Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65937 

1The ten-year recovery rate is based on the pro 

forma income statement for Federal Reserve priced 

services published in the Board’s Annual Report. 

Effective December 31, 2006, the Reserve Banks 

implemented Statement of Financial Accounting 

Standards (SFAS) No. 158: Employers’ Accounting 

for Defined Benefit Pension and Other 

Postretirement Plans [Accounting Standards 

Codification (ASC) 715 Compensation—Retirement 

Benefits], which resulted in recognizing a 

cumulative reduction in equity related to the priced 

services’ benefit plans. Including this cumulative 

reduction in equity from 2006 to 2013 results in 

cost recovery of 95.9 percent for the ten-year period. 

This measure of long-run cost recovery is also 

published in the Board’s Annual Report. 

DATES: Effective on November 6, 2014. 

FOR FURTHER INFORMATION CONTACT: Lisa 

Boyd, Executive Director, Federal Mine 

Safety and Health Review Commission, 

(202) 434–9910. 

SUPPLEMENTARY INFORMATION: This 

Notice announces the appointment of 

the following primary and alternate 

members to the Federal Mine Safety and 

Health Review Commission PRB: 

Primary Members 

Cynthia Z. Springer, Deputy 

Commissioner, Accounting and 

Shared Services, Bureau of the Fiscal 

Service 

Matthew J. Miller, Acting Assistant 

Commissioner, Governmentwide 

Accounting, Bureau of the Fiscal 

Service 

D. Michael Linder, Deputy Assistant 

Commissioner, Fiscal Accounting, 

Bureau of the Fiscal Service 

Douglas Anderson, Assistant 

Commissioner, Office of Shared 

Services, Bureau of the Fiscal Service 

Donald Keith Rake, Deputy Assistant 

Commissioner, Office of Shared 

Services, Bureau of the Fiscal Service 

Alternate Members 

None. 

Authority: 5 U.S.C. 4313(c)(4) 

Lisa M. Boyd, 

Executive Director, Federal Mine Safety and 

Health Review Commission. 

[FR Doc. 2014–26416 Filed 11–5–14; 8:45 am] 

BILLING CODE 6735–01–P 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1500] 

Federal Reserve Bank Services 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Notice. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (Board) has 

approved the private sector adjustment 

factor (PSAF) for 2015 of $18.0 million 

and the 2015 fee schedules for Federal 

Reserve priced services and electronic 

access. These actions were taken in 

accordance with the requirements of the 

Monetary Control Act of 1980, which 

requires that, over the long run, fees for 

Federal Reserve priced services be 

established on the basis of all direct and 

indirect costs, including the PSAF. 

DATES: The new fee schedules become 

effective January 2, 2015. 

FOR FURTHER INFORMATION CONTACT: For 

questions regarding the fee schedules: 

Susan V. Foley, Associate Director, 

(202) 452–3596; Samantha J. Pelosi, 

Manager, Retail Payments, (202/530– 

6292); Linda S. Healey, Senior Financial 

Services Analyst, (202) 452–5274, 

Division of Reserve Bank Operations 

and Payment Systems. For questions 

regarding the PSAF: Gregory L. Evans, 

Deputy Associate Director, (202) 452– 

3945; Brenda L. Haase, Manager, 

Financial Accounting, (202) 452–2753; 

or Manuel Garcia, Senior Financial 

Analyst, (202) 452–3480), Division of 

Reserve Bank Operations and Payment 

Systems. For users of 

Telecommunications Device for the Deaf 

(TDD) only, please call (202) 263–4869. 

Copies of the 2015 fee schedules for the 

check service are available from the 

Board, the Federal Reserve Banks, or the 

Reserve Banks’ financial services Web 

site at www.frbservices.org. 

SUPPLEMENTARY INFORMATION: 

I. Private Sector Adjustment Factor, 

Priced Services Cost Recovery, and 

Overview of 2015 Price Changes 

A. Overview—Each year, as required 

by the Monetary Control Act of 1980, 

the Reserve Banks set fees for priced 

services provided to depository 

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 business firm 

provided the services. The imputed 

costs and imputed profit are collectively 

referred to as the PSAF. From 2004 

through 2013, the Reserve Banks 

recovered 102.0 percent of their total 

expenses (including imputed costs) and 

targeted after-tax profits or return on 

equity (ROE) for providing priced 

services.1

Table 1 summarizes 2013 actual, 2014 

estimated, and 2015 budgeted costrecovery rates for all priced services. 

Cost recovery is estimated to be 100.8 

percent in 2014 and budgeted to be 

101.9 percent in 2015. 

TABLE 1—AGGREGATE PRICED SERVICES PRO FORMA COST AND REVENUE PERFORMANCE a

[Dollars in millions] 

YEAR 1 b

Revenue 

2 c

Total expense 

3 

Net income 

(ROE) [1¥2] 

4 d

Targeted ROE 

5 e

Recovery rate 

after targeted 

ROE [1/(2+4)] 

2013 (actual) ........................................................................ 441.3 409.3 32.0 4.2 106.7% 

2014 (estimate) .................................................................... 429.0 419.9 9.1 5.5 100.8 

2015 (budget) ....................................................................... 414.4 401.0 13.4 5.6 101.9 

a Calculations in this table and subsequent pro forma cost and revenue tables may be affected by rounding. 

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). cThe calculation of total expense includes operating, imputed, and other expenses. Imputed and other expenses include taxes, FDIC insurance, 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 FAS 158 [ASC 715] are also included. dTargeted ROE is the after-tax ROE included in the PSAF. 

eThe recovery rates in this and subsequent tables do not reflect the unamortized gains or losses that must be recognized in accordance with 

FAS 158 [ASC 715]. Future gains or losses, and their effect on cost recovery, cannot be projected. 

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65938 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

2The Reserve Banks have been engaged in a 

multiyear technology initiative to modernize the 

FedACH processing platform by migrating the 

service from a mainframe system to a distributed 

computing environment. In late 2013, the Reserve 

Banks conducted an assessment focused on the 

viability and cost-effectiveness of the program. As 

a result, the Reserve Banks in 2014 suspended the 

program and began to investigate the use of other 

technology solutions. 

3All times are stated in the Eastern Time Zone 

(ET). 

4 Depository institutions may deposit image cash 

letters using nine deposit options within the 

FedForward product line; the options vary in price 

structure and funds availability. A current list of 

FedForward deposit options can be found at http:// 

frbservices.org/servicefees/check_services_

2014.html. 5The Reserve Banks announced the new deadline 

in October, effective January 2, 2015, to provide 

both collecting banks and paying banks sufficient 

time to modify their processes to deposit and 

receive items at 12:00 noon and 2:00 p.m., 

respectively. The announcement can be found at 

http://www.frbservices.org/files/communications/

pdf/check/100314_updated_new_fedforward_

deposit_deadline.pdf. 

Table 2 provides an overview of costrecovery performance for the ten-year 

period from 2004 to 2013, 2013 actual, 

2014 budget, 2014 estimate, and 2015 

budget by priced service. 

TABLE 2—PRICED SERVICES COST RECOVERY

[Percent] 

Priced service 2004–2013 2013 Actual 2014 Budget a 2014 Estimate 2015 Budget b

All services ........................................................................... 102.0 106.7 102.3 100.8 101.9 

Check ................................................................................... 102.0 115.4 108.8 114.2 105.4 

FedACH ............................................................................... 102.1 101.2 99.2 86.5 100.0 

Fedwire Funds and NSS ..................................................... 101.5 98.6 98.0 101.3 100.8 

Fedwire Securities ............................................................... 102.2 105.0 98.0 100.1 96.5 

aThe 2014 budget figures reflect the final budgets as approved by the Board in December 2013. 

bThe 2015 budget figures reflect preliminary budget information from the Reserve Bank. The Reserve Banks will submit final budget data to 

the Board in November 2014, for Board consideration in December 2014. 

1. 2014 Estimated Performance—The 

Reserve Banks estimate that they will 

recover 100.8 percent of the costs of 

providing priced services in 2014, 

including total expense and targeted 

ROE of $5.5 million, compared with a 

budgeted recovery rate of 102.3 percent, 

as shown in table 2. Overall, the Reserve 

Banks estimate that they will fully 

recover actual and imputed costs and 

earn net income of $9.1 million, 

compared with budgeted net income of 

$15.0 million. Although the check 

service, the Fedwire® Funds and 

National Settlement Services, and the 

Fedwire Securities Service are expected 

to achieve full cost recovery, the 

FedACH® Service is expected to recover 

86.5 percent of its costs because of a 

$31.6 million charge related to its 

investment associated with a multiyear 

technology initiative to modernize its 

processing platform.2 Greater-thanexpected check volume processed by 

the Reserve Banks has been the single 

most significant factor influencing 

priced services cost recovery. 

2. 2015 Private Sector Adjustment 

Factor—The 2015 PSAF for Reserve 

Bank priced services is $18.0 million. 

This amount represents a decrease of 

$5.4 million from the 2014 PSAF of 

$23.4 million. This decrease is primarily 

the result of a reduction in the assets to 

be financed on the imputed pricedservices balance sheet and an associated 

decline in the cost of debt and equity. 

3. 2015 Projected Performance—The 

Reserve Banks project a priced services 

cost-recovery rate of 101.9 percent in 

2015, with net income of $13.4 million, 

compared to a targeted ROE of $5.6 

million. The Reserve Banks project that 

the check service, the FedACH Service, 

and the Fedwire Funds and National 

Settlement Service will fully recover 

their costs; however, the Reserve Banks 

project that the Fedwire Securities 

Service will not achieve full-cost 

recovery because of investment costs 

associated with multiyear technology 

initiatives to modernize its processing 

platform. These investments are 

expected to enhance efficiency, the 

overall quality of operations, and the 

Reserve Banks’ ability to offer additional 

services to depository institutions. 

The primary risks to the Reserve 

Banks’ ability to achieve their targeted 

cost recovery rates are unanticipated 

volume and revenue reductions and the 

potential for cost overruns with the 

technology modernization initiatives. In 

light of these risks, the Reserve Banks 

will continue to refine their business 

and operational strategies to manage 

aggressively operating costs, to increase 

product revenue, and to leverage 

efficiencies gained from technology 

initiatives. 

4. 2015 Pricing—The following 

summarizes the Reserve Banks’ changes 

in fee schedules for priced services in 

2015: 

Check 

• In October, the Reserve Banks 

announced a 12:00 noon ET deadline 

(but not the associated fee schedules) for 

the FedForward® product line, 

specifically, Mixed, Select Mixed, and 

Premium Mixed D products, which will 

provide the Reserve Banks an 

opportunity to present forward items to 

paying banks one day earlier.345

• In conjunction with the noon 

deadline, the Reserve Banks will reduce 

the per-item fees for tiers 1, 2, 3, and 4 

within the current Mixed deposit 

option. For the Select Mixed option, the 

Reserve Banks will increase the per-item 

fees for non-eligible items from $0.10 to 

$0.35 and to implement a $25 image 

cash letter (ICL) surcharge. For the 

Premium Mixed D option, the Reserve 

Banks will charge per-item fees $0.002 

higher than the per-item fees at the 

current 1:00 a.m. deadline (with the 

exception of the substitute check fee, 

which will be $0.20 higher) and a $25 

ICL surcharge. 

