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Board of Governors of the Federal Reserve System
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Federal Reserve Board of Governors

Federal Reserve's Key Policies for the Provision of Financial Services

Glossary

Depository institution. Financial institution that obtains its funds mainly through deposits from the public; includes commercial banks, savings and loan associations, savings banks, and credit unions. See also 12 U.S.C. 461 (b)(1).

Private-sector adjustment factor (PSAF). The Monetary Control Act of 1980 requires that Reserve Banks set fees for "priced services" provided to depository institutions at a level to recover all direct and indirect costs and imputed costs. These imputed costs, such as taxes, that would have been paid and the return on capital that would have been earned had the services been provided by a private business, are referred to as the private-sector adjustment factor (PSAF). The PSAF is based on data developed in part from a model comprising the nation's fifty largest bank holding companies by amount of assets.

Magnetic ink character recognition (MICR) line. The line of numbers near the bottom of a check, which may include the bank routing number, the customer account number, the check number, the amount, and other information, printed in magnetic ink so that the information can be read electronically.

Division of Reserve Bank Operations and Payment Systems (RBOPS). The division at the Federal Reserve Board that oversees the Federal Reserve Banks' provision of financial services to depository institutions; fiscal agency services on behalf of the Treasury and other government agencies; and significant support functions, such as information technology, financial and cost accounting, audit, human resources, facilities management, and protection. The division is also responsible for the development of policies and regulations to foster the efficiency and integrity of the U.S. payment system, and it works with other central banks and international organizations to improve the payment system more broadly.

Financial Services Policy Committee (FSPC). A committee of senior Federal Reserve Bank officials, responsible for the overall direction of financial services and related support functions for the Federal Reserve Banks and for leadership in the evolving U.S. payment system.

Committee on Federal Reserve Bank Affairs. An internal standing committee of the Federal Reserve Board that is responsible for reviewing proposals before consideration by the full Board of Governors.

The Federal Reserve Banks' planning and control system (PACS). The cost-accounting system for all Reserve Banks. PACS provides uniform methods of accounting for expenses that allow each District to determine the full cost of the System's service lines.

Fiscal-agency functions. The Federal Reserve Act provides that, when required by the Secretary of the Treasury, Reserve Banks will act as fiscal agents and depositories of the United States. As fiscal agents, Reserve Banks provide the Department of the Treasury with services related to the federal debt. For example, they issue, transfer, reissue, exchange, and redeem marketable Treasury securities and savings bonds; they also process secondary market transfers initiated by depository institutions. As depositories, Reserve Banks collect and disburse funds on behalf of the federal government. They also provide fiscal agency services on behalf of several domestic and international government agencies. See also 12 U.S.C. 391.

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Last update: August 2, 2013