[Federal Register: May 28, 2003 (Volume 68, Number 102)]
[Rules and Regulations]
[Page 31592-31596]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28my03-3]
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FEDERAL RESERVE SYSTEM
12 CFR Part 229
[Regulation CC; Docket No. R-1150]
Availability of Funds and Collection of Checks
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board of Governors is publishing a final amendment to
appendix A of Regulation CC that updates the routing numbers for
Federal Reserve Banks and Federal Home Loan Banks. Banks generally must
provide next-day or second-day availability for checks drawn on these
routing numbers. This amendment also reorganizes and clarifies existing
information in the introductory material preceding the routing number
list.
The Board also is providing information about a series of future
amendments that the Board will make to appendix A to reflect the
restructuring of check processing functions within the Federal Reserve
System. These amendments collectively will reduce
[[Page 31593]]
the number of check processing regions listed in appendix A from 44 to
32, thereby resulting in more checks in the affected regions being
local to one another. These amendments will take effect on a staggered
basis beginning in the second half of 2003 and ending in late 2004. The
Board will publish each amendment in the Federal Register at least 60
days before the effective date.
DATES: The final rule will become effective on July 28, 2003.
FOR FURTHER INFORMATION CONTACT: Jack K. Walton II, Assistant Director
(202/452-2660), Michele Braun, Manager (202/452-2819), or Jeffrey S. H.
Yeganeh, Senior Financial Services Analyst (202/728-5801), Division of
Reserve Bank Operations and Payment Systems; or Adrianne G. Threatt,
Counsel (202/452-3554), Legal Division; for users of Telecommunications
Devices for the Deaf (TDD) only, contact 202/263-4869.
SUPPLEMENTARY INFORMATION:
Background
Regulation CC establishes the maximum period a bank may wait
between receiving a deposit and making the deposited funds available
for withdrawal.\1\
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\1\ For purposes of Regulation CC, the term ``bank'' refers to
any depository institution, including commercial banks, savings
institutions, and credit unions.
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Generally, a bank must make funds available for withdrawal within
one or two days of deposit if the funds are deposited by certain types
of checks that have a relatively low risk of being returned and the
deposit meets the other conditions described at Sec. 229.10(c) of
Regulation CC.\2\ Items generally subject to next- or second-day
availability include checks drawn on the U.S. Treasury; U.S. Postal
Service money orders; checks drawn on a Federal Reserve Bank or a
Federal Home Loan Bank; checks drawn by a state or unit of general
local government; cashier's, certified, or teller's checks; and checks
drawn on the same branch or another branch of the depositary bank if
both branches are located within the same Federal Reserve check
processing region. A depositary bank also must give next-day
availability for up to the first $100 of any check or checks deposited
on the same banking day that are not otherwise subject to the next-day
availability rule.
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\2\ Other requirements for next-day availability are that the
check be deposited in person to an employee of the depositary bank
into an account held by the payee of a check. In some cases, next-
day availability also requires the use of a special deposit slip
and, in the case of a check issued by a state government or unit
thereof, that the depositary bank be located in the state in which
the check was issued. If a deposit meets all the requirements for
next-day availability except that it was not made in person to an
employee of the bank, the check is entitled to second-day
availability. Otherwise, the check is subject to the general
availability schedule at 12 CFR 229.12 that applies to local and
nonlocal checks. In addition, banks may invoke the exception holds
described at 12 CFR 229.13 with respect to checks that generally are
subject to next-day or second-availability.
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For checks that are not subject to the next- or second-day
availability rules discussed above, depositary banks generally must
provide faster availability for funds deposited by a ``local check''
than by a ``nonlocal check''. A check drawn on a bank is considered
local if it is payable by or at a bank located in the same Federal
Reserve check processing region as the depositary bank. A check drawn
on a nonbank is considered local if it is payable through a bank
located in the same Federal Reserve check processing region as the
depositary bank. Otherwise, a check is nonlocal.
Appendix A to Regulation CC contains a routing number guide that
assists banks in determining the maximum permissible hold periods for
most deposited checks.\3\ The appendix lists the 9-digit routing
numbers for U.S. Treasury checks, postal money orders, and checks drawn
on Federal Reserve Banks and Federal Home Loan Banks. Appendix A also
lists each Federal Reserve check processing office and the first four
digits of the routing numbers, known as the Federal Reserve routing
symbol, of the banks that are served by that office. 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.