• The Reserve Banks will introduce 

two new deposit options to the 

FedForward Premium Mixed ICL 

products and to expand the list of 

eligible endpoints to the Select Mixed 

ICL products. 

• The Reserve Banks will increase the 

FedForward Deferred Mixed ICL 

product per-item fees at the 5:00 a.m. 

and 10:00 a.m. deadlines by $0.002 and 

$0.004, respectively. The Reserve Banks 

will increase the FedForward Deferred 

Fine Sort ICL product per-item fees at 

the 5:00 a.m. and 10:00 a.m. deadlines 

by $0.001 and $0.002, respectively. The 

Reserve Banks hope to encourage 

depositors to shift volume from the 

deferred availability product to one of 

the immediate-availability options at 

12:00 noon. 

FedACH 

• The Reserve Banks will modify the 

FedACH Minimum Origination Fee 

calculation to include fees associated 

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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65939 

6The FedACH Risk Management Services 

includes FedACH Risk Origination Monitoring 

Service, FedACH Risk RDFI Alert Service, and 

FedACH Risk Returns Reporting Service. For more 

information, refer to http://frbservices.org/files/

serviceofferings/pdf/FedACHRiskServices.pdf. 7The monthly fee is charged to any Fedwire 

Funds participant that originates a Fedwire Funds 

transfer message via the FedPayments Manager 

(FPM) Funds tool and has the import/export 

processing option setting active at any point during 

the month. 8The per-item pre-incentive fee is the fee that the 

Reserve Banks charge for transfers that do not 

qualify for incentive discounts. The Tier 1 per-item 

pre-incentive fee applies to the first 14,000 

transfers, the Tier 2 per-item pre-incentive fee 

applies to the next 76,000 transfers, and the Tier 3 

per-item pre-incentive fee applies to any additional 

transfers. The Reserve Banks apply an 80 percent 

incentive discount to every transfer over 60 percent 

of a customer’s historic benchmark volume. 

9Effective February 1, 2015. Price will increase to 

$5,000 on May 1, 2015 and $7,500 on September 

1, 2015. 

10All customers, regardless of their chosen 

electronic access channel, are responsible for the 

purchase and installation of each VPN device. 

with SameDay and FedGlobal®

origination transactions in the 

computation. 

• The Reserve Banks will reduce the 

volume tier thresholds for the FedACH 

Risk Management Services from 500,000 

to 100,000 items monitored per month.6

Fedwire Funds and National Settlement 

• The Reserve Banks will reduce the 

per-item fee on all transfers that exceed 

$10 million (high-value transfer 

surcharge) from $0.15 to $0.14. The 

Reserve Banks will increase the monthly 

fee for the usage of the FedPayments®

Manager import/export tool from $45 to 

$50. In addition, the Reserve Banks will 

increase the surcharge for offline 

transactions from $45 to $50.7

• The Reserve Banks will increase the 

Tier 1 per-item pre-incentive fee from 

$0.69 to $0.73 per transaction, increase 

the Tier 3 per-item pre-incentive fee 

from $0.14 to $0.15, and leave Tier 2 

per-item pre-incentive fees unchanged.8

Fedwire Securities 

• The Reserve Banks will increase the 

online transfer fee from $0.54 to $0.65. 

• The Reserve Banks will increase the 

monthly account maintenance fee from 

$40 to $48 per account, and increase the 

monthly issue maintenance fee from 

$0.54 to $0.65 per issue. 

• The Reserve Banks will increase the 

Joint Custody origination surcharge 

from $40 to $44. 

FedLine® Access Solutions 

• The Reserve Banks will increase the 

fees on legacy services, such as an 

additional $10 per month for FedMail®

Fax and $300 per month for FedLine 

Direct® (56K). The Reserve Banks also 

will raise the monthly fee for the 56K 

additional dedicated electronic access 

connection by $400 and to introduce a 

legacy device VPN surcharge of $2,500 

per month.9

• The Reserve Banks will add a new 

package called FedLine Advantage®

Premier to the FedLine packaged 

solutions that will be priced at $500 per 

month with FedTransaction Analyzer 

and a secondary VPN device.10

• The Reserve Banks will introduce 

two new tiers to the FedComplete®

package solutions called FedComplete 

100 Premier, priced at $850 per month, 

and FedComplete 200 Premier, priced at 

$1,375 per month, with FedLine 

Advantage Premier included. 

• The Reserve Banks will change the 

name of the FedMail Email package to 

FedLine Exchange; there is no change to 

the published fee. 

5. 2015 Price Index—Figure 1 

compares indexes of fees for the Reserve 

Banks’ priced services with the GDP 

price index starting in 2005, which is 

the first full year the Reserve Banks 

offered Check 21 services. The price 

index for Reserve Bank priced services 

is projected to increase approximately 1 

percent in 2015 from the 2014 level. The 

price index for Check 21 services is 

projected to decrease approximately 3 

percent. The price index for the 

FedACH Service is projected to decrease 

nearly 1 percent. The price index for the 

Fedwire Funds and National Settlement 

Services is projected to increase 

approximately 5 percent. The price 

index for the Fedwire Securities 

Services is projected to increase 

approximately 15 percent. For the 

period 2005 to 2014, the price index for 

total priced services is expected to 

decrease 32 percent. In comparison, for 

the period 2005 to 2013, the GDP price 

index increased 16 percent. 

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65940 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

11 Data for U.S. publicly traded firms is from the 

Standard and Poor’s Compustat® database. This 

database contains information on more than 6,000 

U.S. publicly traded firms, which approximates the 

entirety of the U.S. market. 

12The 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. 

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 commercialentity financial statements apply to the 

relevant elements in the priced services 

pro forma financial statements. 

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

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 pre-tax 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 


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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65941 

13The FDIC rule, which was adopted as final on 

April 8, 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. Since 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 https://www.fdic.gov/news/board/ 

2014/2014-04-08_notice_dis_c_fr.pdf. 

14This requirement, which becomes effective on 

December 31, 2015, does not apply to the Fedwire 

Securities Service. There are no competitors to the 

Fedwire Securities Service that will face such a 

requirement, and imposing such a requirement 

when pricing securities services could artificially 

increase the cost of these services. 

15 2015 budget pro forma as of October 8, 2014 

based on initial transmission data. 

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 riskweighted 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. 

Application of the Payment System 

Risk (PSR) Policy to the Fedwire 

Services. The Board recently approved 

revisions to the PSR policy to reflect the 

new international standards for 

financial market infrastructures (FMIs) 

developed by the Committee on 

Payment and Settlement Systems and 

the Technical Committee of the 

International Organization of Securities 

Commissions in the Principles for 

Financial Market Infrastructures. The 

revised policy retains the expectation 

that the Fedwire Services will 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 

Services do 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. In order to foster competition 

with private-sector FMIs, however, the 

Reserve Banks’ priced services will hold 

six months of the Fedwire Funds 

Service’s current operating expenses as 

liquid net financial assets and equity on 

the pro forma balance sheet.14 Current 

operating expenses are defined as 

normal business operating expenses on 

the income statement less depreciation, 

amortization, taxes, and interest on 

debt. The Fedwire Funds Service’s six 

months of operating expenses are 

computed based on its 2015 budget at 

$47.7 million.15 The revised PSR policy 

requirement is met in 2015 by the 

investments and equity imputed to the 

priced services balance sheet; therefore, 

there is no need to impute additional 

assets or equity. 

Effective tax rate. As with 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 5 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 

A2/P2) and the annual Merrill Lynch 

Corporate & High Yield Index rate, 

respectively. 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 decrease in the 2015 PSAF is 

primarily due to lower financing costs 

as a result of fewer priced services 

assets to be financed than in 2014. Debt 

and equity financing rates declined and 

less debt and equity was imputed to 

fund priced services assets. 

Projected 2015 Federal Reserve 

priced-services assets, reflected in table 

3, have decreased $107.3 million from 

2014, which is primarily the result of a 

decline in the deferred tax asset. As 

shown in table 3, the amount of longterm debt for the 2015 PSAF is $81.9 

million, a decline of $37.4 million from 

$119.3 million in 2014. Imputed equity 

for 2015 is $71.9 million, a decrease of 

approximately $10.4 million from the 

equity imputed for 2014. In accordance 

with FAS 158 [ASC 715], this amount 

includes an accumulated other 

comprehensive loss of $523.7 million. 

Table 4 reflects the portion of shortand long-term assets that must be 

financed with actual or imputed 

liabilities and equity. Debt and equity 

imputed to fund the 2015 priced 

services assets within the observed 

market leverage ratio produced an 

equity level that did not meet the FDIC 

minimum equity requirements. As a 

result, additional equity was imputed to 

meet the FDIC requirements and 

imputed long-term debt was reduced. 

The ratio of capital to risk-weighted 

assets meets the required 10 percent of 

risk-weighted assets and equity exceeds 

5 percent of total assets (table 6). In 

2014, long-term debt and equity was 

imputed to meet the asset funding 

requirements and reflects the leverage 

ratio observed in the market; no 

additional equity was required (table 5). 

Table 5 shows the derivation of the 

2015 and 2014 PSAF. Financing costs 

for 2015 are $4.3 million lower than in 

2014. In addition to the decline in the 

levels of debt and equity mentioned 

above, the long-term debt and cost of 

equity declined 9 basis points and 5 

basis points, respectively. The reduced 

equity balance and the lower cost of 

equity result in a pre-tax ROE that is 

$1.4 million lower than the 2014 pre-tax 

ROE. Imputed sales taxes declined to 

$3.3 million in 2015 from $3.5 million 

in 2014. The priced services portion of 

the Board’s expenses decreased $0.8 

million to $3.3 million in 2015 from 

$4.1 million in 2014. The effective 

income tax rate used in 2015 decreased 

to 22.4 percent from 37.2 percent in 

2014. 

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65942 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

16Credit 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 prior to providing 

credit to the depositing bank. Float is directly 

estimated at the service level. 17Consistent with the Federal Reserve Policy on 

Payment System Risk, the Reserve Banks’ priced 

services will hold 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 operating expenses is $47.7 million. As 

this requirement takes effect on the last day of the 

year, the minimum liquid financial assets and 

equity requirement is $0.1 million ($47.7 million/ 

365). The investments and equity imputed to the 

priced services balance sheet of $600 million and 

$71.9 million, respectively, are greater than the 

liquid financial assets and equity required; 

therefore no additional imputation is necessary. 

