Definition of Private Sector Adjustment Factor (PSAF)

pricing markup that adjusts service fees charged by Federal Reserve Bank for check clearing and other services. This markup reflects operational costs, taxes paid, and profit margins of private sector firms. Under the monetary control act of 1980 Federal Reserve Banks are required to charge service fees on check collection and other payment services that prior to 1981 were furnished without charge. The PSAF is based on data collected from major bank holding companies, and is revised annually.