The Monetary Control Act of 1980 (MCA), by requiring that the Fed explicitly price all the fee services it offers to banks, establishes, as a matter of public policy, a competition between the Reserve Banks and the private sector in the provision of payment services, to ensure that the efficiencies of market competition are realized fully.
Other legal and policy limitations on the Reserve Banks also affect the Fed's competition within the private sector in the provision of payments services. First, the Reserve Banks, as directed by the MCA, must make their payments services available to all depository institutions - in contrast to private-sector competitors, which may offer their services to a limited, more profitable market segment.