18 Includes the allocation of Board of Governors 

assets to priced services of $0.7 and $0.6 million 

for 2015 and 2014, respectively. 

19 Includes the allocation of Board of Governors 

liabilities to priced services of $0.6 million and $0.6 

million for 2015 and 2014, respectively. 

20 Includes an accumulated other comprehensive 

loss of $523.7 million for 2015 and $497.5 million 

for 2014, which reflects the ongoing amortization of 

the accumulated loss in accordance with FAS 158 

[ASC 715]. Future gains or losses, and their effects 

on the pro forma balance sheet, cannot be projected. 

See table 5 for calculation of required imputed 

equity amount. 

TABLE 3—COMPARISON OF PRO FORMA BALANCE SHEETS FOR BUDGETED FEDERAL RESERVE PRICED SERVICES

[Millions of dollars—projected average for year] 

2015 2014 Change 

Short-term assets: 

Receivables .......................................................................................................................... 34.5 35.8 (1.3) 

Materials and supplies .......................................................................................................... 0.6 0.7 (0.1) 

Prepaid expenses ................................................................................................................. 11.0 11.1 (0.1) 

Items in process of collection 16 .................................................................................................. 151.0 200.0 (49.0) 

Total short-term assets ................................................................................................. 197.2 247.7 (50.5) 

Imputed investments 17 ................................................................................................................ $600.0 $600.0 $0.0 

Long-term assets: 

Premises 18 ........................................................................................................................... $116.2 $123.6 $(7.4) 

Furniture and equipment ...................................................................................................... 39.9 37.6 2.3 

Leasehold improvements and long-term prepayments ........................................................ 91.5 103.3 (11.7) 

Net pension asset ................................................................................................................. 79.6 39.3 40.2 

Deferred tax asset ................................................................................................................ 222.8 303.1 (80.2) 

Total long-term assets ................................................................................................... 550.0 606.8 (56.8) 

Total assets ............................................................................................................ $1,347.2 $1,454.5 $(107.3) 

Short-term liabilities: 

Deferred credit items ............................................................................................................ $751.0 $800.0 $(49.0) 

Short-term debt ..................................................................................................................... 18.5 22.2 (3.6) 

Short-term payables ............................................................................................................. 27.6 25.5 2.1 

Total short-term liabilities .............................................................................................. 797.2 847.7 (50.5) 

Long-term liabilities: 

Long-term debt ..................................................................................................................... $81.9 $119.3 $(37.4) 

Postemployment/postretirement benefits and net pension liabilities 19 ................................ 396.3 405.2 (8.9) 

Total liabilities ................................................................................................................ $1,275.3 $1,372.2 $(96.9) 

Equity 17 20 .................................................................................................................................... $71.9 $82.3 $(10.4) 

Total liabilities and equity ....................................................................................... $1,347.2 $1,454.5 $(107.3) 

TABLE 4—IMPUTED FUNDING FOR PRICED-SERVICES ASSETS

[Millions of dollars] 

2015 2014 

A. Short-term asset financing 

Short-term assets to be financed.

Receivables ............................................................................................................................................... $34.5 $35.8 

Materials and supplies .............................................................................................................................. 0.6 0.7 

Prepaid expenses ...................................................................................................................................... 11.0 11.1 

Total short-term assets to be financed ............................................................................................................ $46.2 $47.7 

Short-term payables .................................................................................................................................. 27.6 25.5 

Net short-term assets to be financed ........................................................................................................... $18.5 $22.2 

Imputed short-term debt financing 21 ................................................................................................. $18.5 $22.2 

B. Long-term asset financing 

Long-term assets to be financed.

Premises .................................................................................................................................................... $116.2 $123.6 

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21See table 5 for calculation. 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 2014, the 

amount of imputed equity was based on the 

minimum equity requirements for risk-weighted 

assets, or 10%. 

23 Imputed short-term debt and long-term debt are 

computed at table 4. 

24The 2015 ROE is equal to a risk-free rate plus 

a risk premium (beta * market risk premium). The 

2015 after-tax CAPM ROE is calculated as 0.03% + 

(1.0 * 7.83%) = 7.86%. Using a tax rate of 22.4%, 

the after-tax ROE is converted into a pretax ROE, 

which results in a pretax ROE of (7.86%/(1 ¥ 

22.4%)) = 10.1%. Calculations may be affected by 

rounding. 

TABLE 4—IMPUTED FUNDING FOR PRICED-SERVICES ASSETS—Continued 

[Millions of dollars] 

2015 2014 

Furniture and equipment ........................................................................................................................... 39.9 37.6 

Leasehold improvements and long-term prepayments ............................................................................. 91.5 103.3 

Net pension asset ..................................................................................................................................... 79.6 39.3 

Deferred tax asset ..................................................................................................................................... 222.8 303.1 

Total long-term assets to be financed .............................................................................................................. $550.0 $606.8 

Postemployment/postretirement benefits and net pension liabilities ........................................................ 396.3 405.2 

Net long-term assets to be financed ......................................................................................................... $153.8 $201.6 

Imputed long-term debt 21 ........................................................................................................................................ $81.9 $119.3 

Imputed equity 21 ..................................................................................................................................................... 71.9 82.3 

Total long-term financing ................................................................................................................... $153.8 $201.6 

TABLE 5—DERIVATION OF THE 2015 AND 2014 PSAF 

[Dollars in millions] 

2015 2014 

Debt Equity Debt Equity 

A. Imputed long-term debt and equity: 

Net long-term assets to finance ....................................................... $153.8 ................ $153.8 $201.6 ................ $201.6 

Capital structure observed in market ............................................... 58.2% ................ 41.8% 59.2% ................ 40.8% 

Pre-adjusted long-term debt and equity ........................................... $89.5 ................ $64.3 $119.3 ................ $82.3 

Equity adjustments offset by: 22

Imputed long-term debt ............................................................. (7.6) ................ 7.6 — ................ — 

Imputed investments ................................................................. — ................ — — ................ — 

$81.9 ................ $71.9 $119.3 ................ $82.3 

B. Cost of capital: 

Elements of capital costs.

Short-term debt 23 ...................................................................... $18.5 × 0.2% = $0.0 $22.2 × 0.2% = $0.0 

Long-term debt 23 ...................................................................... 81.9 × 5.0% = 4.1 119.3 × 5.9% = 7.0 

Equity 24 ..................................................................................... 71.9 × 10.1% = 7.3 82.3 × 10.6% = 8.7 

................ ................ $11.4 ................ ................ $15.8 

C. Other required PSAF costs: 

Sales taxes ....................................................................................... ................ $3.3 ................ ................ $3.5 

Board of Governors expenses .......................................................... ................ 3.3 ................ ................ 4.1 

................ ................ 6.6 ................ ................ 7.6 

................ ................ $18.0 ................ ................ $23.4 

D. Total PSAF: 

As a percent of assets ...................................................................... ................ ................ 1.3% ................ ................ 1.6% 

As a percent of expenses ................................................................. ................ ................ 4.5% ................ ................ 5.6% 

E. Tax rates ............................................................................................. ................ ................ 22.4% ................ ................ 37.2% 

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25 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. 

26The investments are imputed based on the 

amounts arising from the collection of items prior 

to providing credit according to established 

availability schedules. 

27The greater-than-expected check volume is 

attributed to continued enhancements of two 

strategic FedForward product offerings, specifically 

select mixed and premium mixed. 

28Operating costs are expected to be $2.1 million 

lower than the original 2014 budget due to 

operational efficiencies in check processing as well 

as lower than budgeted information technology 

costs. Pension costs are also projected to be $3.5 

million under the original budget. 

29Total Reserve Bank forward check volumes are 

expected to drop from roughly 6.0 billion in 2013 

to 5.7 billion in 2014. Total Reserve Bank return 

check volumes are expected to drop from roughly 

42.1 million in 2013 to 36.6 million in 2014. 

TABLE 6—COMPUTATION OF 2015 CAPITAL ADEQUACY FOR FEDERAL RESERVE PRICED SERVICES

[Dollars in millions] 

Assets Risk weight Weighted 

assets 

Imputed investments: 

3-month Treasury bills 25 ...................................................................................................... $— ........................ $— 

Federal funds 26 .................................................................................................................... 600.0 0.2 120.0 

Total imputed investments ............................................................................................ 600.0 

Receivables ................................................................................................................................. $34.5 0.2 $6.9 

Materials and supplies ................................................................................................................. 0.6 1.0 0.6 

Prepaid expenses ........................................................................................................................ 11.0 1.0 11.0 

Items in process of collection ...................................................................................................... 151.0 0.2 30.2 

Premises ...................................................................................................................................... 116.2 1.0 116.2 

Furniture and equipment ............................................................................................................. 39.9 1.0 39.9 

Leasehold improvements and long-term prepayments ............................................................... 91.5 1.0 91.5 

Pension asset .............................................................................................................................. 79.6 1.0 79.6 

Deferred tax asset ....................................................................................................................... 222.8 1.0 222.8 

Total ....................................................................................................................... $1,347.2 ........................ $718.8 

Imputed equity ............................................................................................................................. ........................ ........................ $71.9 

Capital to risk-weighted assets .................................................................................................... 10.0% 

Capital to total assets .................................................................................................................. 5.3% 

C. Check Service—Table 7 shows the 

2013 actual, 2014 estimated, and 2015 

budgeted cost-recovery performance for 

the commercial check service. 

