05-3419. 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 Detroit branch office of the Federal Reserve Bank of Chicago and reassign the Federal Reserve routing symbols currently listed under that office to the head office of the Federal Reserve Bank of Cleveland and delete the reference to the Houston branch office of the Federal Reserve Bank of Dallas and reassign the routing numbers listed under that office to 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.

DATES:

The amendments to appendix A under the Fourth and Seventh Federal Reserve Districts (Federal Reserve Banks of Cleveland and Chicago) are effective on April 16, 2005. The amendments to appendix A under the Eleventh Federal Reserve District (Federal Reserve Bank of Dallas) are effective on April 23, 2005.

FOR FURTHER INFORMATION CONTACT:

Jack K. Walton II, Assistant Director [phone], or Joseph P. Baressi, Senior Financial Services Analyst [phone], Division of Reserve Bank Operations and Payment Systems; or Adrianne G. Threatt, Counsel [phone], Legal Division. For users of Telecommunications Devices for the Deaf (TDD) only, contact [phone].

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 Detroit branch office of the Federal Reserve Bank of Chicago will cease processing checks on April 16, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Federal Reserve Bank of Cleveland's head office. The Houston branch office of the Federal Reserve Bank of Dallas will cease processing checks on April 23, 2005, and banks with routing symbols currently assigned to that office for check processing purposes will be reassigned to the Federal Reserve Bank of Dallas's head office. 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. Because the Cleveland check processing region will serve banks located in more than one Federal Reserve District, banks located in the expanded Cleveland check processing region cannot 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 Cleveland, Chicago, and Dallas to conform to the transfer of operations (1) from the Chicago Reserve Bank's Detroit branch office to the Cleveland Reserve Bank's head office and (2) from the Dallas Reserve Bank's Houston branch office to that Reserve Bank's head office. To coincide with the effective date of the underlying check processing changes, the amendments affecting the Federal Reserve Banks of Cleveland and Chicago are effective April 16, 2005, and the amendments affecting the Federal Reserve Bank of Dallas are effective April 23, 2005. 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 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 Detroit branch office of the Federal Reserve Bank of Chicago and reassign the routing symbols listed under that office to the head office of the Federal Reserve Bank of Cleveland and (2) delete the reference to the Houston branch office of the Federal Reserve Bank of Dallas and reassign the routing symbols listed under that office to the Dallas Reserve Bank's head office. 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. The Fourth, Seventh, 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 Check 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

0720  2720

0724  2724

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

Columbus Office

0440  2440

0441  2441

0442  2442

* * * * *

Seventh Federal Reserve District

[Federal Reserve Bank of Chicago]

Head Office

0710  2710

0711  2711

0712  2712

0719  2719

0750  2750

0759  2759

Des Moines Office

0730  2730

0739  2739

1040  3040

1041  3041

1049  3049

* * * * *

Eleventh Federal Reserve District

[Federal Reserve Bank of Dallas]

Head Office

1110  3110

1111  3111

1113  3113

1119  3119

1120  3120

1122  3122

1123  3123

1130  3130

1131  3131

1140  3140

1149  3149

1163  3163

* * * * *

By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority, February 16, 2005.

Robert deV. Frierson,

Deputy 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 http://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.