Sean Patrick Maloney: “the events of recent years have taught us time and again that we should rely as much as possible on the private sector…”

“the events of recent years have taught us time and again that we should rely as much as possible on the private sector functioning in the competitive marketplace to provide commercial-type services, particularly services sold to business firms. Where there is a Federal agency that provides those types of services, we must closely examine its activities to determine if it is competing fairly with its private-sector competitors. This becomes more important when the agency both competes directly with private-sector firms and regulates those competitors. Mr. Speaker, the Federal Reserve is using its role as competitor and regulator in the check processing system to unfairly undercut the private sector. They are using an accounting device called the ``pension cost credit'' to subsidize the prices they charge banks, resulting in an unfair handicap to the private sector. When people hear the phrase ``Federal Reserve,'' they think about interest rates, inflation, and other aspects of monetary policy. However, the Fed is not just about monetary policy and banking supervision. Much of what the Fed does simply involves the processing of paper checks. The Fed charges its banks a fee for the service it provides. In 1980, Congress passed the Monetary Control Act so that private sector companies could fairly compete with the Federal Reserve in providing banks with these and other services.”