TABLE 7—CHECK SERVICE PRO FORMA COST AND REVENUE PERFORMANCE

[Dollars in millions] 

Year Revenue Total expense Net income 

(ROE) [1¥2] Targeted ROE 

Recovery rate 

after targeted 

ROE [1/(2+4)] 

% 

1 2 3 4 5 

2013 (actual) ........................................................................ 198.9 170.7 28.2 1.7 115.4 

2014 (estimate) .................................................................... 172.5 149.1 23.4 1.9 114.2 

2015 (budget) ....................................................................... 151.8 142.0 9.8 2.0 105.4 

1. 2014 Estimate—The Reserve Banks 

estimate that the check service will 

recover 114.2 percent of total expenses 

and targeted ROE, compared with a 

2014 budgeted recovery rate of 108.8 

percent. Greater-than-expected check 

volumes processed by the Reserve 

Banks and lower-than-expected costs 

have influenced significantly the check 

services cost recovery.27 28

The decline in Reserve Bank check 

volume, which is attributable to the 

decline in the number of checks written 

generally, was not as great as 

anticipated. Through September, total 

forward check volume is 4.5 percent 

lower and total return check volume is 

12.4 percent lower than for the same 

period last year. For full-year 2014, the 

Reserve Banks estimate that their total 

forward check volume will decline 5.1 

percent (compared to a budgeted 

decline of nearly 9 percent) and their 

total return check volume will decline 

13.0 percent (compared to a budgeted 

decline of about 14 percent) from 2013 

levels.29

2. 2015 Pricing—The Reserve Banks 

project that the check service will 

recover 105.4 percent of total expenses 

and targeted ROE in 2015. The Reserve 

Banks project revenue to be $151.8 

million, a decline of 12 percent from 

2014. This decline is driven largely by 

projected reductions in both forward 

check and return check volume. The 

Reserve Banks estimate that total 

Reserve Bank forward check volumes 

will decline nearly 7 percent to 5.3 

billion and return check volumes will 

decline approximately 14 percent to 

31.3 million in 2015. Total expenses for 

the check service are projected to be 

$142.0 million, a decline of nearly 5 

percent from 2014. The reduction in 

check costs is driven primarily by the 

cost savings associated with the 

implementation of a more efficient 

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30The Reserve Banks completed a multi-year 

check platform modernization initiative in October 

2012. 31 Depository institutions deposit image cash 

letters using nine deposit options within the 

FedForward product line, which vary in price 

structure and funds availability. A current list of 

FedForward deposit options can be found at http:// 

frbservices.org/servicefees/check_services_

2014.html. 32The Reserve Banks announced the deadline in 

October, effective January 2, 2015, to provide both 

collecting banks and paying banks enough time to 

modify their processes to deposit and receive items 

at 12:00 noon and 2:00 p.m., respectively. The 

announcement can be found at http://

www.frbservices.org/files/communications/pdf/

check/100314_updated_new_fedforward_deposit_

deadline.pdf. 33The Mixed product option allows customers to 

send forward collection items in a mixed cash letter 

at various deadlines for a lower cash letter fee and 

higher electronic per-item fee. 34The Select Mixed product option allows 

customers to send forward collection items drawn 

on specific endpoints in a separate cash letter, 

which combines a high fixed fee with a lower peritem variable fee. All eligible items in the cash letter 

receive immediate availability and qualify for the 

special pricing while ineligible items receive 

deferred availability of the next business day and 

pay a higher per-item fee. A current list of Select 

Mixed endpoints can be found at http://

www.frbservices.org/servicefees/check21_endpoint_

listing.html. 

35The Premium Mixed product option allow 

customers to send forward collection items within 

a specific number of mixed cash letters for a daily 

fixed fee and a lower per-item fee. A surcharge, or 

overage fee, is charged for each cash letter 

deposited over the published threshold. Premium 

Mixed depositors are not eligible to use Fine Sort 

and Deferred Fine Sort products. 

check processing platform and the full 

decommissioning of the legacy 

platform.30

The Reserve Banks announced in 

October a 12:00 noon deadline (but not 

the associated fees) for three deposit 

options within the current FedForward 

product line, specifically, Mixed, 

Premium Mixed D, and Select Mixed 

products, to provide an opportunity for 

the bank of first deposit to present 

forward items to paying banks one day 

earlier.31 32 For the Mixed deposit 

option, the Reserve Banks will reduce 

the per-item fees for tiers 1, 2, 3, and 4 

from the current 10:00 a.m. deposition 

option, as seen in table 8.33 For the 

Select Mixed option, the Reserve Banks 

will increase the per-item fees for noneligible items from $0.10 to $0.35 and to 

implement a $25 ICL surcharge.34 For 

the Premium Mixed D option, the 

Reserve Banks will charge per-item fees 

$0.002 higher than the per-item fees at 

the current 1:00 a.m. deadline (with the 

exception of the substitute check fee, 

which will be $0.20 higher) and a $25 

ICL surcharge.35

TABLE 8 

FedForward Mixed Image Cash Letter a b

Deadline ........................................................................................................................... 9:00 p.m. 1:00 a.m. 5:00 a.m. 12:00 p.m. 

Cash letter fee ................................................................................................................. $3.50 $4.50 $6.50 $6.50 

Tier 1 ........................................................................................................................ 0.0080 0.0230 0.0500 0.0700 

Tier 2 ........................................................................................................................ 0.0200 0.0330 0.0800 0.1000 

Tier 3 ........................................................................................................................ 0.0300 0.0500 0.2000 0.2200 

Tier 4 ........................................................................................................................ 0.0400 0.0600 0.2500 0.2700 

Substitute check e ..................................................................................................... 0.1500 0.1500 0.3000 0.3500 

FedForward Premium Mixed D Image Cash Letter a b

Deadline ........................................................................................................................... 1:00 a.m. 12:00 p.m. 

Cash letter fee d ............................................................................................................... $500.00 $500.00 

Cash letter surcharge c .................................................................................................... .......................................... 25.00 

Tier 1 ........................................................................................................................ 0.0040 0.0060 

Tier 2 ........................................................................................................................ 0.0170 0.0190 

Tier 3 ........................................................................................................................ 0.0280 0.0300 

Tier 4 ........................................................................................................................ 0.0390 0.0410 

Substitute check e ..................................................................................................... 0.1500 0.3500 

FedForward Select Mixed Image Cash Letter a b

Deadline ........................................................................................................................... 5:00 a.m. 12:00 p.m. 

Level 1 Level 2 Level 1 Level 2 

Daily fixed fee .................................................................................................................. $2,200.00 $900.00 $2,200.00 $900.00 

Cash letter surcharge c .................................................................................................... .................... .................... 25.00 25.00 

Tier 1 ................................................................................................................................ 0.0020 0.0020 0.0020 0.0020 

Tier 2 ................................................................................................................................ 0.0040 0.0060 0.0040 0.0060 

Tier 3 ................................................................................................................................ 0.0060 0.0080 0.0060 0.0080 

Non-eligible endpoints ..................................................................................................... 0.1000 0.1000 0.3500 0.3500 

aAll deadlines are Monday through Friday. 

bA current list of FedForward endpoint tier listings can be found at http://www.frbservices.org/servicefees/check21_endpoint_listing.html. cThe surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the daily fixed fee. 

d Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee for each additional cash letter. The maximum number of cash letters per day for the Premium Mixed D product is 35. eThe Reserve Bank’s Check 21 service fees include separate and substantially different fees for the delivery of checks to electronic endpoints 

versus paper substitute check endpoints. 

The Reserve Banks will introduce two 

new deposit options to the FedForward 

Premium Mixed ICL products, Premium 

Mixed E and F, as seen in table 9. 

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65946 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

36The Reserve Banks have been engaged in a 

multiyear technology initiative to modernize the 

FedACH processing platform by migrating the 

service from a mainframe system to a distributed 

computing environment. In late 2013, the Reserve 

Banks conducted an assessment focused on the 

viability and cost-effectiveness of the program. As 

a result, the Reserve Banks in 2014 suspended the 

program and began to investigate the use of other 

technology solutions. 

37Each Originating Depository Financial 

Institution (ODFI) is charged a minimum of $35 per 

month in forward value and non-value item 

origination fees. The fees associated with domestic 

FedACH, SameDay, and FedGlobal originations are 

collectively subject to the minimum fee. 

TABLE 9—FEDFORWARD PREMIUM MIXED IMAGE CASH LETTER A B

Deadline 

Premium Mixed Ec Premium Mixed F c

5:00 a.m. 12:00 p.m. 5:00 a.m. 12:00 p.m. 

Daily fixed fee d ................................................................................................ $325.00 $325.00 $650.00 $650.00

Cash letter surcharge e .................................................................................... ........................ 25.00 ........................ 25.00 

Tier 1 ................................................................................................................ 0.0040 0.0060 0.0040 0.0060 

Tier 2 ................................................................................................................ 0.0170 0.0190 0.0170 0.0190 

Tier 3 ................................................................................................................ 0.0280 0.0300 0.0280 0.0300 

Tier 4 ................................................................................................................ 0.0390 0.0410 0.0390 0.0410 

Substitute Checks f ........................................................................................... 0.3000 0.3500 0.3000 0.3500 

aAll deadlines are Monday through Friday. 

bA current list of FedForward endpoint tier listings can be found at http://www.frbservices.org/servicefees/check21_endpoint_listing.html. cPremium Mixed E and Premium Mixed F products are not eligible to use Fine Sort or Deferred Fine Sort products. 

d Depositors who send more than the allowed maximum number of files will be charged a $35.00 file overage fee for each additional cash letter. The maximum number of cash letters per day for Premium Mixed E and Premium Mixed F is 30 and 60, respectively. eThe surcharge will apply to each cash letter received between 5:00 a.m. and 12:00 p.m., in addition to the daily fixed fee. 

fThe Reserve Bank’s Check 21 service fees include separate and substantially different fees for the delivery of checks to electronic endpoints 

versus paper substitute check endpoints. 

The Reserve Banks will increase the 

FedForward Deferred Mixed ICL 

product per-item fees at the 5:00 a.m. 

and 10:00 a.m. deadlines by $0.002 and 

$0.004, respectively. They also will 

increase the FedForward Deferred Fine 

Sort ICL product per-item fees at the 

5:00 a.m. and 10:00 a.m. deadlines by 

$0.001 and $0.002, respectively. The 

Reserve Banks hope to encourage 

depositors to shift volume from the 

deferred-availability product to one of 

the immediate-availability options at 

12:00 noon. The Reserve Banks estimate 

that the price changes will result in an 

approximate 0.5 percent average price 

decrease for check customers. 

Risks to the Reserve Banks’ ability to 

achieve budgeted 2015 cost recovery for 

the check service include greater-thanexpected check volume losses due to 

reductions in check writing overall and 

competition from correspondent banks, 

aggregators, and direct exchanges, 

which would result in lower-thananticipated revenue, and higher-thanexpected support and overhead costs. 

D. FedACH Service—Table 10 shows 

the 2013 actual, 2014 estimate, and 2015 

budgeted cost-recovery performance for 

the commercial FedACH service. 

TABLE 10—FEDACH SERVICE PRO FORMA COST AND REVENUE PERFORMANCE

[Dollars in millions] 

Year Revenue Total expense Net income 

(Roe) [1–2] Targeted roe 

Recovery rate 

after targeted 

Roe [1/(2+4)] 

1 2 3 4 5 

2013 (actual) ........................................................................ 118.9 116.3 2.6 1.2 101.2% 

2014 (estimate) .................................................................... 123.3 140.9 ¥17.6 1.7 86.5 

2015 (budget) ....................................................................... 124.4 122.6 1.8 1.7 100.0 

1. 2014 Estimate—The Reserve Banks 

estimate that the FedACH service will 

recover 86.5 percent of total expenses 

and targeted ROE, compared with a 

2014 budgeted recovery rate of 99.2 

percent. The shortfall in the FedACH 

Service is due to a $31.6 million charge 

related to its investment associated with 

a multiyear technology initiative to 

modernize its processing platform.36

The Reserve Banks’ long-term cost 

recovery average, from 2003 to 2014, is 

102.1 percent. Through September, 

FedACH commercial origination and 

receipt volume was 4.1 percent higher 

than it was during the same period last 

year. The Reserve Banks believe that the 

volume growth will continue at the 

same pace for the full year 2014, higher 

than the 3.0 budgeted volume increase. 

