffrey S.H. 
Yeganeh, Senior Financial Services Analyst (202/728-5801); for the 
hearing impaired only, contact Janice Simms, Telecommunication Device 
for the Deaf (202/872-4984).

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Reserve Banks are collectively the largest ACH operator 
and process more than 80 percent of commercial interbank ACH 
transactions. Private-sector ACH operators (PSOs) process the remaining 
transactions and typically provide services, including processing and 
settling ACH transactions, similar to those offered by the Reserve 
Banks. PSOs also rely on the Reserve Banks' ACH services for the 
delivery and settlement of some transactions in which either the 
originating depository financial institution (ODFI) or receiving 
depository financial institution (RDFI) is not their customer.
    The Reserve Banks' authority to provide payment services is limited 
by law to services provided to depository institutions.\1\ The Reserve 
Banks, however, allow depository institutions to send or receive their 
ACH transactions through intermediaries, such as PSOs, and treat those 
intermediaries as agents of the depository institutions they serve. 
Nevertheless, all depository institutions are currently subject to the 
same Reserve Bank prices and service guidelines regardless of how they 
send or receive their ACH transactions to and from the Reserve Banks.
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    \1\ Reserve Banks may also provide services to a limited set of 
other institutions, such as state member banks that are not defined 
as depository institutions. Further, the Reserve Banks may provide 
services to other entities if directed to do so as fiscal agent of 
the United States.
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    Some industry representatives have expressed concerns that the 
Reserve Banks' price and service level policies have created barriers 
to open and vigorous competition among ACH operators because the 
policies do not recognize the role played by operators in the ACH 
system.\2\ Specifically, these representatives have maintained that the 
Reserve Banks' deposit deadlines and price structure do not permit the 
PSOs to compete effectively in the provision of ACH services to 
depository institutions.
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    \2\ ACH Vision 2000 Task Force Recommendations, NACHA, 1997; The 
Role of the Federal Reserve and the Banking Industry in the Retail 
Electronic Payments Systems of the Future, The Bankers Roundtable, 
April 1998.
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    The Federal Reserve Board recognizes the benefits of competition in 
the provision of payment services. In a 1990 white paper on the Federal 
Reserve in the payments system, the Board stated that ``the role of the 
Federal Reserve in providing payments services is to promote the 
integrity and efficiency of the payments mechanism and to ensure the 
provision of payment services to all depository institutions on an 
equitable basis, and to do so in an atmosphere of competitive 
fairness.'' \3\ In addition, the Board's standards for priced services 
activities note that ``Federal Reserve actions are implemented in a 
manner that ensures fairness to other providers of payment services.'' 
\4\
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    \3\ The Federal Reserve in the Payments System, Federal Reserve 
Regulatory Service 7-139.
    \4\ Standards Related to Priced-Services Activities of the 
Federal Reserve Banks, Federal Reserve Regulatory Service 7-136.
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    In response to the industry's concerns, the Board requested comment 
last year on the benefits and drawbacks of modifying the Reserve Banks' 
deposit deadlines and pricing practices for ACH transactions exchanged 
with PSOs (64 FR 27793, May 21, 1999). Specifically, the Board 
requested comment on whether the Reserve Banks should (1) modify their 
deposit deadlines and processing schedules, (2) modify their pricing 
structure for interoperator transactions, and (3) limit any 
modifications to PSOs only.

