05-20661. 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 Oklahoma City branch office of the Federal Reserve Bank of Kansas City and reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Dallas and delete the reference to the Columbus office of the Federal Reserve Bank of Cleveland and reassign the routing symbols listed under that office to the Cincinnati branch office and the head office of that Reserve Bank. These amendments will ensure that the information in appendix A accurately describes the actual structure of check processing operations within the Federal Reserve System. The amendments to the routing symbol lists in appendix A under the Federal Reserve Bank of Cleveland differ from the Board's September 28, 2004, general advance notice. (See 69 FR 57837.)

DATES:

The amendments to appendix A under the Tenth and Eleventh Federal Reserve Districts (Federal Reserve Banks of Kansas City and Dallas) are effective on December 10, 2005. The amendments to appendix A under the Fourth Federal Reserve District (Federal Reserve Bank of Cleveland) that revise the listings for the Cincinnati Branch office and amend the listings for the Columbus office are effective January 21, 2006. The amendments to appendix A under the Fourth Federal Reserve District that revise the listings for the Cleveland head office and delete the remaining listings for the Columbus office are effective February 11, 2006.

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.^[1] 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 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.

As explained in detail in the Board's final rule published in the Federal Register on September 28, 2004, the Federal Reserve Banks have decided to reduce further the number of locations at which they process checks.^[2] The amendments set forth in this notice are part of a series of appendix A amendments related to that decision, and the Board will issue separate notices for each phase of the restructuring.^[3]

As part of the restructuring process, the Oklahoma City branch office of the Federal Reserve Bank of Kansas City will cease processing checks on December 10, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the head office of the Federal Reserve Bank of Dallas. Also as part of the restructuring process, on January 21, 2006, banks with 0442 and 2442 routing symbols, currently assigned to the Columbus office of the Federal Reserve Bank of Cleveland for check processing purposes, will be reassigned to the Cleveland Reserve Bank's Cincinnati branch office. On February 11, 2006, banks with 0440, 2440, 0441, and 2441 routing symbols, also currently assigned to the Columbus office for check processing purposes, will be reassigned to the Cleveland Reserve Bank's head office and the Columbus office will cease processing checks. Banks in the current Columbus, Cincinnati, and Cleveland check processing regions should note that the Reserve Banks' transfer of the Columbus office's check processing operations to both the Cincinnati branch office and the Cleveland head office differs from prior Federal Reserve Bank announcements indicating that the entirety of the Columbus office's operations would be transferred to the Cleveland head office. The Reserve Banks believe that this arrangement will better serve the needs of affected depository institutions. Because the Dallas, Cincinnati, and Cleveland check processing regions serve, or will serve as a result of these changes, banks located in multiple Federal Reserve districts, banks located in these regions cannot determine that a check is nonlocal solely because the paying bank for that check is located in another Federal Reserve district. As a result of these changes, some checks that are drawn on and deposited at banks located in the affected 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 banks, the Board accordingly is amending the lists of routing symbols associated with the Federal Reserve Banks of Cleveland, Kansas City, and Dallas to conform to the transfer of operations from the Kansas City Reserve Bank's Oklahoma City branch office to the Dallas Reserve Bank's head office and from the Cleveland Reserve Bank's Columbus office to that Reserve Bank's Cincinnati branch office and head office. To coincide with the effective date of the underlying check processing changes, the amendments affecting the Federal Reserve Banks of Kansas City and Dallas are effective December 10, 2005. The amendments affecting the Federal Reserve Bank of Cleveland that list the 0442 and 2442 routing symbols under the Cincinnati Branch office are effective January 21, 2006, and the amendments that list the 0440, 2440, 0441, and 2441 routing symbols under the head office and delete the reference to the Columbus office are effective February 11, 2006.

The Board is providing advance notice of these amendments to give affected banks ample time to make any needed processing changes. The advance 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.^[4] The Board is providing earlier-than-usual notice of the amendments to the appendix A routing symbol lists under the Federal Reserve Bank of Cleveland because these amendments differ from what was set forth in the September 28, 2004, general advance notice. 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 sixty days prior to the elimination of check operations at some other Reserve Bank offices, as described in the September 2004 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 appendix 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 § 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 1320 Appendix A.1), the Board has reviewed the final rule under authority delegated to the Board by the Office of Management and Budget. These technical amendments to appendix A of Regulation CC will (1) delete the reference to the Oklahoma City branch office of the Federal Reserve Bank of Kansas City and reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Dallas and (2) delete the reference to the Columbus office of the Federal Reserve Bank of Cleveland and reassign the routing symbols listed under that office to the Cincinnati Branch office and the head office of that Reserve Bank. 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.

12 CFR Chapter II

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 December 10, 2005, the Tenth and Eleventh 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

* * * * *

Tenth Federal Reserve District

[Federal Reserve Bank of Kansas City]

Head Office

1010   3010

1011   3011

1012   3012

1019   3019

Denver Branch

1020   3020

1021   3021

1022   3022

1023   3023

1070   3070

1240   3240

1241   3241

1242   3242

1243   3243

Eleventh Federal Reserve District

[Federal Reserve Bank of Dallas]

Head Office

1030   3030

1031   3031

1039   3039

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 January 21, 2006, the Fourth Federal Reserve District routing symbol list in Appendix A is amended by removing the listings for 0442 and 2442 from the Columbus office and by revising the Cincinnati listings to read as follows:

Appendix A To Part 229—Routing Number Guide To Next-Day Availability Checks and Local Checks

* * * * *

Fourth Federal Reserve District

* * * * *

Cincinnati Branch

0420   2420

0421   2421

0422   2422

0423   2423

0442   2442

0515   2515

0519   2519

0740   2740

0749   2749

0813   2813

0830   2830

0839   2839

0863   2863

* * * * *

4. Effective February 11, 2006, the Fourth Federal Reserve District routing symbol list in Appendix A is amended by deleting the remaining listings and heading for the Columbus office, and revising the listings for the Cleveland head office 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

0440   2440

0441   2441

0720   2720

0724   2724

* * * * *

By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, October 11, 2005.

Jennifer J. Johnson,

Secretary of the Board.

Footnotes

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

2.  See 69 FR 57837, September 28, 2004.

3.  In addition to the general advance notice of future amendments provided by the Board, and the Board's notices of final amendments, the Reserve Banks are striving to inform affected depository institutions of the exact date of each office transition at least 120 days in advance. The Reserve Banks' communications to affected depository institutions are available at www.frbservices.org.

4.  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.