2. 2015 Pricing—The Reserve Banks 

expect the FedACH service to recover 

100.0 percent of total expenses and 

targeted ROE in 2015. FedACH 

commercial origination and receipt 

volume is projected to grow 3.5 percent 

contributing to an increase of $1.1 

million in total revenue from the 2014 

estimate. Total expenses are budgeted to 

decrease $900 thousand from 2014 

budgeted expenses of $125.3 million, 

primarily because of efficiencies gained 

from synergies between the check and 

ACH operations. 

The Reserve Banks will modify the 

FedACH Minimum Origination Fee 

calculation to include fees associated 

with SameDay and FedGlobal 

origination transactions in the 

computation.37 The Reserve Banks will 

reduce the tier volume thresholds for 

the FedACH Risk Management Services 

from 500,000 to 100,000 items reviewed 

per month. 

The primary risks to the Reserve 

Banks’ ability to achieve budgeted 2015 

cost recovery for the FedACH service 

are cost overruns associated with 

unanticipated problems related to 

infrastructure currency efforts and 

higher-than-expected support and 

overhead costs. Other risks include 

lower-than-expected volume and 

associated revenue due to unanticipated 

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38The 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 nonTreasury 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. 

mergers and acquisitions and loss of 

market share due to direct exchanges 

and a shift of volume to the privatesector operator. 

E. Fedwire Funds and National 

Settlement Services—Table 11 shows 

the 2013 actual, 2014 estimate, and 2015 

budgeted cost-recovery performance for 

the Fedwire Funds and National 

Settlement Services. 

TABLE 11—FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES PRO FORMA COST AND REVENUE PERFORMANCE

[dollars in millions] 

Year Revenue Total expense Net income 

(ROE) [1–2] Targeted ROE 

Recovery rate 

after targeted 

ROE [1/(2+4)] 

% 

1 2 3 4 5 

2013 (actual) ........................................................................ 96.7 97.1 ¥0.3 1.0 98.6 

2014 (estimate) .................................................................... 109.5 106.6 2.9 1.5 101.3 

2015 (budget) ....................................................................... 112.2 109.8 2.4 1.5 100.8 

1. 2014 Estimate — The Reserve 

Banks estimate that the Fedwire Funds 

and National Settlement Services will 

recover 101.3 percent of total expenses 

and targeted ROE, compared with a 

2014 budgeted recovery rate of 98.0 

percent. The higher-than-budgeted cost 

recovery is primarily due to lower-thanexpected operating costs, which offset 

weaker-than-anticipated volumes and 

associated revenue. 

Through September, Fedwire Funds 

Service online volume was 0.6 percent 

lower than for the same period last year. 

For full-year 2014, the Reserve Banks 

estimate Fedwire Funds Service online 

volume to decline 1.1 percent from 2013 

levels, compared to the 3.8 percent 

volume increase that had been 

budgeted. Through September, National 

Settlement Service settlement file 

volume was unchanged from the same 

period last year, while settlement entry 

volume was 5.6 percent lower. For the 

full year, the Reserve Banks estimate 

that settlement file volume will decrease 

2.8 percent (same as budgeted) and 

settlement entry volume will decrease 

7.3 percent from 2013 levels (compared 

to a budgeted 1.8 percent increase). 

2. 2015 Pricing—The Reserve Banks 

expect the Fedwire Funds Service to 

recover 100.8 percent of total expenses 

and targeted ROE. Revenue is projected 

to be $112.2 million, an increase of 2.5 

percent from 2014. The Reserve Banks 

project total expenses to be $3.2 million 

higher than the 2014 estimate. 

The Reserve Banks will adjust the 

incentive pricing fees for the Fedwire 

Funds Service by increasing the Tier 1 

per item pre-incentive fee (the fee before 

volume discounts are applied) from 

$0.69 to $0.73 and increasing the Tier 3 

per item pre-incentive fee from $0.14 to 

$0.15. The Reserve Banks intend to keep 

the Tier 2 per-item pre-incentive fee the 

same. 

The Reserve Banks will decrease the 

surcharge for transfers exceeding $10 

million from $0.15 to $0.14. 

The Reserve Banks will increase the 

FedPayments Manager import/export 

monthly fee from $45 to $50. In 

addition, the Reserve Banks will 

increase the offline transaction 

surcharge from $45 to $50. The Reserve 

Banks estimate that the price changes 

will result in an approximate 4.7 

percent average price increase for 

Fedwire Funds customers. 

The Reserve Banks will not change 

National Settlement Service fees for 

2015. The Reserve Banks’ Fedwire 

Funds and National Settlement Services 

fees are consistent with their multi-year 

strategy to minimize pricing volatility 

while undertaking ongoing technology 

upgrades and related projects to further 

strengthen information security. 

The primary risk to the Reserve 

Banks’ ability to achieve budgeted 2015 

cost recovery for these services is cost 

overruns and schedule delays from 

unanticipated problems with managing 

complex technology programs. 

F. Fedwire Securities Service—Table 

12 shows the 2013 actual, 2014 

estimate, and 2015 budgeted cost 

recovery performance for the Fedwire 

Securities Service.38

TABLE 12—FEDWIRE SECURITIES SERVICE PRO FORMA COST AND REVENUE PERFORMANCE

[dollars in millions] 

Year Revenue Total expense Net income 

(ROE) [1–2] Targeted ROE 

Recovery rate 

after targeted 

ROE [1/(2+4)] 

% 

1 2 3 4 5 

2013 (actual) ........................................................................ 26.9 25.3 1.5 0.2 105.0 

2014 (estimate) .................................................................... 23.8 23.4 0.4 0.3 100.1 

2015 (budget) ....................................................................... 26.0 26.5 ¥0.6 0.4 96.5 

1. 2014 Estimate— The Reserve Banks 

estimate that the Fedwire Securities 

Service will recover 100.1 percent of 

total expenses and targeted ROE, 

compared with a 2014 budgeted 

recovery rate of 98.0 percent. The 

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65948 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

39The online transfer fee, monthly account 

maintenance fee, and monthly issue maintenance 

fee accounted for 92 percent of total Fedwire 

Securities Service revenue through June 2014. 

40Specifically, collateral management services 

refers to the Fedwire Securities Joint Custody 

Service, which facilitates the collateralization of 

deposits made by a government entity, through the 

pledging of book-entry securities by its depository 

institution. Approximately 72 percent of Fedwire 

Securities priced accounts are collateral accounts 

related to the Joint Custody Service. 

41Treasury reimbursement is calculated by 

multiplying costs by the ratio of Treasury to agency 

transfers. In 2015, Treasury projects its transfer 

volume will remain flat, while the Reserve Banks 

expect agency transfers to decrease. Therefore, the 

higher projected ratio of Treasury to agency 

transfers will result in Treasury reimbursing a 

higher portion of total costs. 

42FedMail, FedLine Web, FedLine Advantage, 

FedLine Command, and FedLine Direct are 

registered trademarks of the Federal Reserve Banks. 

43The FedLine Direct base-level package is 

available to current customers only and will be 

phased out in 2015 due to elimination of 56K line 

speed. 

44All customers, regardless of their chosen 

electronic access channel, are responsible for the 

purchase and installation of each VPN device. 

45Current FedTransaction Analyzer customers 

will be automatically moved to FedLine Advantage 

Premier if they originate and receive more than 250 

Fedwire funds transfers or have more than one 

routing number in a given month. Customers can 

opt out of the increased fees by discontinuing their 

use of the FedTransaction Analyzer tool or the 

FedLine Advantage access solution. 

higher-than-expected cost recovery is 

primarily due to lower-than-budgeted 

information technology and pension 

costs, which offset weaker-thananticipated volumes and associated 

revenue. 

Through September, Fedwire 

Securities Service online volume was 

31.5 percent lower than the same period 

last year. For full-year 2014, the Reserve 

Banks estimate Fedwire Securities 

Service online volume to decline 30.8 

percent from 2013 levels, compared to 

a budgeted decline of 10.9 percent. 

2. 2015 Pricing—The Reserve Banks 

expect the Fedwire Securities Service to 

recover 96.5 percent of total expenses 

and targeted ROE in 2015. The Reserve 

Banks project that 2015 revenue and 

expenses will increase by $2.2 million 

and $3.1 million, respectively, 

compared to 2014 estimates. 

The Reserve Banks project that online 

transfer activity will decline by 12.9 

percent in 2015, the number of accounts 

maintained will decrease by 14.1 

percent, and the number of agency 

securities maintained will increase by 

0.1 percent.39 The projected decline in 

account maintenance activity reflects 

customer closures of empty accounts to 

avoid unnecessary expenses and 

increased competition in collateral 

management services.40 The Reserve 

Banks also estimate a decrease in online 

transfer activity, driven by lower 

expected issuance of mortgage-backed 

and agency debt securities. The 

reduction in mortgage-backed securities 

issuance reflects gradually increasing 

interest rates and lower anticipated 

mortgage refinancing. The reduction in 

agency debt issuance reflects a further 

required reduction in government 

sponsored enterprise portfolios, which 

has led to a reduced funding need for 

new debt issuance. 

Expenses are budgeted to increase by 

$3.1 million from 2014 estimates, 

reflecting higher technology upgrade 

costs. The higher technology upgrade 

costs, however, are expected to be 

partially offset by higher Treasury 

reimbursements.41

The Reserve Banks will increase 

various fees for the Fedwire Securities 

Service. The Reserve Banks will 

increase the online transfer fee from 

$0.54 to $0.65, the monthly account 

maintenance fee from $40 to $48, and 

the monthly issue maintenance fee from 

$0.54 to $0.65 per issue. The Reserve 

Banks will also increase the Joint 

Custody Origination Surcharge from $40 

to $44. The Reserve Banks estimate that 

the price changes will result in an 

approximate 19.1 percent average price 

increase for Fedwire Securities 

customers. 

The primary risk to the Reserve 

Banks’ ability to achieve budgeted 2015 

cost recovery for these services is cost 

overruns and schedule delays from 

unanticipated problems with managing 

complex technology upgrades. 

G. FedLine Access—The Reserve 

Banks charge fees for the electronic 

connections that depository institutions 

use to access priced services and 

allocate the costs and revenue 

associated with this electronic access to 

the various priced services. There are 

currently five FedLine channels through 

which customers can access the Reserve 

Banks’ priced services: FedMail, 

FedLine Web®, FedLine Advantage, 

FedLine Command®, and FedLine 

Direct.42 The Reserve Banks package 

these channels into ten FedLine 

packages, described in the two 

paragraphs below, that are 

supplemented by a number of premium 

(or a` la carte) access and accounting 

information options. In addition, the 

Reserve Banks offer FedComplete 

packages, which are bundled offerings 

of a FedLine Advantage connection and 

a fixed number of FedACH, Fedwire 

Funds, and Check 21-enabled services. 