II. Summary of Comments

    The Board received fifty-eight responses to its request for 
comment.\5\ Thirty-two commenters supported and twenty-six commenters 
opposed modifications to the Reserve Banks' deposit deadlines and 
pricing practices. Those supporting modifications generally tended to 
be larger depository institutions and ACH associations that believed 
modifications would improve competition in the provision of ACH 
services. Those opposing modifications generally tended to be smaller 
or medium-sized depository institutions that believed any modifications 
would lead to higher Reserve Bank fees, which in turn would make them 
less able to compete in the market for origination services with 
institutions that use PSO ACH services. Given the diversity in the 
commenters' views, Board staff invited commenters to a meeting in 
December 1999 to discuss interoperator issues more fully and to explore 
alternative approaches to addressing these issues.\6\
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    \5\ The Board received seventeen comments from small banks and 
thrifts, fourteen comments from national and regional banks, nine 
comments from ACH associations and clearinghouses, seven comments 
from credit unions, five comments from Reserve Banks, three comments 
from private-sector operators, and three comments from consultants, 
law firms, and corporate associations.
    \6\ This summary of comments reflects commenters' formal 
responses to the request for comment as well as the views expressed 
at the December 1999 meeting.
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A. Deposit Deadlines

    The Board requested comment on the benefits and drawbacks of the 
Reserve

[[Page 34184]]

Banks establishing different deposit and delivery deadlines for PSOs 
and depository institutions. PSOs maintain that they are unable to 
offer competitive deposit deadlines and delivery schedules to their 
customers because they are subject to the same deposit deadlines and 
delivery schedules that Reserve Banks offer to depository institutions.
    Commenters suggested a number of solutions to address this issue. 
One suggestion was that the Reserve Banks could offer PSOs later 
deposit and earlier delivery deadlines to enable PSOs, in turn, to 
offer competitive deadlines to their customers. Another potential 
solution was for the industry to adopt a uniform interoperator deposit 
deadline at which all operators would deposit transactions with one 
another. Other commenters, however, advocated the status quo because 
they did not believe that Reserve Bank deadlines place PSOs at a 
competitive disadvantage.

B. Pricing Structure

    The Board also requested comment on the benefits and drawbacks of 
the Reserve Banks modifying their pricing structure for interoperator 
transactions. PSOs maintain that the Reserve Banks' current pricing 
structure has placed them at a competitive disadvantage. Specifically, 
the main concern regarding the Reserve Banks' current pricing structure 
is the asymmetry in the ability of operators to charge each other's 
customers. The Reserve Banks consider both the ODFI and RDFI in an 
interoperator transaction to be their customers and charge both 
accordingly. PSOs, on the other hand, can only charge their own 
customer in an interoperator transaction. Some commenters also 
expressed concern about the Reserve Banks' ability to charge monthly 
account servicing fees to all depository institutions, including those 
that send or receive all their ACH transactions through PSOs.
    Some commenters suggested that the Reserve Banks should modify 
their pricing structure for interoperator transactions such that they 
assess fees only to their direct customers. Commenters also suggested 
that the Reserve Banks should abolish the monthly account servicing fee 
for depository institutions that send and receive all of their ACH 
transactions through a PSO. Commenters believed that these suggested 
modifications would eliminate the asymmetry noted earlier and would 
result in a similar customer pricing structure for Reserve Banks and 
PSOs in which each operator would charge its direct customer only. 
Other commenters were concerned that any modifications to the Reserve 
Banks' pricing structure could result in an increase in fees to Reserve 
Bank customers that do not use the services of a PSO and, thus, opposed 
any change to the current pricing structure.

C. Eligibility

    The Board also requested comment on whether any modifications to 
the Reserve Banks' deadlines and pricing structure should be limited to 
ACH operators or extended to other intermediaries, such as third-party 
processors and correspondents. Specifically, because many of the 
characteristics that distinguish ACH operators from other 
intermediaries do not affect how Reserve Banks provide ACH services, 
the Board was interested whether all intermediaries should be eligible 
for modified deadlines and pricing. Further, the Board requested 
comment on whether the Reserve Banks should rely on the National 
Automated Clearing House Association's (NACHA) ACH operator definition 
if they were to limit modifications to ACH operators.
    Some commenters suggested that only ACH operators should be 
eligible for modified deadlines and pricing. These commenters noted 
that Reserve Banks compete with ACH operators in the provision of ACH 
operator services and, thus, only ACH operators should be eligible for 
any modifications. These commenters also stated that the Reserve Banks 
should use NACHA's ACH operator definition to determine eligibility for 
modified deadlines and pricing rather than develop their own 
definition. Other commenters, however, suggested that if the Reserve 
Banks' ACH processing is not affected by the type of intermediary from 
which they receive transactions or to which they deliver transactions, 
then all intermediaries should be eligible for modified deadlines and 
pricing.

