[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23556]


[[Page Unknown]]

[Federal Register: September 23, 1994]


=======================================================================
-----------------------------------------------------------------------

FEDERAL RESERVE SYSTEM

12 CFR Part 229

[Regulation CC; Docket No. R-0847]

 

Availability of Funds and Collection of Checks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; technical amendment.

-----------------------------------------------------------------------

SUMMARY: The Board is publishing technical amendments to Appendices A 
and B-2 of Regulation CC. The amendments will conform Appendix A to a 
realignment in Federal Reserve check processing regions by adding the 
routing numbers formerly assigned to the Buffalo check processing 
region to the Utica check processing region. The amendments will also 
make other minor corrections to headings in Appendices A and B-2.

EFFECTIVE DATE: October 11, 1994.

FOR FURTHER INFORMATION CONTACT: Oliver Ireland, Associate General 
Counsel (202/452-3625), or Stephanie Martin, Senior Attorney (202/452-
3198), Legal Division. For the hearing impaired only: 
Telecommunications Device for the Deaf, Dorothea Thompson (202/452-
3544).

SUPPLEMENTARY INFORMATION: The Board's Regulation CC (12 CFR part 229) 
implements the Expedited Funds Availability Act (12 U.S.C. 4001 et 
seq.) and requires banks\1\ to make funds deposited into transaction 
accounts available for withdrawal within specified time frames. The Act 
and regulation allow banks to place longer holds on nonlocal checks 
than on local checks. A nonlocal check is one for which the paying 
bank\2\ is located in a different check processing region than the 
depositary bank. Regulation CC defines ``check processing region'' as 
``the geographical area served by an office of a Federal Reserve Bank 
for purposes of its check-processing activities.''\3\ Appendix A to 
Regulation CC lists the Federal Reserve check processing offices and 
the 4-digit routing number prefixes that are local to each office.
---------------------------------------------------------------------------

    \1\The term bank refers to any depository institution, including 
commercial banks, savings institutions, and credit unions.
    \2\The paying bank is the bank by, at, or through which a check 
is payable. The depositary bank is the first bank to which a check 
is transferred.
    \3\12 CFR 229.2(m). The Act's definition is substantially 
similar (12 U.S.C. 4001(9)).
---------------------------------------------------------------------------

    Effective October 11, 1994, the Federal Reserve Bank of New York 
will discontinue check processing at its Buffalo office and incorporate 
the Buffalo check processing region into the Utica check processing 
region. This consolidation is part of a larger effort by the Federal 
Reserve Bank of New York to achieve greater efficiency and cost savings 
in its check operations by consolidating systems, equipment, and 
operations. (In 1992 the Federal Reserve Bank of New York transferred 
its head office check processing operations to its Jericho office. The 
Board made corresponding changes to Appendix A of Regulation CC at that 
time. 58 FR 2, January 4, 1993.) Accordingly, the Board has amended the 
routing number list in Appendix A to reflect the Buffalo-Utica 
consolidation. The Board has also corrected mislabeled headings in 
Appendices A and B-2.
    Although the substance of Regulation CC will be unaffected by the 
amendment to Appendix A, the consolidation of check processing regions 
may require some banks to adjust their internal procedures. For 
example, checks deposited in the former Buffalo region will now be 
considered local checks in the Utica region (and vice versa). Banks 
that now distinguish between the Buffalo and Utica regions in assigning 
availability will need to realign their internal operating systems to 
reflect the consolidation. In addition, banks in the former Buffalo 
region, now part of the Utica region, will be subject to the reduction 
of schedules for certain nonlocal checks, as listed in Appendix B-2.\4\
---------------------------------------------------------------------------

    \4\Specifically, Appendix B-2 provides that nonlocal checks 
deposited in the Utica region bearing the 4-digit routing number 
prefixes ``0210'' and ``0280'' must be made available for withdrawal 
by the third business day following the banking day on which the 
checks were deposited.
---------------------------------------------------------------------------

    Banks also need to reflect any availability policy changes in their 
disclosures, as the availability for certain checks may be improved. 
Section 229.18(e) of Regulation CC provides that, in the case of an 
availability policy change that expedites the availability of funds, a 
bank shall send a notice of the change to holders of consumer accounts 
not later than 30 days after implementation.
    The amendments adopted by the Board are technical amendments that 
reflect the realignment of Federal Reserve check processing regions and 
are required by the statutory and regulatory definitions of ``check 
processing region.''
    Accordingly, 5 U.S.C. 553(b), requiring public comment, and 5 
U.S.C. 553(d), requiring a delayed effective date, do not apply.

Final Regulatory Flexibility Analysis

    The amendment will apply to all banks, regardless of size. There is 
no possible alternative rule for small banks, as ``check processing 
region'' is defined by the Expedited Funds Availability Act, which 
applies to all banks. The amendment will affect only those banks in the 
current Buffalo and Utica check processing regions that distinguish 
between checks drawn on paying banks located in those two regions for 
purposes of assigning availability. The Board expects that the majority 
of small institutions located in those two regions will be unaffected 
by the amendment.

List of Subjects in 12 CFR Part 229

    Banks, banking, Federal Reserve System, Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, 12 CFR part 229 is amended 
as follows:

PART 229--[AMENDED]

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

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

Appendix A to Part 229 [Amended]

    2. In Appendix A to part 229, under the heading ``SECOND FEDERAL 
RESERVE DISTRICT,'' the numbers appearing directly under the subheading 
``Buffalo Branch'' are transferred in numerical order under the 
subheading ``Utica Office'', the subheading ``Buffalo Branch'' is 
removed, and the subheading ``Cranford Office'' is revised to read 
``East Rutherford Office''.

Appendix B-2 to Part 229 [Amended]

    3. In Appendix B-2 to part 229, the subheading ``Cranford'' is 
revised to read ``East Rutherford''.

    By order of the Board of Governors of the Federal Reserve 
System, September 19, 1994.
William W. Wiles,
Secretary of the Board.
[FR Doc. 94-23556 Filed 9-22-94; 8:45 am]
BILLING CODE 6210-01-P