Five attended access packages offer 

access to critical payment and 

information services via a Web-based 

interface. The FedLine Exchange 

package (formerly the FedMail Email 

package) provides access to basic 

information services via email, while 

two FedLine Web packages offer an 

email option plus online attended 

access to a range of services, including 

cash services, FedACH information 

services, and check services. Three 

FedLine Advantage packages expand 

upon the FedLine Web packages and 

offer attended access to critical 

transactional services: FedACH, 

Fedwire Funds, and Fedwire Securities. 

Four unattended access packages are 

computer-to-computer, IP-based 

interfaces designed for medium- to highvolume customers. The FedLine 

Command package offers an unattended 

connection to FedACH, as well as most 

accounting information services. The 

three remaining packages are FedLine 

Direct packages, which allow for 

unattended connections at one of three 

connection speeds to FedACH, Fedwire 

Funds, and Fedwire Securities 

transactional and information services 

and to most accounting information 

services.43

Many of the FedLine access solutions 

fees in 2015 are designed to encourage 

customers to migrate to more efficient 

access solutions. The Reserve Banks 

will increase the fees on legacy services, 

such as an additional $10 per month for 

FedMail Fax, $300 per month for 

FedLine Direct (56K), and $400 for an 

additional 56K connection. The Reserve 

Banks also will introduce a $2,500 per 

month surcharge for those depository 

institutions that continue to use the 

AT&T VPN after February 1, 2015, 

instead of migrating to the Sprint VPN. 

In addition, the Reserve Banks will 

make other changes to FedLine pricing 

for 2015 to improve contingency 

preparedness between Reserve Banks 

and depository institutions. In 

particular, the Reserve Banks will add to 

the FedLine Advantage channel a new 

package, FedLine Advantage Premier 

that will be priced at $500 per month 

and includes a secondary VPN device.44

FedLine Advantage Premier will also 

include the FedTransaction Analyzer®

tool, which enables depository 

institutions to streamline after-the-fact 

analysis of payment transactions and 

automate reporting processes. 

Depository institutions with more than 

250 Fedwire transactions, or more than 

one routing number, will have access to 

the FedTransaction Analyzer tool via 

FedLine Advantage Premier rather than 

FedLine Advantage Plus package.45

The Reserve Banks will introduce two 

new tiers to FedComplete package 

solutions called FedComplete 100 

Premier and FedComplete 200 Premier, 

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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65949 

46Federal Reserve Regulatory Service (FRRS) 9– 

1558. 

which are $850 and $1,375 per month, 

respectively. These FedComplete 

packages include FedLine Advantage 

Premier. 

II. Analysis of Competitive Effect 

All operational and legal changes 

considered by the Board that have a 

substantial effect on payments system 

participants are subject to the 

competitive impact analysis described 

in the March 1990 policy, The Federal 

Reserve in the Payments System.46

Under this policy, the Board assesses 

whether proposed 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. 

The changes for 2015 are limited to 

product enhancements and pricing 

modifications; no new products or 

pricing constructs are introduced. These 

changes 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 changes 

should permit the Reserve Banks to earn 

a ROE that is comparable to overall 

market returns and provide for full cost 

recovery over the long run. 

III. 2015 Fee Schedules 

FEDACH SERVICE 2015 FEE SCHEDULE

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

FedACH minimum monthly fee.

Originating Depository Financial Institution (ODFI) 47 ............................................................................................. $35.00. 

Receiving Depository Financial Institution (RDFI) 48 ............................................................................................... 25.00. 

Origination (per item or record) 49.

Forward or return items in small files ...................................................................................................................... 0.0030. 

Forward or return items in large files ...................................................................................................................... 0.0025. 

Addenda record ....................................................................................................................................................... 0.0015. 

FedLine Web®-originated returns and notification of change (NOC) fee 50 ........................................................... 0.35. 

Facsimile exception returns/NOC 51 ........................................................................................................................ 45.00. 

Automated NOC fee ................................................................................................................................................ 0.20. 

Volume-based discounts (based on monthly billed receipt volume) 52.

Per item when receipt volume is 10,000,001 to 17,500,000 items per month ................................................ 0.0002 discount. 

Per item when receipt volume is more than 17,500,000 items per month ..................................................... 0.0003 discount. 

Receipt (per item or record).

Forward item ............................................................................................................................................................ 0.0025. 

Return item .............................................................................................................................................................. 0.0075. 

Addenda record ....................................................................................................................................................... 0.0015. 

On-us receipt credit 53 ............................................................................................................................................. 0.0025 discount. 

Volume-based discounts (forward items excluding FedACH SameDay service items).

Non-Premium Receivers—RDFIs receiving less than 90 percent of total network volume through FedACH.

Per item when volume is 1,000,001 to 12,500,000 items per month 54 .......................................................... 0.0007 discount. 

Per item when volume is more than 12,500,000 items per month 55 .............................................................. 0.0009 discount. 

Premium Receivers, level one—RDFIs receiving at least 90 percent of FedACH-originated volume through 

FedACH.

Per item when volume is 1,000,001 to 2,500,000 items per month 58 ............................................................ 0.0007 discount. 

Per item when volume is 2,500,001 to 12,500,000 items per month 58 .......................................................... 0.0008 discount. 

Per item when volume is more than 12,500,000 items per month.59 0.0010 discount. 

Premium Receivers, level two—RDFIs receiving at least 90 percent of ACH volume originated through 

FedACH or EPN.

Per item when volume is 1,000,001 to 2,500,000 items per month 58 ............................................................ 0.0007 discount. 

Per item when volume is 2,500,001 to 12,500,000 items per month 58 .......................................................... 0.0009 discount. 

Per item when volume is more than 12,500,000 items per month 59 .............................................................. 0.0011 discount. 

FedACH SameDay Service.

Origination 56 57.

Forward item in a small file .............................................................................................................................. 0.0030 surcharge. 

Forward item in a large file .............................................................................................................................. 0.0035 surcharge. 

Addenda record ................................................................................................................................................ 0.0015 surcharge. 

Return item in a small file ................................................................................................................................ 0.0030 discount. 

Return item in a large file ................................................................................................................................. 0.0025 discount. 

Return addenda record .................................................................................................................................... 0.0015 discount. 

Receipt 58.

Forward item .................................................................................................................................................... 0.0025 discount. 

Return item ....................................................................................................................................................... 0.0075 discount. 

Addenda record (forward/return) ...................................................................................................................... 0.0015 discount. 

Monthly FedACH Risk® Management fees 59.

Risk Origination Monitoring Service/RDFI Alert Service package pricing.

For up to 5 criteria sets .................................................................................................................................... 35.00. 

For 6 through 11 criteria sets ........................................................................................................................... 70.00. 

For 12 through 23 criteria sets ......................................................................................................................... 125.00. 

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65950 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

FEDACH SERVICE 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

For 24 through 47 criteria sets ......................................................................................................................... 150.00. 

For 48 through 95 criteria sets ......................................................................................................................... 250.00. 

For 96 through 191 criteria sets ....................................................................................................................... 425.00. 

For 192 through 383 criteria sets ..................................................................................................................... 675.00. 

For 384 through 584 criteria sets ..................................................................................................................... 850.00. 

For 585+ criteria sets ....................................................................................................................................... 1,100.00. 

Risk origination monitoring batch.

For 1 through 100,000 batches ..................................................................................................................... 0.007/batch. 

For 100,000+ batches ..................................................................................................................................... 0.0035/batch. 

Monthly FedPayments Reporter Service.

FedPayments Reporter Service package pricing includes.

Standard reports 60.

ACH volume summary by SEC code report—customer.61

Daily return ratio report.

Monthly return ratio report.

Receiver setup report.

Report delivery via FedLine file access solution (monthly fee).

For up to 50 reports .................................................................................................................................. 35.00. 

For 51 through 150 reports .............................................................................................................................. 55.00. 

For 151 through 500 reports ............................................................................................................................ 100.00. 

For 501 through 1,000 reports ......................................................................................................................... 180.00. 

For 1,001 through 1,500 reports ...................................................................................................................... 260.00. 

For 1,501 through 2,500 reports ...................................................................................................................... 420.00. 

For 2,501 through 3,500 reports ...................................................................................................................... 580.00. 

For 3,501 through 4,500 reports ...................................................................................................................... 740.00. 

For 4,501 through 5,500 reports ...................................................................................................................... 900.00. 

For 5,501 through 7,000 reports ...................................................................................................................... 1,100.00. 

For 7,001 through 8,500 reports ...................................................................................................................... 1,300.00. 

For 8,501+ reports ........................................................................................................................................... 1,500.00. 

Premier reports 62.

ACH volume summary by SEC code report—depository financial institution.

Reports 1 through 5 .................................................................................................................................. 10.00/report. 

Reports 6 through 10 ................................................................................................................................ 6.00/report. 

Reports 11+ .............................................................................................................................................. 1.00/report. 

On Demand ............................................................................................................................................... 1.00/report surcharge. 

ACH volume summary by SEC code report—customer On Demand ............................................................. 1.00/report surcharge. 

Monthly ACH routing number activity report.

Reports 1 through 5 .................................................................................................................................. 10.00/report. 

Reports 6 through 10 ................................................................................................................................ 6.00/report. 

Reports 11+ .............................................................................................................................................. 1.00/report. 

On-us inclusion.

Participation fee ................................................................................................................................................ 10.00/month/RTN. 

Per-item fee ...................................................................................................................................................... 0.0030. 

Per-addenda fee ............................................................................................................................................... 0.0015. 

Report delivery via encrypted email ........................................................................................................................ 0.20/email. 

Other fees.

Monthly fee (per routing number).

Account servicing fee 63 ................................................................................................................................... 45.00. 

FedACH settlement 64 ...................................................................................................................................... 55.00. 

Information extract file ...................................................................................................................................... 100.00. 

IAT Output File Sort ......................................................................................................................................... 75.00. 

Notification of change participation fee 65 ........................................................................................................ 5.00. 

Non-electronic input/output fee 66.

CD or DVD input/output ................................................................................................................................... 50.00. 

Paper input/output ............................................................................................................................................ 50.00. 

FedGlobal ACH Payments.

Canada service fee.

Item originated to Canada 67 ..................................................................................................................... 0.62. 

Return received from Canada 68 ............................................................................................................... 0.99. 

Trace of item at receiving gateway ........................................................................................................... 5.50 

Trace of item not at receiving gateway .................................................................................................... 7.00. 

Mexico service fee.

Item originated to Mexico 67 ...................................................................................................................... 0.67. 

Return received from Mexico 68 ................................................................................................................ 0.91. 

Item trace .................................................................................................................................................. 13.50. 

A2R item originated to Mexico 67 69 ........................................................................................................... 3.45. 

F3X item originated to Mexico 68 70 ........................................................................................................... 0.67. 

