Fed may offer some volume discounts.

WASHINGTON -- The Federal Reserve is considering changing the way it determines fees for some of its services.

In a board meeting last week, the Fed's board of governors asked its staff to come up with a formal proposal to base some of its fees on volume rather than purely on cost. Because the new pricing method would be a significant departure from current practice - though it would be applied only to few services initially - the Fed wants to solicit outside comment.

Traditionally, the banks have charged the same price for its services, regardless of the number of transactions a single institution requests. By offering large customers lower prices, Fed officials said, the Fed hopes to remain competitive with private providers of the services.

Some of the Fed's competitors in check processing already offer discounts.

The board took up the issue last Wednesday, after district banks and board staff asked for permission to set volume-based fees for cash letter and coupon envelop fees for noncash collection services. They also proposed allowing two district banks to adopt volume-based pricing for some check products.

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