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\3\ Official checks (certified, cashier's and teller's checks)
are the exception, because they are identified by routing number
information that is not included in the appendix.
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Final Amendment to Appendix A
Over the past few years, the Federal Reserve Banks and Federal Home
Loan Banks have changed their check-related operations, including the
routing numbers they use. The Board accordingly is updating appendix A
to delete retired routing numbers and insert newly added ones.
With respect to the Federal Reserve Bank routing number list, the
Board is deleting routing numbers 0112 0048 8 and 0214 0950 9;
correcting the placement of two existing routing numbers, 0220 0026 6
and 0519 0002 3; and adding a new routing number, 0711 0711 0.
With respect to the Federal Home Loan Bank routing number list, the
Board is deleting the following numbers: 0640 0091 0; 0654 0348 0; 0724
1338 2; 0820 0125 0; 1020 0603 8; 1030 0362 9; 1040 0019 7; 1130 1750
8; 1211 3994 4; and 1222 4014 6. In addition, the Board is adding the
following numbers: 0430 1862 2 and 1240 0287 4.
The Board also has reorganized and clarified the existing
introductory text of appendix A.
These amendments become effective July 28, 2003.
Information About Future Changes to Appendix A
A Federal Reserve study released in 2002 found that the number of
checks written in the United States had declined from approximately 50
billion annually in the mid-1990s to about 40 billion annually in 2002.
Correspondingly, the number of checks processed by the Federal Reserve
Banks has also declined in recent years. The Federal Reserve Banks have
decided to reduce the number of locations at which they process checks
in response to this changing trend in check usage and to position
themselves more effectively to meet the cost recovery requirements of
the Monetary Control Act of 1980. Thirteen Reserve Bank offices will no
longer process checks, and the checks currently processed at those
offices will be processed at other nearby offices, as follows:
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Offices that will no longer process Offices to which check
checks: processing will be transferred
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Pittsburgh, PA Cleveland, OH
Richmond, VA Baltimore, MD
Charleston, WV Cincinnati, OH
Columbia, SC Charlotte, NC
Miami, FL Jacksonville, FL
Indianapolis, IN Cincinnati, OH
Milwaukee, WI Chicago, IL
Peoria, IL\4\ Chicago, IL
Little Rock, AR Memphis, TN
Louisville, KY Cincinnati, OH
Omaha, NE Des Moines, IA
El Paso, TX Dallas, TX
San Antonio, TX Dallas, TX
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\4\ The Peoria office does not serve a separate check processing region.
Rather, it is a satellite office of the Federal Reserve Bank of
Chicago that is located in the Chicago check processing region.
Because this restructuring will reduce the number of check
processing regions, some banks that now are nonlocal to one another
will become local. As a result, the status of some nonlocal checks in
the affected regions will change. Specifically, some checks that are
drawn on and deposited at banks located in the affected regions that
currently are nonlocal checks will become local checks subject to
faster
[[Page 31594]]
availability schedules. Banks in the affected regions therefore might
need to realign their internal operating systems to reflect the
restructuring. Depending on their funds availability practices, banks
also might need to modify their funds availability schedules and
related disclosures to reflect any improved availability of funds
resulting from the restructuring. Section 229.18(e) of Regulation CC
requires that banks notify account holders who are consumers within 30
days of implementing a change that improves the availability of funds.
The restructuring of Reserve Bank check processing operations will
take place in several phases, beginning in the second half of 2003 and
ending in late 2004. The Board will amend appendix A in connection with
each phase of the restructuring to delete the name of the office(s)
that will no longer process checks and transfer the affected Federal
Reserve routing symbols to another check processing office.\5\ The
Board will announce each phase of the restructuring and the associated
amendments to appendix A at least 60 days prior to the effective date
of the amendment in order to give affected banks ample time to make
processing changes, and, if necessary, amend their availability
schedules and related disclosures and provide their customers with
notice of any changes to their availability schedules.
