Federal Reserve Board Vice Chairman Alice M. Rivlin told Congress Tuesday that the central bank has no plan to exit the check- processing business.
Testifying before a House Banking subcommittee, Ms. Rivlin also rebutted charges that the Fed competes unfairly.
"The cost of check processing is covered," she said. "I don't see the problem here."
However, Rep. Carolyn Maloney, D-N.Y., charged that the Fed spends up to $17 million a year to subsidize its check transportation unit. "This gives the Fed an unfair advantage over the private sector," she said.
Ms. Rivlin disputed that claim, saying losses in check transportation are covered by profits in other components of the check-processing business.