[Federal Register Volume 73, Number 5 (Tuesday, January 8, 2008)]
[Rules and Regulations]
[Pages 1267-1269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-6]



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 Rules and Regulations
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  Federal Register / Vol. 73, No. 5 / Tuesday, January 8, 2008 / Rules 
and Regulations  

[[Page 1267]]



FEDERAL RESERVE SYSTEM

12 CFR Part 229

[Regulation CC; Docket No. R-1306]


Availability of Funds and Collection of Checks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; technical amendment.

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SUMMARY: The Board of Governors (Board) is amending appendix A of 
Regulation CC to delete the reference to the Utica office of the 
Federal Reserve Bank of New York and reassign the Federal Reserve 
routing symbols currently listed under that office to the head office 
of the Federal Reserve Bank of Cleveland and the head office of the 
Federal Reserve Bank of Philadelphia. The Board is also amending 
appendix B of Regulation CC to delete the reference to the Utica 
office. In addition, the Board is providing advance notice of future 
amendments to appendix A that are anticipated in connection with the 
next phase of the Reserve Banks' restructuring of the check-processing 
operations within the Federal Reserve System.

DATES: The amendments to appendix A under the Second and Fourth Federal 
Reserve Districts (Federal Reserve Banks of New York and Cleveland) 
that revise the listings for the Utica office and the Cleveland head 
office are effective February 23, 2008.
    The amendment to appendix A under the Third Federal Reserve 
District (Federal Reserve Bank of Philadelphia) is effective March 29, 
2008. The removal of the second Federal Reserve District (Federal 
Reserve Bank of New York) is effective March 29, 2008.
    The revision of appendix B is effective March 29, 2008.

FOR FURTHER INFORMATION CONTACT: Jack K. Walton II, Associate Director 
(202/452-2660), or Joseph P. Baressi, Financial Services Project Leader 
(202/452-3959), Division of Reserve Bank Operations and Payment 
Systems; or Heatherun Sophia Allison (202/452-3565), Senior Counsel, 
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.\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.''
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    \1\ For purposes of Regulation CC, the term ``bank'' refers to 
any depository institution, including commercial banks, savings 
institutions, and credit unions.
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    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. 
Appendix B to Regulation CC reduces the generally permissible hold 
times for nonlocal check deposits collected between certain check-
processing regions from 5 days to 3 days due to generally faster 
collection times between these regions.

Final Amendments to Appendix A and Appendix B

    The Reserve Banks announced in June 2007 that the check-processing 
operations of the Utica office of the Federal Reserve Bank of New York 
would cease in the first quarter of 2008.\2\ Effective February 23, 
2008, banks with 0220, 2220, 0223, and 2223 routing symbols, currently 
assigned to the Utica office of the Federal Reserve Bank of New York 
for check-processing purposes, will be reassigned to the head office of 
the Federal Reserve Bank of Cleveland. On March 29, 2008, banks with 
0213 and 2213 routing symbols, also currently assigned to the Utica 
office for check-processing purposes, will be reassigned to the head 
office of the Federal Reserve Bank of Philadelphia.\3\ As a result of 
these changes, some checks that are drawn on and deposited in banks 
located in the affected check-processing regions and that currently are 
nonlocal checks will become local checks subject to faster availability 
schedules.
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    \2\ The Reserve Banks' June 2007 press release is available 
online at http://www.federalreserve.gov/newsevents/press/other/20070626a.htm.
    \3\ Banks in the current Utica, Cleveland, and Philadelphia 
check-processing regions should note that the Federal Reserve Banks' 
transfer of the Utica office's check-processing operations to both 
the Cleveland head office and the Philadelphia head office differs 
from the Reserve Banks' June 2007 announcement indicating that the 
Utica office's operations would be transferred to the Philadelphia 
head office. The Reserve Banks believe that this arrangement will 
better serve the needs of affected depository institutions.
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    The Board is amending the lists of routing symbols associated with 
the Federal Reserve Banks of New York, Philadelphia, and Cleveland to 
conform to the transfer of operations from the New York Reserve Bank's 
Utica office to the Cleveland and Philadelphia Reserve Banks' head 
offices. The amendments affecting the Federal Reserve Banks of New York 
and Cleveland that list the 0220, 2220, 0223, and 2223 routing symbols 
under the Cleveland head office are effective February 23, 2008. The 
amendments that list the 0213 and 2213 routing symbols under the 
Philadelphia head office and delete the appendix A reference to the 
Utica office are effective March 29, 2008. In addition, because the 
Utica check-processing region will no longer exist, the Board is 
deleting the appendix B reference to the Utica office, and these

[[Page 1268]]

amendments are also effective March 29, 2008.
    The Board believes that today's notice should provide banks ample 
time to make any needed processing changes before the effective date of 
the amendments, including allowing 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, however, 
intends to issue similar notices approximately sixty days prior to the 
elimination of check-processing operations at some other Reserve Bank 
offices, as described below.
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    \4\ Section 229.18(e) of Regulation CC requires banks to notify 
consumer account holders within 30 days after implementing a change 
that improves the availability of funds.
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Information About Anticipated Future Changes to Appendix A