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\5\ Appendix A to Regulation CC has been amended on several
occasions in the past to reflect the restructuring of the Reserve
Banks' check processing operations. In 1994, the Utica regional
check processing center began serving the Buffalo check processing
territory (59 FR 48789, Sept. 23, 1994). In 1996, the East
Rutherford operations center began serving the Jericho check
processing territory (61 FR 25389, May 21, 1996). In 1997, the
Boston head office began serving the Lewiston check processing
territory (62 FR 26220, May 13, 1997).
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[[Page 31595]]
Some affected banks might prefer to make some or all of their
processing and availability changes prior to the effective dates of the
relevant amendments. For the information and planning needs of affected
banks, the Board today is describing below all the Federal Reserve
routing symbol changes to appendix A that will be made between now and
the end of 2004.
1. Cleveland.
The operations of the Pittsburgh branch will be transferred such
that banks with the following Federal Reserve routing symbols will be
local to the Cleveland head office:
0410 2410
0412 2412
0430 2430
0432 2432
0433 2433
0434 2434
2. Cincinnati.
The operations of the Charleston and Indianapolis offices and the
Louisville branch will be transferred such that banks with the
following Federal Reserve routing symbols will be local to the
Cincinnati branch:
0420 2420
0421 2421
0422 2422
0423 2423
0515 2515
0519 2519
0740 2740
0749 2749
0813 2813
0830 2830
0839 2839
0863 2863
3. Baltimore.
The operations of the Richmond head office will be transferred such
that banks with the following Federal Reserve routing symbols will be
local to the Baltimore branch:
0510 2510
0520 2520
0521 2521
0522 2522
0540 2540
0550 2550
0560 2560
0570 2570
4. Charlotte.
The operations of the Columbia office will be transferred such that
banks with the following Federal Reserve routing symbols will be local
to the Charlotte branch:
0530 2530
0531 2531
0532 2532
0539 2539
5. Jacksonville.
The operations of the Miami branch will be transferred such that
banks with the following Federal Reserve routing symbols will be local
to the Jacksonville branch:
0630 2630
0631 2631
0632 2632
0660 2660
0670 2670
6. Chicago.
The operations of the Milwaukee office will be transferred such
that banks with the following Federal Reserve routing symbols will be
local to the Chicago head office:
0710 2710
0711 2711
0712 2712
0719 2719
0750 2750
0759 2759
7. Des Moines.
The operations of the Omaha branch will be transferred such that
banks with the following Federal Reserve routing symbols will be local
to the Des Moines office:
0730 2730
0739 2739
1040 3040
1041 3041
1049 3049
8. Memphis.
The operations of the Little Rock branch will be transferred such
that banks with the following Federal Reserve routing symbols will be
local to the Memphis branch:
0820 2820
0829 2829
0840 2840
0841 2841
0842 2842
0843 2843
9. Dallas.
The operations of the El Paso and San Antonio branches will be
transferred such that banks with the following Federal Reserve routing
symbols will be local to the Dallas head office:
1110 3110
1111 3111
1113 3113
1119 3119
1120 3120
1122 3122
1123 3123
1140 3140
1149 3149
1163 3163
The Federal Reserve routing symbols assigned to all other Federal
Reserve branches and offices will remain the same.
Administrative Procedure Act
The Board has not followed the provisions of 5 U.S.C. 553(b)
relating to notice and public participation in connection with the
adoption of the final rule. The revisions to the introductory language
and routing number lists are technical in nature. In addition, the
routing number revisions are required by the statutory and regulatory
definitions of ``check-processing region.'' Because there is no
substantive change on which to seek public input, the Board accordingly
has determined that the Sec. 553(b) notice and comment procedures are
unnecessary.
Regulatory Flexibility Act Certification
Pursuant to section 605(b) of the Regulatory Flexibility Act (5
U.S.C. 605(b)), the Board certifies that the final rule will not have a
significantly adverse economic impact on a substantial number of small
entities. These amendments are technical, and the routing number
changes are required by law. Moreover, these amendments apply to all
banks regardless of their size. Many small banks generally provide
next-day availability for all checks and will not be affected by this
amendment. For the subset of small banks that does distinguish between
checks subject to next-day availability and those subject to longer
holds, the final rule should necessitate only minimal programming
changes. Some of these affected banks might also have to modify their
funds availability disclosures and notify both new and existing
customers of the modified funds availability schedules.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR 1320 Appendix A.1), the Board has reviewed the final rule
under the authority delegated to the Board by the Office of Management
and Budget. The final rule contains no new collections of information
and proposes no substantive changes to existing collections of
information pursuant to the Paperwork Reduction Act.