III. Enhancing Competition

    The Board has carefully considered the commenters' views and has 
concluded that the Reserve Banks' deposit deadlines and pricing 
structure for ACH transactions exchanged with private-sector ACH 
operators should be modified. The Board believes that adopting certain 
deadline and pricing modifications for interoperator transactions would 
enhance competition in the provision of ACH operator services to 
depository institutions.
    To determine what modifications might be appropriate to enhance 
competition in the market for ACH operator services, the Reserve Banks 
examined the types of services PSOs receive from the Reserve Banks when 
they send transactions to depository institutions through the Reserve 
Banks. Similarly, the Reserve Banks examined the types of services they 
receive from PSOs when they send transactions to depository 
institutions through PSOs.
    First, an operator provides other operators' customers with access 
to depository institutions on its network. Each of these networks 
essentially is comprised of telecommunications links that permit the 
transmission of ACH files between participating depository institutions 
and the operator. While each operator's network might employ different 
technologies with different levels of complexity, the costs associated 
with these networks are primarily fixed. For interoperator 
transactions, the ability to access depository institutions on other 
networks allows an operator (1) to forego the costs associated with 
establishing a direct connection to all depository institutions and (2) 
to provide its own customers with the ability to send ACH transactions 
to any depository institution. Thus, when an operator provides other 
operators' customers with access to a depository institution on its 
network, it provides value to those customers and the operators that 
serve them.
    Second, an operator processes transactions it receives from other 
operators and delivers those transactions to depository institutions on 
its network. Processing ACH transactions requires computing and other 
resources, which have both fixed and variable components. Therefore, it 
is reasonable for an operator to charge transaction fees to recover the 
costs associated with processing ACH transactions.
    Third, the Reserve Banks provide settlement for all ACH 
transactions they process, including interoperator transactions. Other 
operators do not settle interoperator transactions that are processed 
by the Reserve Banks. As a result, the Reserve Banks incur accounting, 
computing, and other costs when they settle ACH interoperator 
transactions for depository institutions that use PSOs. Thus, the 
Reserve Banks are providing a service not provided by other operators 
when they settle interoperator transactions they process.
    The Board has concluded that competition in the provision of ACH 
operator services would be enhanced through modifications to the 
deposit deadlines and delivery schedules for interoperator transactions 
and the adoption of a new pricing structure for these transactions. 
Specifically, the

[[Page 34185]]

Board believes that deposit deadlines for interoperator transactions 
should enable Reserve Banks and PSOs to establish competitive deposit 
deadlines and delivery schedules for their customers. The Board also 
believes that the Reserve Banks should adopt a price structure for 
interoperator transactions that is consistent with the cost structure 
associated with processing interoperator transactions. This new price 
structure should include a fee to access depository institutions on the 
Reserve Banks' ACH network, a fee to process interoperator 
transactions, and a settlement fee to recover the Reserve Banks' 
settlement costs. The Board believes that these changes, along with the 
ability of PSOs to assess interoperator fees to Reserve Banks, should 
enhance competition in the provision of ACH operator services to 
depository institutions.

IV. Proposed Modifications

    The Board has developed a specific proposal to modify the Reserve 
Banks' deadlines and pricing structure for ACH interoperator 
transactions that it believes will promote competition in the provision 
of ACH services and address the concerns raised by some commenters. The 
Board is requesting comment on this proposal.
    The Board proposes the following deadlines and pricing structure 
for ACH interoperator transactions that are processed by the Reserve 
Banks:
    <bullet> Deposit deadlines: The Board proposes that the Reserve 
Banks work collaboratively with ACH operators to establish 
interoperator deposit deadlines by which the Reserve Banks and the PSOs 
would exchange interoperator transactions.
    <bullet> Pricing structure: The Board proposes the following price 
structure for interoperator transactions processed by the Reserve 
Banks.

