Rivlin Study Supports Fed's Role in Check and ACH

---

Almost a year and a half ago, Federal Reserve Chairman Alan Greenspan appointed a special committee to examine the Fed's role in the retail payments system. This group, called the Rivlin Committee, focused its attention on studying the Fed's involvement in check collection and ACH services.

To keep the analysis focused on critical payments system issues, the Committee developed five hypothetical scenarios for the Fed. These scenarios ranged from completely withdrawing from check and ACH services all the way to leading the movement to an electronic-based retail payments system.

To research these issues, the Committee held a series of discussion forums across the country. Attending these forums were financial institutions of all sizes, third-party providers, clearinghouses, consumer groups, academics and consultants. Using this information and insight from other interested parties, the Committee reached two fundamental conclusions:

• The Federal Reserve should continue providing both check collection and ACH services, with the explicit goal of enhancing the efficiency, effectiveness and convenience of both systems while ensuring safety, reliability and access for all financial institutions.
• The Federal Reserve should play a more active role in enhancing the efficiency of check and ACH services and in helping evolve strategies for moving to the next generation of payment instruments. In doing so, we should work closely and collaboratively with providers and users of the payments system.

The full report contains several other recommendations for check and ACH services. To obtain a copy, contact Cheryl McCarthy in St. Louis at (314) 444-8459 or visit www.federalreserve.gov/boarddocs/press/general/1998/19980105.

Fed Establishes Central Business Development Office

Several recommendations in the Rivlin Committee's report are to increase the Fed's promotional and educational efforts for check and ACH services. One action we are taking to fulfill this goal is the recent establishment of a central Business Development Office, located at the Federal Reserve Bank of Chicago.

The primary function of this office will be to coordinate the development and delivery of products and services across the Federal Reserve System, as well as coordinate market research efforts. The office also will develop national promotional and customer communication materials.

The Business Development Office will help the Reserve Banks better work together and more consistently manage relationships with the System's diverse customer base.