12 CFR Chapter II
List of Subjects in 12 CFR Part 229
Banks, Banking, Federal Reserve System, 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:
[[Page 31596]]
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 et seq.
0
2. Appendix A to Part 229 is amended as follows:
a. Introductory paragraphs A and B are revised and a new paragraph
C is added.
b. The heading and text of the Federal Reserve Offices routing list
are revised.
c. The Federal Home Loan Banks routing list is revised.
The additions and revisions read as follows:
Appendix A to Part 229--Routing Number Guide to Next-Day Availability
Checks and Local Checks.
A. Each bank is assigned a routing number by Thomson Financial
Publishing Inc., as agent for the American Bankers Association. The
routing number takes two forms: a fractional form and a nine-digit
form. A paying bank generally is identified on the face of a check
by its routing number in both the fractional form (which generally
appears in the upper right-hand corner of the check) and the nine-
digit form (which is printed in magnetic ink along the bottom of the
check). Where a check is payable by one bank but payable through
another bank, the routing number appearing on the check is that of
the payable-through bank, not the payor bank.
B. The first four digits of the nine-digit routing number (and
the denominator of the fractional routing number) form the ``Federal
Reserve routing symbol,'' and the first two digits of the routing
number identify the Federal Reserve District in which the bank is
located. Thus, 01 will be the first two digits of the routing number
of a bank in the First Federal Reserve District (Boston), and 12
will be the first two digits of the routing number of a bank in the
Twelfth District (San Francisco). Adding 2 to the first digit
denotes a thrift institution. Thus, 21 identifies a thrift in the
First District, and 32 denotes a thrift in the Twelfth District.
C. Each Federal Reserve check processing office is listed below,
followed by the Federal Reserve routing symbols of the banks that
are located within the check-processing region served by that
office. Because some check processing regions cross Federal Reserve
District lines, there are some cases in which banks in different
Federal Reserve Districts are located in the same check-processing
region and therefore considered local to each other. For example,
banks in Fairfield County, Connecticut are located in Second
District and have Second District routing numbers (0211 or 2211),
but the Windsor Locks office of the First District processes the
checks of these banks. Thus, as indicated below, checks drawn on
banks with 0211 or 2211 routing numbers would be local for First
District banks served by the Windsor Locks office but would be
nonlocal for other Second District depositary banks.
* * * * *
FEDERAL RESERVE BANKS
0110 0001 5 0720 0029 0
0111 0048 1 0730 0033 8
0210 0120 8 0740 0020 1
0212 0400 5 0750 0012 9
0213 0500 1 0810 0004 5
0220 0026 6 0820 0013 8
0310 0004 0 0830 0059 3
0410 0001 4 0840 0003 9
0420 0043 7 0910 0008 0
0430 0030 0 0920 0026 7
0440 0050 3 1010 0004 8
0510 0003 3 1020 0019 9
0519 0002 3 1030 0024 0
0520 0027 8 1040 0012 6
0530 0020 6 1110 0003 8
0539 0008 9 1120 0001 1
0610 0014 6 1130 0004 9
0620 0019 0 1140 0072 1
0630 0019 9 1210 0037 4
0640 0010 1 1220 0016 6
0650 0021 0 1230 0001 3
0660 0010 9 1240 0031 3
0710 0030 1 1250 0001 1
0711 0711 0
FEDERAL HOME LOAN BANKS
0110 0053 6 0740 0101 9
0212 0639 1 0810 0091 9
0260 0973 9 0910 0091 2
0410 0291 5 1010 0091 2
0420 0091 6 1011 0194 7
0430 0143 5 1110 1083 7
0430 1862 2 1119 1083 0
0610 0876 6 1210 0070 1
0710 0450 1 1240 0287 4
0730 0091 4 1250 0050 3
By order of the Board of Governors of the Federal Reserve
System, May 20, 2003.
Jennifer J. Johnson
Secretary of the Board.
[FR Doc. 03-13030 Filed 5-27-03; 8:45 am]
BILLING CODE 6210-01-S