    The Federal Reserve Banks announced in June 2007 \5\ additional 
planned reductions in the number of locations at which they will 
process checks. These steps were taken in response to the continued 
nationwide decline in check usage and to position the Reserve Banks 
more effectively to meet the cost recovery requirements of the Monetary 
Control Act of 1980. Between 2008 and early 2011, the Reserve Banks 
plan to cease check-processing operations at all of their check-
processing offices except four: Cleveland, Philadelphia, Atlanta, and 
Dallas. Listed below are the branches and offices from which and to 
which the Reserve Banks plan to transfer check-processing operations 
and the tentative timeframe for each transfer: \6\
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    \5\ See footnote two above.
    \6\ In addition, as the Reserve Banks announced in May 2006, the 
Reserve Banks plan to cease check-processing operations at the head 
office of the Federal Reserve Bank of Kansas City in the first half 
of 2008. (See http://www.federalreserve.gov/newsevents/press/other/20060531a.htm.) Rather than transfer Kansas City check-processing 
operations to the head office of the Federal Reserve Bank of St. 
Louis as they announced at that time, however, the Reserve Banks 
instead plan to transfer the Kansas City check-processing operations 
to the head office of the Federal Reserve Bank of Dallas. For 
updates on the Reserve Banks' check-processing plans, see http://www.frbservices.org/Retail/CheckProcessChanges2008.html.

----------------------------------------------------------------------------------------------------------------
                                       Branches and offices to which check
 Branches and offices that no longer       processing is planned to be        Tentative timeframe for transfer
        will  process checks                       transferred
----------------------------------------------------------------------------------------------------------------
Memphis, TN                           Atlanta, GA                           Third quarter 2008.
Cincinnati, OH                        Cleveland, OH                         Fourth quarter 2008.
Seattle, WA                           Dallas, TX                            Fourth quarter 2008.
Windsor Locks, CT                     Philadelphia, PA                      First quarter 2009.
Charlotte, NC                         Atlanta, GA                           Second quarter 2009.
Minneapolis, MN                       Cleveland, OH                         Third quarter 2009.
Baltimore, MD                         Philadelphia, PA                      Fourth quarter 2009.
Chicago, IL                           Cleveland, OH                         First quarter 2010.
Denver, CO                            Dallas, TX                            Second quarter 2010.
Jacksonville, FL                      Atlanta, GA                           Third quarter 2010.
Des Moines, IA                        Cleveland, OH                         Fourth quarter 2010.
Los Angeles, CA                       Dallas, TX                            Fourth quarter 2010.
St. Louis, MO                         Atlanta, GA                           First quarter 2011.
----------------------------------------------------------------------------------------------------------------

    The Board plans to amend appendix A in connection with each stage 
of the restructuring to delete the name of the office that will no 
longer process checks and transfer the affected Federal Reserve routing 
symbols to another check-processing office. The Board intends to 
provide notice of each stage of the restructuring and the associated 
amendments to appendix A approximately 60 days prior to the effective 
date of the amendment in order to give affected banks ample time to 
make processing changes and, if necessary, amend their availability 
schedules and related disclosures and provide their customers with 
notice of any changes to their availability schedules.

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 and appendix B 
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 section 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 Part 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 reference to the Utica office of the Federal Reserve 
Bank of New York and reassign the routing symbols listed under that 
office to the head offices of the Federal Reserve Banks of Philadelphia 
and Cleveland. The technical amendment to appendix B of Regulation CC 
will delete the reference to the Utica 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 Sec.  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

0
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)

0
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.


[[Page 1269]]



0
2. Effective February 23, 2008, the Second and Fourth 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

* * * * *

Second Federal Reserve District

[Federal Reserve Bank of New York]

Utica Office

0213
2213
* * * * *

Fourth Federal Reserve District

[Federal Reserve Bank of Cleveland]

Head Office

0220
0223
0410
0412
0430
0432
0433
0434
0440
0441
0720
0724
2220
2223
2410
2412
2430
2432
2433
2434
2440
2441
2720
2724

Cincinnati Branch

0420
0421
0422
0423
0442
0515
0519
0740
0749
0813
0830
0839
0863
2420
2421
2422
2423
2442
2515
2519
2740
2749
2813
2830
2839
2863
* * * * *

0
3. Effective March 29, 2008, the Second and Third Federal Reserve 
District routing symbol lists in appendix A are amended by removing the 
Second Federal Reserve District and revising the Third Federal Reserve 
District to read as follows:

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

* * * * *

Third Federal Reserve District

[Federal Reserve Bank of Philadelphia]

Head Office

0210
0212
0213
0214
0215
0216
0219
0260
0280
0310
0311
0312
0313
0319
0360
2210
2212
2213
2214
2215
2216
2219
2260
2280
2310
2311
2312
2313
2319
2360
* * * * *

0
4. Appendix B is revised to read as follows:

Appendix B to Part 229--Reduction of Schedules for Certain Nonlocal 
Checks

    A depositary bank that is located in the following check-
processing territories shall make funds deposited in an account by a 
nonlocal check described below available for withdrawal not later 
than the number of business days following the banking day on which 
funds are deposited, as specified below.

------------------------------------------------------------------------
                                                           Number of
                                                         business days
                Federal Reserve office                   following the
                                                       banking day funds
                                                         are deposited
------------------------------------------------------------------------
Kansas City 0865, 2865...............................                  3
------------------------------------------------------------------------


    By order of the Board of Governors of the Federal Reserve 
System, January 2, 2008.
Jennifer J. Johnson,
Secretary of the Board.
 [FR Doc. E8-6 Filed 1-7-08; 8:45 am]
BILLING CODE 6210-01-P