To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer and Chief Financial Officer



On October 31, 2002, the Federal Reserve Board approved fee schedules for Federal Reserve Bank payment services and electronic connections and a private-sector adjustment factor (PSAF) for 2003.

In 2003, the Reserve Banks will reduce fees for their Fedwire funds transfer, Fedwire securities, and FedACH services. Check service fees will increase, on average, approximately 3 percent compared with current fees.

The Board also approved the 2003 PSAF for Reserve Bank priced services of $171.7 million. The PSAF is an allowance for taxes and other imputed expenses that would have to be paid and return on capital that would have to be earned if the Federal Reserve's priced services were provided by a private business. The Monetary Control Act of 1980 requires the Federal Reserve to recover the costs of providing priced payment services, including the PSAF, over the long run, to promote competition between the Reserve Banks and private-sector service providers.

Date: The new fee schedules become effective on January 2, 2003.

Additional Information: The 2003 fee schedule for each of the priced services except the check service is included in the attached (95 KB, 33 pages) notice. Fee schedules for all priced services will be available on the Federal Reserve Banks' Financial Services web site at by November 5, 2002. Contact information regarding the fee schedules is also included in the attached notice.