--First, the Reserve Banks would charge ACH operators a monthly network 
access fee for each routing number they access on the Reserve Banks' 
ACH network.
--Second, the Reserve Banks would charge ACH operators per-item fees 
for transactions they send through the Reserve Banks' ACH network.
--Third, the Reserve Banks would charge depository institutions that 
send and receive all their transactions through PSOs a monthly 
settlement fee rather than the current monthly account servicing fee.
--Fourth, the Reserve Banks would pay PSOs for transactions they send 
to depository institutions through those PSOs.

    <bullet> Eligibility: The Board proposes to limit the modified 
deadlines and pricing structure to intermediaries that are defined as 
ACH operators in the NACHA rules.

A. Deposit Deadlines

    The Board proposes that the Reserve Banks work collaboratively with 
ACH operators to establish interoperator deposit deadlines by which the 
Reserve Banks and the PSOs would exchange interoperator transactions. 
The Reserve Banks' preliminary recommendation is that one interoperator 
deposit deadline be established at 2:30 p.m. eastern time for immediate 
settlement items and that another interoperator deposit deadline for 
next-day settlement items be established at 3:00 a.m. eastern time.\7\ 
The Reserve Banks would accept interoperator transactions from PSOs and 
send interoperator transactions to PSOs at the new deposit deadlines. 
Clearly, ACH operators, including the Reserve Banks, would need to 
establish their own deposit and delivery deadlines for their customers. 
Further, the PSOs could establish other deadlines by which they would 
exchange interoperator transactions among themselves.
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    \7\ Immediate settlement items are items that are settled on the 
same banking day as they are received while next-day settlement 
items are items that are settled on the banking day after they are 
received. The Reserve Banks' banking day for the receipt of ACH 
items is from 3:00 a.m. eastern time to 2:59 a.m. eastern time on 
the next calendar day. Only returns and National Association of 
Check Safekeeping items are eligible for immediate settlement.
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    If the Reserve Banks' preliminary recommendation for interoperator 
deposit deadlines were adopted, the Reserve Banks would require their 
customers to deposit next-day settlement items half an hour earlier 
than they do today. The Reserve Banks, however, currently receive 
almost all their ACH volume well before the deposit deadlines and 
deadline extensions have become much less frequent. The recommended 
deposit deadlines would require no change in deposit times for Reserve 
Bank customers depositing immediate settlement items. As a result, the 
recommended exchange deadlines would likely have minimal effects on the 
processing schedules of Reserve Bank customers. Further, because 
Reserve Banks would deposit transactions with PSOs at the interoperator 
deposit deadlines, PSOs should be able to offer their customers deposit 
and delivery deadlines that are competitive with those offered by the 
Reserve Banks. Thus, the Board's general proposal for interoperator 
deposit deadlines, as well as the specific Reserve Bank deposit 
deadline recommendation, would likely enhance competition with minimal 
effect on depository institutions.
    Interoperator deposit deadlines, however, pose problems for 
transactions that involve three operators. Currently, a small fraction 
of the volume that PSOs deposit with the Reserve Banks is destined to 
other PSOs, which results in some transactions being processed by three 
operators.\8\ With interoperator deposit deadlines, however, if an 
operator receives a transaction from another operator at the 
interoperator deposit deadline that is destined to a third operator, 
the middle operator would be unable to forward the transaction timely 
because the deadline to deposit transactions with the third operator 
would have already passed. Moreover, three-operator transactions tend 
to be inefficient because they result in redundant processing by 
multiple operators before they are delivered to the RDFI.
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    \8\ The Board understands that some depository institutions that 
use a PSO prefer to minimize the number of settlements they receive 
for their ACH transactions. Most of these institutions already 
receive and reconcile two settlements  one from their PSO, another 
from the Reserve Banks  and do not want to receive a third 
settlement for ACH transactions that PSOs exchange directly using 
the Private ACH Exchange (PAX) system. Thus, PSOs use the Reserve 
Banks to send some transactions destined to other PSOs, which 
minimizes settlements but results in three-operator transactions.
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    One way to address this issue is for NACHA to prohibit three-
operator transactions. The Board suggests that NACHA evaluate whether 
its ACH operator definition should be revisited to require operators to 
exchange interoperator transactions directly with the operator serving 
the RDFI. In any case, to ensure that the Reserve Banks are able to 
forward the transactions to the RDFI's PSO by the interoperator deposit 
deadline, the Board proposes that the Reserve Banks require all ACH 
transactions that need to be forwarded to another operator, including 
transactions deposited by a PSO, be deposited by the Reserve Banks' 
regular customer deposit deadline.

