E9-10507. 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 (Board) is amending the routing number guide to next-day availability checks and local checks in Regulation CC to delete the reference to the Seattle branch office of the Federal Reserve Bank of San Francisco and to reassign the Federal Reserve routing symbols currently listed under that office to the Los Angeles branch office of the Federal Reserve Bank of San Francisco. The Board is also amending the routing number guide to delete the reference to the Denver branch office of the Federal Reserve Bank of Kansas City and to reassign the routing symbols currently listed under that office to the Los Angeles branch office of the Federal Reserve Bank of San Francisco and to the head office of the Federal Reserve Bank of Dallas. These amendments reflect the restructuring of check-processing operations within the Federal Reserve System.

DATES:

The effective date for amendatory instruction 2, amending 12 CFR Part 229 Appendix A is June 20, 2009, and the effective date for amendatory instruction 3, further amending 12 CFR Part 229 Appendix A is June 27, 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:

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 June 20, 2009, the Reserve Banks will transfer the check-processing operations of the Seattle branch office of the Federal Reserve Bank of San Francisco to the Los Angeles branch office of the Federal Reserve Bank of San Francisco. On June 27, 2009, the Reserve Banks will transfer the check-processing operations of the Denver branch office of the Federal Reserve Bank of Kansas City to the Los Angeles branch office of the Federal Reserve Bank of San Francisco and to the head office of the Federal Reserve Bank of Dallas. 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 checks and making funds availability decisions, the Board is amending the list of routing symbols in appendix A associated with the Federal Reserve Bank of San Francisco to reflect the transfer of check-processing operations from the Seattle branch office to the Los Angeles branch office. The Board is also amending the lists of routing symbols in appendix A associated with the Federal Reserve Banks of Kansas City, Dallas, and San Francisco to reflect the transfer of check-processing operations from the Denver branch office to the Los Angeles branch office and the Dallas head office. Specifically, the Denver branch office routing symbols formerly associated with the Salt Lake City branch office (1240, 1241, 1242, 1243, 3240, 3241, 3242, 3243) will be listed under the Los Angeles branch office, and the remainder of the Denver branch office routing symbols, including the routing symbols formerly associated with the Helena branch office (0920, 0921, 0929, 2920, 2921, 2929, 1020, 1021, 1022, 1023, 1070, 3020, 3021, 3022, 3023, 3070), will be listed under the Dallas head office. To coincide with the effective date of the underlying check-processing changes, the amendments to appendix A regarding the transfer of check-processing operations from Seattle to Los Angeles are effective June 20, 2009. The amendments to the appendix regarding the transfer of check-processing operations from Denver to Los Angeles and Dallas are effective June 27, 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 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 the final rule. The revisions to appendix A are technical in nature and 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. In addition, the underlying consolidation of Federal Reserve Bank check-processing offices involves a matter relating to agency management, which is exempt from notice and comment procedures.

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 (i) delete the reference to the Seattle branch office of the Federal Reserve Bank of San Francisco and reassign the routing symbols listed under that office to the Los Angeles branch office of the Federal Reserve Bank of San Francisco, and (ii) delete the reference to the Denver branch office of the Federal Reserve Bank of Kansas City and reassign the routing symbols listed under that office to the Los Angeles branch office of the Federal Reserve Bank of San Francisco and to the head office of the Federal Reserve Bank of Dallas. 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.

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 June 20, 2009, the Twelfth District routing symbol list in appendix A is revised to read as follows:

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

* * * * *

Twelfth Federal Reserve District

[Federal Reserve Bank of San Francisco]

Los Angeles Branch

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
1250	3250
1251	3251
1252	3252

* * * * *

3. Effective June 27, 2009, the Tenth, Eleventh, and Twelfth District routing symbol lists in appendix A are amended by removing the headings and listings for the Tenth Federal Reserve District and revising the listings for the Eleventh and Twelfth Federal Reserve Districts to read as follows:

* * * * *

Eleventh Federal Reserve District

[Federal Reserve Bank of Dallas]

Head Office

0920	2920
0921	2921
0929	2929
1010	3010
1011	3011
1012	3012
1019	3019
1020	3020
1021	3021
1022	3022
1023	3023
1030	3030
1031	3031
1039	3039
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

Twelfth Federal Reserve District

[Federal Reserve Bank of San Francisco]

Los Angeles Branch

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, May 1, 2009.

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.  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.