Availability of Funds and Collection of Checks

Federal Register: January 5, 2010 (Volume 75, Number 2)

Rules and Regulations

Page 219-221

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr05ja10-1

Rules and Regulations

Federal Register

This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

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Page 219

FEDERAL RESERVE SYSTEM 12 CFR Part 229

Regulation CC; Docket No. R-1382

Availability of Funds and Collection of Checks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

SUMMARY: The Board of Governors (Board) is amending the routing number guide to next-day availability checks and local checks in Regulation CC to delete the reference to the head office of the Federal Reserve Bank of Atlanta and to reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal

Reserve Bank of Cleveland. These amendments reflect the restructuring of check-processing operations within the Federal Reserve System.

Subsequent to these amendments, there will only be a single check- processing region for purposes of Regulation CC and there will no longer be any checks that are nonlocal.

DATES: The final rule will become effective on February 27, 2010.

FOR FURTHER INFORMATION CONTACT: Jeffrey S. H. Yeganeh, Financial

Services Manager (202/728-5801), or Joseph P. Baressi, Financial

Services Project Leader (202/452-3959), Division of Reserve Bank

Operations and Payment Systems; or Dena L. Milligan, Attorney (202/452- 3900), Legal Division. For users of Telecommunications Devices for the

Deaf (TDD) only, contact 202/263-4869.

SUPPLEMENTARY INFORMATION: Regulation CC establishes the maximum period a depositary bank may wait between receiving a deposit and making the deposited funds available for withdrawal.\1\ A depositary bank generally must provide faster availability for funds deposited by a

``local check'' than by a ``nonlocal check.'' A check is considered local if it is payable by or at or through a bank located in the same

Federal Reserve check-processing region as the depositary bank.

\1\ For purposes of Regulation CC, the term ``bank'' refers to any depository institution, including commercial banks, savings institutions, and credit unions.

Appendix A to Regulation CC contains a routing number guide that assists banks in identifying local and nonlocal banks and thereby determining the maximum permissible hold periods for most deposited checks. The appendix includes a list of each Federal Reserve check- processing office and the first four digits of the routing number, known as the Federal Reserve routing symbol, of each bank that is served by that office for check-processing purposes. Banks whose

Federal Reserve routing symbols are grouped under the same office are in the same check-processing region and thus are local to one another.

On February 27, 2010, the Reserve Banks will transfer the check- processing operations of the head office of the Federal Reserve Bank of

Atlanta to the head office of the Federal Reserve Bank of Cleveland. As a result of this change, some checks that are drawn on and deposited at banks located in the Atlanta and Cleveland check-processing regions and that currently are nonlocal checks will become local checks subject to faster availability schedules. To assist banks in identifying local and nonlocal checks and making funds availability decisions, the Board is amending the lists of routing symbols in appendix A associated with the

Federal Reserve Banks of Atlanta and Cleveland to reflect the transfer of check-processing operations from the head office of the Federal

Reserve Bank of Atlanta to the head office of the Federal Reserve Bank of Cleveland. To coincide with the effective date of the underlying check-processing changes, the amendments to appendix A are effective

February 27, 2010. At that time, there will only be a single check- processing region for purposes of Regulation CC and there will no longer be any checks that are nonlocal. The Board is providing notice of the amendments at this time to give affected banks ample time to make any needed processing changes. Early notice also will enable affected banks to amend their availability schedules and related disclosures if necessary and provide their customers with notice of these changes.\2\

\2\ Section 229.18(e) of Regulation CC requires that banks notify account holders who are consumers within 30 days after implementing a change that improves the availability of funds.

Administrative Procedure Act

The public comment requirements of section 553(b) of the

Administrative Procedure Act do not apply to these amendments to

Appendix A of Regulation CC because the amendments involve matters of agency organization. The Monetary Control Act requires cost recovery for Federal Reserve Bank priced services over the long term, which from time to time necessitates changes in the internal organization of

Reserve Bank services in order to meet the statutory mandate. The rapid decline in paper check volumes, generally, and the decline in paper checks sent to the Reserve Banks for collection have significantly reduced the need for Federal Reserve check-processing locations and the ability of Reserve Banks to recover the costs of maintaining those locations. In order to achieve the Monetary Control Act requirement of long-run full cost recovery, the Reserve Banks have adjusted their check service infrastructure to reduce the number of check-processing regions. In light of the fact that the Reserve Banks are receiving a high percentage of checks electronically, the consolidation of check- processing centers is required in order to meet the mandate of the

Monetary Control Act. As a result of the consolidation of Federal

Reserve check-processing offices, amendments to Appendix A are necessary because the statutory and regulatory terms ``local'' and