B. Pricing Structure for Interoperator Transactions

    The Board proposes a new three-tiered pricing structure for 
interoperator transactions processed by the Reserve Banks. Under the 
proposed structure, the Reserve Banks would charge PSOs and their 
customers fees (1) to access the Reserve Banks' ACH network, (2) to 
process interoperator transactions they receive from PSOs, and (3) to 
settle

[[Page 34186]]

interoperator transactions for depository institutions that send and 
receive all their transactions through a PSO. The Reserve Banks plan to 
maintain the current fee structure for their customers and do not 
anticipate any increases in fees resulting from this proposal.
    In developing a pricing structure for interoperator transactions, 
the Reserve Banks used a cost-based approach to set fees. In their 
analysis, the Reserve Banks attempted to identify costs related to 
network access, processing, and settlement and to price those 
components separately. Further, the Reserve Banks excluded certain 
costs that might not be incurred when services are provided to ACH 
operators so that the interoperator fee structure would reflect, as 
closely as possible, the cost structure for interoperator transactions.
    Specifically, the Board proposes the following fee structure for 
interoperator transactions. The price ranges outlined below are based 
on preliminary cost analyses by the Reserve Banks. First, the Reserve 
Banks would charge the PSOs a monthly network access fee of between $5 
and $10 for each routing number to which they send transactions on the 
Reserve Banks' ACH network. Second, the Reserve Banks would charge PSOs 
a per-item fee of between $0.002 and $0.004 to process interoperator 
transactions sent to RDFIs on the Reserve Banks' ACH network. And 
third, rather than the current monthly account servicing fee, the 
Reserve Banks would charge depository institutions that send and 
receive all their transactions through PSOs a monthly settlement fee 
per routing number (projected to be about $20) to settle interoperator 
transactions.\9\
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    \9\ The Reserve Banks would no longer provide customer service 
to depository institutions for transactions they send or receive 
through a PSO. These institutions would have to direct transaction 
and service-related inquiries to their PSOs. The Reserve Banks, 
however, would continue to provide customer service on settlement-
related questions.
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    An important additional feature of the Board's overall proposal is 
that the Reserve Banks would pay PSOs for commercial and government ACH 
transactions they deliver to RDFIs through PSOs. These fees would 
compensate the PSOs for the services they provide to Reserve Banks by 
delivering transactions to RDFIs on their networks.
    An open issue that remains unresolved is how fees that PSOs would 
charge Reserve Banks would be restrained. The Board examined 
alternative approaches to restrain fees charged by operators. First, 
the Board considered limiting the interoperator fees Reserve Banks 
would pay to PSOs to the PSOs' published fees. In practice, however, 
because a PSO's published customer fee structure may be different from 
its interoperator fee structure and because not all operators publish 
fees or charge all of their customers their published fees, it would be 
difficult to ascertain whether the interoperator fees charged by an 
operator are reasonable. Alternatively, the Board considered allowing 
the Reserve Banks to pay PSOs the same fees they charge PSOs. This 
mechanism, while creating parity, would require PSOs to adopt the 
Reserve Banks' pricing structure, which may not be reflective of the 
PSOs' cost structures. The Board believes that the continued growth of 
the ACH network would be enhanced by maintaining low, cost-based 
interoperator fees. Thus, the Board requests comment on how the fees 
that operators charge each other might be restrained to encourage the 
continued growth of the ACH network.

