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Rule

Availability of Funds and Collection of Checks

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AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Final rule; technical amendment.

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 Philadelphia 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.

DATES:

The final rule will become effective on December 12, 2009.

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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.

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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.

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 December 12, 2009, the Reserve Banks will transfer the check-processing operations of the head office of the Federal Reserve Bank of Philadelphia 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 Philadelphia 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 Philadelphia and Cleveland to reflect the transfer of check-processing operations from the head office of the Federal Reserve Bank of Philadelphia 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 December 12, 2009. 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]

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 and the accompanying amendments to Appendix A of Regulation CC are required by law. 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.

In addition, the Board finds, in accordance with APA section 553(d), good cause for making the amendments to Appendix A relating to the transfer of check-processing operations from Philadelphia to Cleveland effective without 30 days advance publication. On October 14, 2009, the Federal Reserve Banks, by letter, informed depository institutions within Philadelphia's check-processing region of the December 12 transfer of check-Start Printed Page 58538processing operations from Philadelphia to Cleveland. That letter was then published on the Federal Reserve Financial Services' website. Accordingly, the affected depository institutions are aware of and making preparations for the transfer of paper check-processing operations from Philadelphia to Cleveland.

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 technical amendments to appendix A of Regulation CC will delete the reference to the head office of the Federal Reserve Bank of Philadelphia 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 § 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.

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List of Subjects in 12 CFR Part 229

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Authority and Issuance

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For the reasons set forth in the preamble, the Board is amending

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PART 229—AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS (REGULATION CC)

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1. The authority citation for part 229 continues to read as follows:

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Authority: 12 U.S.C. 4001-4010, 12 U.S.C. 5001-5018.

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2. In appendix A, remove introductory paragraph C and the headings and listings for the Third Federal Reserve District, and revise the listing for the Fourth Federal Reserve District to read as follows:

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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

1 01102110
01112111
01122112
01132113
01142114
01152115
01162116
01172117
01182118
01192119
02102210
02112211
02122212
02132213
02142214
02152215
02162216
02192219
02202220
02232223
02602260
02802280
03102310
03112311
03122312
03132313
03192319
03602360
04102410
04122412
04202420
04212421
04222422
04232423
04302430
04322432
04332433
04342434
04402440
04412441
04422442
05102510
05142514
05152515
05192519
05202520
05212521
05222522
05402540
05502550
05602560
05702570
07102710
07112711
07122712
07192719
07202720
07242724
07302730
07392739
07402740
07492749
07502750
07592759
08132813
08302830
08392839
08632863
09102910
09112911
09122912
09132913
09142914
09152915
09182918
09192919
09202920
09212921
09292929
09602960
10103010
10113011
10123012
10193019
10203020
10213021
10223022
10233023
10303030
10313031
10393039
10403040
10413041
10493049
10703070
11103110
11113111
11133113
11193119
11203120
11223122
11233123
11303130
11313131
11403140
11493149
11633163
12103210
12113211
12123212
12133213
12203220
12213221
12223222
12233223
12243224
12303230
12313231
12323232
12333233
12403240
12413241
12423242
12433243
12503250
12513251
12523252
1 The first two digits identify the bank's Federal Reserve District. For example, 01 identifies the First Federal Reserve District (Boston), and 12 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.
* * * * *
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By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, November 6, 2009.

Jennifer J. Johnson,

Secretary of the Board.

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Footnotes

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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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.

Back to Citation

[FR Doc. E9-27189 Filed 11-12-09; 8:45 am]

BILLING CODE 6210-01-P