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 Dallas and to reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Cleveland. The Board is also amending the routing number guide to delete the reference to the Los Angeles branch office of the Federal Reserve Bank of San Francisco and to reassign the 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. The Board is also providing advance notice about anticipated future amendments in connection with the Reserve Banks' restructuring such that by early next year there will only be a single check-processing region for purposes of Regulation CC. Accordingly, at that time there will no longer be any checks that would be considered nonlocal.
DATES:
The amendments to appendix A to part 229 in amendatory instruction 2 are effective October 17, 2009.
The amendments to appendix A to part 229 in amendatory instruction 3 are effective November 14, 2009.
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:
Background
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 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.
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.
Final Amendments to Appendix A
On October 17, 2009, the Reserve Banks will transfer the check-processing operations of the head office of the Federal Reserve Bank of Dallas to the head office of the Federal Reserve Bank of Cleveland. On November 14, 2009, the Reserve Banks will transfer the check-processing operations of the Los Angeles branch office of the Federal Reserve Bank of San Francisco to the head office of the Federal Reserve Bank of Cleveland. As a result of these changes, some checks that are drawn on and deposited at banks located in the Dallas, Los Angeles, 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 Dallas, San Francisco, and Cleveland to reflect the transfer of check-processing operations from the Dallas head office and the Los Angeles branch office 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 October 17 and November 14, 2009, respectively. 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.
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.
Information About Anticipated Future Changes to Regulation CC
The Federal Reserve Banks initially announced in November 2008 that decreases in check volume necessitated transition to a single paper-check-processing site in order to comply with the cost recovery provisions of the Monetary Control Act. On July 31, 2009, the Reserve Banks reaffirmed that decreasing check-processing volume was likely to necessitate the transition to a single check-processing center by the first quarter of 2010. The Reserve Banks are taking these steps in response to the continued nationwide decline in check usage, as well as the rapidly increasing use of electronic check-clearing methods, and to meet the cost recovery requirements of the Monetary Control Act of 1980. For the information and planning needs of banks, the Board is today providing notice that, assuming check volumes continue to evolve in line with the Reserve Banks' expectations, the Reserve Banks intend to change their check-processing infrastructure such that by early next year there will be only a single check-processing region for purposes of Regulation CC. Accordingly, at that time there will no longer be any checks that would be considered nonlocal.
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 Dallas to Cleveland effective without 30 days advance publication. On August 14, 2009, the Federal Reserve Banks, by letter, informed depository institutions within Dallas's check-processing region of the October 17 transfer of check-processing operations from Dallas to Cleveland. That letter was then published on the Federal Reserve Financial Services' Web site. Accordingly, the affected depository institutions are aware of and making preparations for the transfer of paper check-processing operations from Dallas to Cleveland.
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 authority delegated to the Board by the Office of Management and Budget. The technical amendments to Appendix A of Regulation CC will delete the references to the head office of the Federal Reserve Bank of Dallas and the Los Angeles branch office of the Federal Reserve Bank of San Francisco and reassign the routing symbols listed under those offices 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, the Board believes that all procedures for notifying customers of any change in funds availability are in place, and therefore, 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
- 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. 4001-4010, 12 U.S.C. 5001-5018.
2. Effective October 17, 2009, the Fourth and Eleventh District routing symbol lists in appendix A are amended by removing the headings and listings for the Eleventh 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
0220-2220
0223-2223
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
0515-2515
0519-2519
0710-2710
0711-2711
0712-2712
0719-2719
0720-2720
0724-2724
0730-2730
0739-2739
0740-2740
0749-2749
0750-2750
0759-2759
0813-2813
0830-2830
0839-2839
0863-2863
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
3. Effective November 14, 2009, the Fourth and Twelfth District routing symbol lists in appendix A are amended by removing the headings and listings for the Twelfth 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
0220-2220
0223-2223
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
0515-2515
0519-2519
0710-2710
0711-2711
0712-2712
0719-2719
0720-2720
0724-2724
0730-2730
0739-2739
0740-2740
0749-2749
0750-2750
0759-2759
0813-2813
0830-2830
0839-2839
0863-2863
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
1252-3252
By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, October 8, 2009.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E9-24634 Filed 10-14-09; 8:45 am]
BILLING CODE 6210-01-P