Fed's FCA report offers two versions

Northwestern Financial Review, Nov 22, 1997

The Federal Reserve has upgraded its Functional Cost and Profit Analysis report, 40 years after the service originated in 1957. The report gives the industry a way to compare the specific cost of providing certain services, including installment loans, commercial loans, demand deposits, savings deposits and much more.

Organizations interested in purchasing the reports are asked to complete a questionnaire outlining the bank's costs in key areas. The information is returned to the Fed, where it is compiled and analyzed. Each bank then receives a report specific to their bank that can be used to analyze expenses in key operating areas, such as ATM, ACH, wire transfer, data processing and facilities management. In addition, the report compares your bank's information to peer group banks. Participating banks also receive the Fed's FCA National Average Report which summarizes costs across banks nationwide.

New this year, the Fed is offering two levels of service: FCA Basic and FCA Plus. The basic product provides a simplified cost accounting product. Its data collection component is designed to resemble the bank's call report as much as possible, making data collection relatively easy. FCA Plus gives bankers a more detailed look at expenses. It takes into account both direct and indirect expenses.

Banks are encouraged to participate year after year. Ward Lenius, coordinator for the FCA product at the Minneapolis Federal Reserve Bank, said his office provides support to banks while collecting data. He said after the first year, most banks become thoroughly versed in the data collection process making it much easier in subsequent years.

The FCA Basic product costs $200 while the Plus product is $400. The National Average Report is free to participating banks.

For further information, call Lenius at 612-204-6959.