``nonlocal'' are defined in terms of ``check-processing regions''--the geographic areas served by a Federal Reserve check-processing office.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR part 1320, appendix A.1), the Board has reviewed the final rule under authority delegated to the Board by the Office of Management and Budget. The

Page 220

amendments to appendix A of Regulation CC will delete the reference to the head office of the Federal Reserve Bank of Atlanta and reassign the routing symbols listed under that office to the head office of the

Federal Reserve Bank of Cleveland. The depository institutions that are located in the affected check-processing regions and that include the routing numbers in their disclosure statements would be required to notify customers of the resulting change in availability under Sec. 229.18(e). However, all paperwork collection procedures associated with

Regulation CC already are in place, and the Board accordingly anticipates that no additional burden will be imposed as a result of this rulemaking.

List of Subjects in 12 CFR Part 229

Banks, Banking, Reporting and recordkeeping requirements.

Authority and Issuance 0

For the reasons set forth in the preamble, the Board is amending 12 CFR part 229 to read as follows:

PART 229--AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS

(REGULATION CC) 0 1. The authority citation for part 229 continues to read as follows:

Authority: 12 U.S.C. 4001-4010, 12 U.S.C. 5001-5018. 0 2. In appendix A, the Fourth and Sixth District routing symbol lists are amended by removing the headings and listings for the Sixth Federal

Reserve District and revising the listings for the Fourth Federal

Reserve District to read as follows:

Appendix A to Part 229--Routing Number Guide to Next-Day Availability

Checks and Local Checks

* * * * *

Fourth Federal Reserve District

Federal Reserve Bank of Cleveland

Head Office 0110 \1\

2110 0111

2111 0112

2112 0113

2113 0114

2114 0115

2115 0116

2116 0117

2117 0118

2118 0119

2119 0210

2210 0211

2211 0212

2212 0213

2213 0214

2214 0215

2215 0216

2216 0219

2219 0220

2220 0223

2223 0260

2260 0280

2280 0310

2310 0311

2311 0312

2312 0313

2313 0319

2319 0360

2360 0410

2410 0412

2412 0420

2420 0421

2421 0422

2422 0423

2423 0430

2430 0432

2432 0433

2433 0434

2434 0440

2440 0441

2441 0442

2442 0510

2510 0514

2514 0515

2515 0519

2519 0520

2520 0521

2521 0522

2522 0530

2530 0531

2531 0532

2532 0539

2539 0540

2540 0550

2550 0560

2560 0570

2570 0610

2610 0611

2611 0612

2612 0613

2613 0620

2620 0621

2621 0622

2622 0630

2630 0631

2631 0632

2632 0640

2640 0641

2641 0642

2642 0650

2650 0651

2651 0652

2652 0653

2653 0654

2654 0655

2655 0660

2660 0670

2670 0710

2710 0711

2711 0712

2712 0719

2719 0720

2720 0724

2724 0730

2730 0739

2739 0740

2740 0749

2749 0750

2750 0759

2759 0810

2810 0812

2812 0813

2813 0815

2815 0819

2819 0820

2820 0829

2829 0830

2830 0839

2839 0840

2840 0841

2841 0842

2842 0843

2843 0863

2863 0865

2865 0910

2910 0911

2911 0912

2912 0913

2913 0914

2914 0915

2915 0918

2918 0919

2919 0920

2920 0921

2921 0929

2929 0960

2960 1010

3010 1011

3011 1012

3012 1019

3019 1020

3020 1021

3021 1022

3022 1023

3023 1030

3030 1031

3031 1039

3039 1040

3040 1041

3041 1049

3049 1070

3070 1110

3110 1111

3111 1113

3113 1119

3119 1120

3120 1122

3122 1123

3123 1130

3130 1131

3131 1140

3140 1149

3149 1163

3163 1210

3210 1211

3211 1212

3212 1213

3213 1220

3220 1221

3221 1222

3222 1223

3223 1224

3224 1230

3230 1231

3231 1232

3232 1233

3233 1240

3240 1241

3241 1242

3242 1243

3243 1250

3250 1251

3251

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1252

3252

\1\ The first two digits identify the bank's Federal Reserve District.

For example, 01 identifies the First Federal Reserve District

(Boston), and l2 identifies the Twelfth District (San Francisco).

Adding 2 to the first digit denotes a thrift institution. For example, 21 identifies a thrift in the First District, and 32 denotes a thrift in the Twelfth District.

* * * * *

By order of the Board of Governors of the Federal Reserve

System, acting through the Secretary of the Board under delegated authority, December 30, 2009.

Jennifer J. Johnson,

Secretary of the Board.

FR Doc. E9-31254 Filed 1-4-10; 8:45 am

BILLING CODE 6210-01-P