C. Eligibility

    The Board proposes that the deadline and price structure 
modifications be limited to any intermediary that is defined as an 
operator under NACHA rules.\10\ The role of operators in the ACH system 
is separate and distinct from the role of other ACH intermediaries. 
Generally, ACH operators play a significant role in protecting the 
integrity of the overall ACH network and ensuring the interoperability 
and efficiency of the overall network. From a service perspective, the 
primary distinction between ACH operators and other intermediaries is 
that operators provide clearing, delivery, and settlement services for 
intraoperator transactions and exchange interoperator transactions with 
other operators. Third-party processors typically do not provide 
settlement services for transactions they process while correspondent 
banks typically do not provide the comprehensive clearing and delivery 
services provided by operators. Thus, the Reserve Banks tend to compete 
with PSOs, and not third-party processors or correspondent banks, in 
providing services to depository institutions. Further, because NACHA's 
operator definition does not preclude other entities from becoming new 
operators, it is possible that some of the larger correspondents or 
third-party processors might become operators to compete with the 
established operators.
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    \10\ NACHA recently adopted modifications to its definition of 
an ACH operator (NACHA Operating Rules, section 13.1.1). To qualify 
as a private-sector ACH operator, an entity must execute an 
agreement with NACHA to comply with or perform all of the following: 
adhere to NACHA operating rules and other applicable laws and 
regulations; execute agreements with a minimum of twenty independent 
depository institutions that bind the depository institutions NACHA 
operating rules and the private-sector ACH operator's rules; provide 
clearing, delivery, and settlement services for intraoperator 
transactions; exchange interoperator transactions with other ACH 
operators; process and edit files based on the requirements of NACHA 
operating rules; evaluate the creditworthiness of and apply risk 
control measures to their customers; adhere to the Federal Reserve's 
Policy Statement on Privately Operated Multilateral Settlement 
Systems; and adhere to any NACHA performance standards for ACH 
operators. Under this definition, Electronic Payments Network, Visa, 
and American Clearing House are considered to be private-sector ACH 
operators. The Reserve Banks reserve the right to preempt any NACHA 
rule in their ACH operating circular. Thus, the Reserve Banks 
reserve the right to establish their own operator definition should 
they object to any future modifications to NACHA's definition of an 
ACH operator.
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V. Competitive Impact

    The Board must conduct a competitive impact analysis when it 
considers a major operational change such as that being proposed for 
interoperator transactions.\11\ Specifically, the Board must determine 
whether the proposed deadlines and pricing structure 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, and if so, whether the adverse effect on competition is due 
to differing legal powers or constraints, or due to a dominant market 
position deriving from such legal differences.
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    \11\ Federal Reserve Regulatory Service, 7-145.2.
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    The purpose of the proposed modifications is to address the 
concerns expressed by commenters with respect to the Reserve Banks' 
current deposit deadlines and pricing practices. The proposed 
modifications will enhance the ability of PSOs to compete with the 
Reserve Banks in providing ACH operator services to depository 
institutions. Further, depository institutions and other intermediaries 
should also benefit as they are likely to see a more competitive market 
for the provision of ACH operator services, which could result in lower 
costs to process their ACH transactions. Thus, the Board does not 
anticipate any adverse effects on competition resulting from this 
proposal.

VI. Conclusion

    The Board requests comment on the proposed modifications. 
Specifically, the Board is interested in commenters' views on whether 
the proposed modifications enhance competition in the market for ACH 
operator services. Further, the Board requests comment on how the fees 
that operators charge each

[[Page 34187]]

other might be restrained to encourage the continued growth of the ACH 
network.

    By order of the Board of Governors of the Federal Reserve 
System, May 22, 2000.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 00-13207 Filed 5-25-00; 8:45 am]
BILLING CODE 6210-01-P


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