Fed sets slight overall increase in priced services for 2018

A 1.4% average price increase for Federal Reserve priced services in 2018 will result in estimated net income of $5.2 million, on total budgeted income of $441.7 million, the Fed said Monday.

The new fee schedule will give the central bank a “recovery rate” (after return on expenses) of 100%, according to the fee schedule for next year.

In a release, the Fed said the 2018 fee schedule will result in: a 0.4% average price increase for check customers; a 3.6% average price increase for FedACH customers; a 1.2% average price decrease for Fedwire Funds customers; no change in price for National Settlement Service (NSS) and Fedwire Securities Service, and; a 4.3% average price increase for FedLine customers.

The Fed said the increase for FedACH “is in response to increasing operating costs associated with an ongoing technology upgrade.”

Compared to estimated results for this year, revenue from the priced services is budgeted to be lower in 2018. In 2017, the Fed estimates $442.3 million in revenue from the services. The net for 2017, the Fed estimated, will be $16 million — about $11.4 million more than budgeted, and covering 102.6% of agency expenses.

The Fed also approved the 2018 private-sector adjustment factor (PSAF) of $18.9 million for priced services. “The PSAF is an allowance for income taxes and other imputed expenses that would have been paid and profit that would have been earned if the Reserve Banks’ priced services were provided by a private business” as required by federal law, the Fed said.

Federal Reserve Board approves fee schedule for Federal Reserve Bank priced services