Availability of Funds and Collection of Checks

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Final rule; technical amendment.

SUMMARY:

The Board of Governors is amending appendix A of Regulation CC to delete the reference to the Charleston check processing office of the Federal Reserve Bank of Richmond and reassign the Federal Reserve routing symbols currently listed under that office to the Cincinnati 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 June 26, 2004.

FOR FURTHER INFORMATION CONTACT:

Jack K. Walton II, Assistant Director (202) 452-2660), or Joseph P. Baressi, Senior Financial Services Analyst (202) 452-3959), 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:

Regulation CC establishes the maximum period a depositary bank may wait between receiving a deposit and making the deposited funds available for withdrawal. A depositary bank 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. Checks that do not meet the requirements for “local” checks are considered “nonlocal.”

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. 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.

As explained in detail in the Board's final rule published in the Federal Register on May 28, 2003, the Federal Reserve Banks decided in early 2003 to reduce the number of locations at which they process checks. As part of this restructuring process, the Charleston office of the Federal Reserve Bank of Richmond will cease processing checks on June 26, 2004. As of that date, banks with routing symbols currently assigned to the Charleston office for check processing purposes will be reassigned to the Cincinnati 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 Charleston and Cincinnati check processing regions and that currently are nonlocal checks will become local checks subject to faster availability schedules. Also, after June 26, 2004, the restructured Cincinnati check processing region will cross Federal Reserve District lines. Banks located in that region therefore no longer will be able to determine that a check is nonlocal solely because the paying bank for that check is located in another Federal Reserve District.

To assist banks in identifying local and nonlocal banks, the Board accordingly is amending the lists of routing symbols associated with the Federal Reserve Banks of Richmond and Cleveland to reflect the transfer of operations from the Federal Reserve Bank of Richmond's Charleston office to the Federal Reserve Bank of Cleveland's Cincinnati office. These amendments are effective June 26, 2004, to coincide with the effective date of the underlying check processing changes. The Board is providing advance notice of these amendments to give affected banks ample time to make any needed processing changes. The advance notice will also enable affected banks to amend their availability schedules and related disclosures, if necessary, and provide their customers with notice of these changes. The Federal Reserve routing symbols assigned to all other Federal Reserve branches and offices will remain the same at this time. The Board of Governors, however, intends to issue similar notices at least 60 days prior to the elimination of check operations at some other Reserve Bank offices, as described in the May 2003 Federal Register document.

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 this final rule. The revisions to the appendices are technical in nature, and the routing symbol 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 has determined that the section 553(b) notice and comment procedures are unnecessary.

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. This technical amendment to appendix A of Regulation CC will delete the reference to the Charleston check processing office of the Federal Reserve Bank of Richmond and reassign the routing symbols listed under that office to the Cincinnati 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, because all paperwork collection procedures associated with Regulation CC already are in place, the Board anticipates that no additional burden will be imposed as a result of this rulemaking.

List of Subjects in 12 CFR Part 229

• Banks
• Banking
• Federal Reserve System
• Reporting and recordkeeping requirements

Authority and Issuance

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)

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

Authority: 12 U.S.C. 4001 et seq.

2. The Fourth and Fifth Federal Reserve District routing symbol lists in appendix A are revised 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

0410  2410

0412  2412

0430  2430

0432  2432

0433  2433

0434  2434

Cincinnati Branch

0420  2420

0421  2421

0422  2422

0423  2423

0515  2515

0519  2519

Columbus Office

0440  2440

0441  2441

0442  2442

Fifth Federal Reserve District

[Federal Reserve Bank of Richmond]

Baltimore Branch

0510  2510

0514  2514

0520  2520

0521  2521

0522  2522

0540  2540

0550  2550

0560  2560

0570  2570

Charlotte Branch

0530  2530

0531  2531

Columbia Office

0532  2532

0539  2539