Panama service fee.

Item originated to Panama 67 .................................................................................................................... 0.72. 

Return received from Panama 68 .............................................................................................................. 1.00. 

Item trace .................................................................................................................................................. 7.00. 

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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65951 

47Any ODFI incurring less than 35 in forward 

value and non-value item origination fees will be 

charged a variable amount to reach the minimum. 

48Any RDFI not originating forward value and 

non-value items and incurring less than 25 in 

receipt fees will be charged a variable amount to 

reach the minimum. 

49Small files contain fewer than 2,500 items and 

large files contain 2,500 or more items. 

50The fee includes the item and addenda fees in 

addition to the conversion fee. 

51The fee includes the item and addenda fees in 

addition to the conversion fee. Reserve Banks also 

assess a 30 fee for every government paper return/ 

NOC they process. 

52Origination discounts apply only to those items 

received by FedACH receiving points and are 

available only to Premium Receivers. 

53 Depository institutions originating and 

receiving items on the same routing number. 

54This per-item discount is a reduction to the 

standard receipt fees listed in this fee schedule. 

55Receipt volumes of more than 12,500,000 items 

per month qualify for the waterfall discount which 

includes all FedACH receipt items. 

56This per-item surcharge is in addition to the 

standard origination fees for forward items. 

57This per-item discount is a reduction to the 

standard origination fees for return items. 

58This per-item discount is a reduction to the 

standard receipt fees. 

59Criteria 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. 

60Standard reports include Customer Transaction 

Activity, Death Notification, International (IAT), 

Notification of Change, Payment Data Information 

File, Remittance Advice Detail, Remittance Advice 

Summary, Return Item, Return Ratio, Social 

Security Beneficiary, and Originator Setup Reports. 

61ACH volume summary by SEC code reports 

generated on demand are subject to a 1.00 per 

report surcharge. 

62Premier reports generated on demand are 

subject to the package/tiered fees plus a surcharge. 

63The account servicing fee applies to routing 

numbers that have received or originated FedACH 

transactions. Institutions that receive only U.S. 

government transactions through the Reserve Banks 

or that elect to use EPN exclusively are not assessed 

this fee. 

64The FedACH settlement fee is applied to any 

routing number with activity during a month, 

including institutions that elect to use EPN 

exclusively but also have items routed to or from 

customers that access the ACH network through 

FedACH. This fee does not apply to routing 

numbers that use the Reserve Banks for only U.S. 

government transactions. 

65The notification of change fee is applied to any 

routing number with activity during a month. This 

fee does not apply to routing numbers that use the 

Reserve Banks for only U.S. government 

transactions. 

66Limited services are offered in contingency 

situations. 

67This per-item surcharge is in addition to the 

standard domestic origination and input file 

processing fees. 

68This per-item surcharge is in addition to the 

standard domestic receipt fees. 

69Account-to-receiver (A2R) allows funds from 

accounts at a U.S. depository institution to be 

retrieved by any receiver at either a participating 

bank location or a trusted, third-party provider. 

70Payments are both transferred and received in 

foreign currency. The foreign exchange rate and 

settlement is managed and processed by 

participating U.S. depository institutions and the 

respective foreign gateway operators via their 

foreign correspondent banks. 

FEDACH SERVICE 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

NOC .......................................................................................................................................................... 0.72. 

Latin America service fee.

A2R item originated to Latin America 67 69 ................................................................................................ 4.40. 

Return received from Latin America 68 ..................................................................................................... 0.72. 

Item trace .................................................................................................................................................. 5.00. 

Europe service fee.

Item originated to Europe 67 ...................................................................................................................... 1.25. 

F3X item originated to Europe 67 70 ........................................................................................................... 1.25. 

Return received from Europe 68 ................................................................................................................ 1.35. 

Item trace .................................................................................................................................................. 7.00. 

FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES 2015 FEE SCHEDULE

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

Fedwire Funds Service 

Monthly participation fee .................................................................................................................................................................. $90.00 

Basic volume-based pre-incentive transfer fee (originations and receipts).

Per transfer for the first 14,000 transfers per month ............................................................................................................. 0.73 

Per transfer for additional transfers up to 90,000 per month ...................................................................................................... 0.24 

Per transfer for every transfer over 90,000 per month .......................................................................................................... 0.15 

Volume-based transfer fee with the incentive discount (originations and receipts) 71.

Per eligible transfer for the first 14,000 transfers per month ............................................................................................... 0.148 

Per eligible transfer for additional transfers up to 90,000 per month .......................................................................................... 0.048 

Per eligible transfer for every transfer over 90,000 per month ............................................................................................. 0.030 

Surcharge for offline transfers (originations and receipts) .......................................................................................................... 50.00 

Surcharge for high-value payments > $10 million ......................................................................................................................... 0.14 

Surcharge for high-value payments > $100 million ............................................................................................................................ 0.36 

Surcharge for payment notification ...................................................................................................................................................... 0.20 

Surcharge for late-day transfer originations 72 .................................................................................................................................... 0.26 

Monthly FedPayments Manager import/export fee 73 .................................................................................................................... 50.00 

National Settlement Service 

Basic 

Settlement entry fee ..................................................................................................................................................................... 1.50 

Settlement file fee ......................................................................................................................................................................... 30.00 

Surcharge for offline file origination ..................................................................................................................................................... 45.00 

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65952 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

71The 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 prior activity, then the customer qualifies 

automatically for incentive discounts for the year. 

The applicable incentive discounts are as follows: 

$0.582 for transfers up to 14,000; $0.192 for 

transfers 14,001 to 90,000; and $0.120 for transfers 

over 90,000. 

72This surcharge applies to originators of 

transfers that are processed by the Reserve Banks 

after 5:00 p.m. ET. 

73This 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. 

74This minimum monthly charge is only assessed 

if total settlement charges during a calendar month 

are less than $60. 

75Special settlement arrangements use Fedwire 

Funds transfers to effect settlement. Participants in 

arrangements and settlement agents are also 

charged the applicable Fedwire Funds transfer fee 

for each transfer into and out of the settlement 

account. 

FEDWIRE FUNDS AND NATIONAL SETTLEMENT SERVICES 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

Minimum monthly charge (account maintenance) 74 ........................................................................................................................... 60.00 

Special settlement arrangements 75.

Fee per day .................................................................................................................................................................................. 150.00 

FEDWIRE SECURITIES SERVICE 2015 FEE SCHEDULE

[Effective January 2, 2015. Bold indicates changes from 2014 prices] 

Fee 

Basic transfer fee 

Transfer or reversal originated or received ............................................................................................................................ $0.65 

Surcharge.

Offline origination & receipt surcharge ......................................................................................................................................... 66.00 

Monthly maintenance fees 

Account maintenance (per account) ........................................................................................................................................ 48.00 

Issues maintained (per issue/per account) ............................................................................................................................. 0.65 

Claim adjustment fee ........................................................................................................................................................................... 0.75 

Joint Custody Origination Surcharge ............................................................................................................................................. 44.00 

FEDLINE 2015 FEE SCHEDULE

[Effective January 2, 2015. Bold indicates changes from 2014 prices.] 

FedComplete Packages (monthly) 76

FedComplete 100 Plus ......................................................................................................................................................................... $775.00. 

Includes: 7,500 FedForward transactions.

70 FedReturn® transactions.

14,000 FedReceipt® transactions.

35 Fedwire funds origination transfers.

35 Fedwire funds receipt transfers.

Fedwire participation fee.

1,000 FedACH origination items.

FedACH minimum fee.

7,500 FedACH receipt items.

FedACH receipt minimum fee.

10 FedACH web return/NOC.

500 FedACH addenda originated.

1,000 FedACH addenda received.

FedACH account servicing.

FedACH settlement.

FedLine Advantage Plus.

FedLine subscriber 5-pack.

FedLine Exchange subscriber 5-pack.

FedComplete 100 Premier ................................................................................................................................................................... 850.00. 

Includes: 7,500 FedForward transactions.

70 FedReturn transactions.

14,000 FedReceipt transactions.

35 Fedwire funds origination transfers.

35 Fedwire funds receipt transfers.

Fedwire participation fee.

1,000 FedACH origination items.

FedACH minimum fee.

7,500 FedACH receipt items.

FedACH receipt minimum fee.

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Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65953 

FEDLINE 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices.] 

FedComplete Packages (monthly) 76

10 FedACH web return/NOC.

500 FedACH addenda originated.

1,000 FedACH addenda received.

FedACH account servicing.

FedACH settlement.

FedLine Advantage Premier.

FedLine subscriber 5-pack.

FedLine Exchange subscriber 5-pack.

FedComplete 200 Plus ......................................................................................................................................................................... 1,300.00. 

Includes: 25,000 FedForward transactions.

225 FedReturn transactions.

25,000 FedReceipt transactions.

100 Fedwire funds origination transfers.

100 Fedwire funds receipt transfers.

Fedwire participation fee.

2,000 FedACH origination items.

FedACH minimum fee.

25,000 FedACH receipt items.

FedACH receipt minimum fee.

20 FedACH web return/NOC.

750 FedACH addenda originated.

1,500 FedACH addenda received.

FedACH account servicing.

FedACH settlement.

FedLine Advantage Plus.

FedLine subscriber 5-pack.

FedLine Exchange subscriber 5-pack.

FedComplete 200 Premier ................................................................................................................................................................... 1,375.00. 

Includes: 25,000 FedForward transactions.

225 FedReturn transactions.

25,000 FedReceipt transactions.

100 Fedwire funds origination transfers.

100 Fedwire funds receipt transfers.

Fedwire participation fee.

2,000 FedACH origination items.

FedACH minimum fee.

25,000 FedACH receipt items.

FedACH receipt minimum fee.

20 FedACH web return/NOC.

750 FedACH addenda originated.

1,500 FedACH addenda received.

FedACH account servicing.

FedACH settlement.

FedLine Advantage Premier.

FedLine subscriber 5-pack.

FedLine Exchange subscriber 5-pack.

FedComplete Excess Volume Surcharge. 77

FedForward ..................................................................................................................................................................................... 0.01/item. 

FedReturn ....................................................................................................................................................................................... 0.7500/item. 

Fedwire funds origination ................................................................................................................................................................ 0.7000/item. 

FedACH origination ......................................................................................................................................................................... 0.0025/item. 

FedComplete package credit incentive 78 .............................................................................................................................................. (1,500.00). 

FedLine Customer Access Solutions (monthly). 79

FedLine Exchange (formerly FedMail Email) .................................................................................................................................... 40.00. 

FedLine Web ......................................................................................................................................................................................... 110.00. 

Includes: FedLine Exchange.

FedLine Web with no priced services subscriptions.

FedACH information services (includes RDFI file alert service).

Check 21 services. 80

Check 21 duplicate notification.

Check adjustments.

Service charge information.

Account management information. 81

FedLine Web Plus ................................................................................................................................................................................ 140.00. 

Includes:FedLine Web traditional package.

FedACH risk management services.

FedACH FedPayments Reporter Service via secure email.

Check large dollar return.

Check FedImage® services.

Account management information.

Cash management plus service.

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65954 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 

FEDLINE 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices.] 

FedComplete Packages (monthly) 76

Various accounting and other inquiry and report services (Real-time Account Balance information, Daylight Overdraft Balance, and Available Funds Balance information; drill down and search features to view transaction details; daily Statement 

of Account and data files; collateral totals and details; and ex-post Daylight Overdraft reports)..

FedLine Advantage .............................................................................................................................................................................. 380.00. 

Includes: FedLine Web traditional package.

FedACH transactions.

Fedwire funds transactions.

Fedwire securities transactions.

Fedwire cover payments.

Check large dollar return.

Check FedImage services.

Account management information.

Various accounting services (ABMS inquiry, IAS/PSR inquiry, IAS detailed inquiries, notifications and advices, end-of-day accounting file (PDF)).

FedLine Advantage Plus ..................................................................................................................................................................... 425.00. 

Includes: FedLine Advantage traditional package.

FedACH risk management services.

FedACH FedPayments Reporter Service via secure email.

Fedwire Funds FedPayments Manager import/export.

FedTransaction Analyzer (less than 250 FedWire transactions and one routing number per month).

Account management information with intra-day search.

FedLine Advantage Premier ............................................................................................................................................................... 500.00. 

Includes: FedLine Advantage Plus package with no priced services subscriptions.

FedTransaction Analyzer (more than 250 Fedwire transactions and two routing numbers per month).

Secondary VPN device.

FedLine Command Plus ...................................................................................................................................................................... 1,000.00. 

Includes: FedLine Advantage Plus package.

FedLine Command with two certificates.

Fedwire statement services.

Intra-day CI file.

Statement of account spreadsheet file (SASF).

Financial Institution Reconcilement Data File (FIRD).

Billing Data Format File (BDFF).

FedLine Direct. 82 ................................................................................................................................................................................. 4,500.00. 

Includes: FedLine Advantage traditional package.

56K Dedicated WAN Connection.

FedLine Command with two certificates.

FedLine Direct with two certificates.

Fedwire statement services.

Intra-day file (I-Day CI File).

Statement of Account Spreadsheet File (SASF).

Financial Institution Reconcilement Data File (FIRD).

Billing Data Format File (BDFF).

FedLine Direct Plus ............................................................................................................................................................................. 3,600.00. 

Includes: FedLine Direct traditional package.

56K or 256K Dedicated WAN Connection.

FedACH risk management services.

FedACH FedPayments Reporter Service via secure email.

Fedwire Funds FedPayments Manager import/export.

FedTransaction Analyzer.

FedLine Direct Premier ........................................................................................................................................................................ 6,500.00. 

Includes: FedLine Direct Plus package.

T1 Dedicated WAN Connection.

A La Carte Options (monthly). 83

Electronic Access.

FedLine Exchange subscriber 5-pack 84 ........................................................................................................................................ 10.00. 

FedLine subscriber 5-pack ............................................................................................................................................................. 80.00. 

Additional FedLine Command certificate 85 .................................................................................................................................... 100.00. 

Additional FedLine Direct certificate 86 ........................................................................................................................................... 100.00. 

Maintenance of additional virtual private network device ............................................................................................................... 60.00. 

FedLine Advantage 800# Usage (per hour) ................................................................................................................................... 3.00. 

Dial-Only VPN surcharge ................................................................................................................................................................ 1,000.00. 

Additional dedicated connections. 87

56K .......................................................................................................................................................................................... 3,500.00. 

256K ......................................................................................................................................................................................... 2,500.00. 

T1 ............................................................................................................................................................................................. 3,200.00. 

FedLine international setup (one-time fee) ..................................................................................................................................... 5,000.00. 

FedLine Direct contingency solution 88 ........................................................................................................................................... 1,000.00. 

Check 21 large file delivery ............................................................................................................................................................ various. 

FedMail Fax ................................................................................................................................................................................... 70.00. 

Legacy VPN device surcharge 89 ................................................................................................................................................ 2,500.00. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Notices 65955 

76FedComplete packages are all-electronic 

service options that bundle payment services with 

an access solution for one monthly fee. 77Per-item surcharges are in addition to the 

standard fees listed in the applicable priced 

services fee schedules. 78New FedComplete package customers with a 

new FedLine Advantage connection are eligible for 

a one-time $1,500 credit applied to their Federal 

Reserve service charges. Customers receiving credit 

must continue using the FedComplete package for 

a minimum of six months or forfeit the $1,500 

credit. 79 VPN hardware for FedLine Advantage and 

FedLine Command is billed directly by the vendor. 

A list of fees can be found at http://

www.frbservices.org/files/servicefees/pdf/access/

2013_vendor_fees.pdf. 80Check 21 services can be accessed via three 

options: FedLine Web, an Internet connection with 

Axway Secure Transport Client, or a dedicated 

connection using Connect: Direct. 81Ex-post Daylight Overdraft Reports and the 

daily Statement of Account are available via 

FedMail. 82FedLine Direct is available to installed 

customer base only. The 56K option is not available 

for new orders. 83These add-on services can be purchased only 

with a FedLine Customer Access Service option. 84There are no priced subscribers contained in 

the FedLine Exchange or FedLine packages. 85Additional FedLine Command Certificates 

available for FedLine Command and Direct 

packages only. 86Additional FedLine Direct Certificates available 

for FedLine Direct packages only. 87Network diversity supplemental charge of 

$2,000 a month may apply in addition to these fees. 88FedLine Direct contingency solution is 

available only for FedLine Direct Plus & Premier 

packages. 

89Effective February 1, 2015. Price will increase 

to $5,000 on May 1, 2015 and $7,500 on September 

1, 2015. 

90Applicable to VPN devices ordered before May 

13, 2013. 

91Cash Management Service options are limited 

to Plus and Premier packages. 

92End of Day Reconcilement File option is 

available to FedLine Web Plus and FedLine 

Advantage Plus packages. 

93Statement of Account Spreadsheet File option 

is available to FedLine Web Plus and FedLine 

Advantage Plus packages. 

94ACTS Report options are limited to FedLine 

Command Plus and FedLine Direct Plus and 

Premier packages. 

FEDLINE 2015 FEE SCHEDULE—Continued 

[Effective January 2, 2015. Bold indicates changes from 2014 prices.] 

FedComplete Packages (monthly) 76

VPN device modification ................................................................................................................................................................. 200.00. 

VPN device modification emergency surcharge ............................................................................................................................. 200.00. 

VPN device missed activation appointment ................................................................................................................................... 175.00. 

VPN device expedited hardware surcharge ................................................................................................................................... 100.00. 

VPN device replacement or move .................................................................................................................................................. 300.00. 

Expedited legacy VPN device order/change 90 .............................................................................................................................. 500.00. 

Accounting Information Services.

Cash Management System. 91

Plus—Own report—up to six files with no respondent/sub-account activity (per month) ....................................................... 60.00. 

Plus—Own report—up to six files with less than 10 respondent and/or sub-accounts (per month) ...................................... 125.00. 

Plus—Own report—up to six files with 10–50 respondent and/or sub-accounts (per month) ............................................... 250.00. 

Plus—Own report—up to six files with 51–100 respondents and/or sub-accounts (per month ............................................. 500.00. 

Plus—Own report—up to six files with 101–500 respondents and/or sub-accounts (per month) .......................................... 750.00. 

Plus—Own report—up to six files with >500 respondents and/or sub-accounts (per month) ................................................ 1,000.00. 

End-of-day financial institution reconcilement data file (per month) 92 .......................................................................................... 150.00. 

Statement of account spreadsheet file (per month) 93 ................................................................................................................... 150.00. 

Intra-day download search file (with AMI) (per month) 94 .............................................................................................................. 150.00. 

ACTS Report—<20 sub-accounts .................................................................................................................................................. 500.00. 

ACTS Report—21–40 sub-accounts .............................................................................................................................................. 1,000.00. 

ACTS Report—41–60 sub-accounts .............................................................................................................................................. 1,500.00. 

ACTS Report—> 60 sub-accounts ................................................................................................................................................. 2,000.00. 

By order of the Board of Governors of the 

Federal Reserve System, October 31, 2014. 

Robert deV. Frierson, 

Secretary of the Board. 

[FR Doc. 2014–26322 Filed 11–5–14; 8:45 am] 

BILLING CODE P 

FEDERAL RESERVE SYSTEM 

Formations of, Acquisitions by, and 

Mergers of Bank Holding Companies 

The companies listed in this notice 

have applied to the Board for approval, 

pursuant to the Bank Holding Company 

Act of 1956 (12 U.S.C. 1841 et seq.) 

(BHC Act), Regulation Y (12 CFR part 

225), and all other applicable statutes 

and regulations to become a bank 

holding company and/or to acquire the 

assets or the ownership of, control of, or 

the power to vote shares of a bank or 

bank holding company and all of the 

banks and nonbanking companies 

owned by the bank holding company, 

including the companies listed below. 

The applications listed below, as well 

as other related filings required by the 

Board, are available for immediate 

inspection at the Federal Reserve Bank 

indicated. The applications will also be 

available for inspection at the offices of 

the Board of Governors. Interested 

persons may express their views in 

writing on the standards enumerated in 

the BHC Act (12 U.S.C. 1842(c)). If the 

proposal also involves the acquisition of 

a nonbanking company, the review also 

includes whether the acquisition of the 

nonbanking company complies with the 

standards in section 4 of the BHC Act 

(12 U.S.C. 1843). Unless otherwise 

noted, nonbanking activities will be 

conducted throughout the United States. 

Unless otherwise noted, comments 

regarding each of these applications 

must be received at the Reserve Bank 

indicated or the offices of the Board of 

Governors not later than December 1, 

2014. 

A. Federal Reserve Bank of San 

Francisco (Gerald C. Tsai, Director, 

Applications and Enforcement), 101 

Market Street, San Francisco, California 

94105–1579: 

1. Pacific Premier Bancorp, Inc., 

Irvine, California; to acquire voting 

shares of Independence Bank, Newport 

Beach, California. 

Board of Governors of the Federal Reserve 

System, November 3, 2014. 

Michael J. Lewandowski, 

Associate Secretary of the Board. 

[FR Doc. 2014–26366 Filed 11–5–14; 8:45 am] 

BILLING CODE 6210–01–P 

FEDERAL TRADE COMMISSION 

[File No. 141 0183] 

H.I.G. Bayside Debt & LBO Fund II, L.P. 

and Crestview Partners, L.P. ; Analysis 

to Aid Public Comment 

AGENCY: Federal Trade Commission. 

mstockstill on DSK4VPTVN1PROD with NOTICES