[Federal Register Volume 69, Number 187 (Tuesday, September 28, 2004)]
[Rules and Regulations]
[Pages 57837-57839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21632]



[[Page 57837]]

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FEDERAL RESERVE SYSTEM

12 CFR Part 229

[Regulation CC; Docket No. R-1212]


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 is amending appendix A of Regulation CC 
to delete the reference to the Indianapolis check processing office of 
the Federal Reserve Bank of Chicago and reassign the Federal Reserve 
routing symbols currently listed under that office to the Cincinnati 
branch of the Federal Reserve Bank of Cleveland. This amendment is the 
last in a series of amendments to the appendix associated with the 
restructuring of check processing operations that the Reserve Banks 
announced in February 2003. The Board also is providing advance notice 
about a series of future amendments to appendix A in connection with 
the next phase of the Reserve Banks' restructuring of the check 
processing operations within the Federal Reserve System. This future 
restructuring and the associated amendments to appendix A will take 
effect on a staggered basis beginning in 2005 and ending in early 2006.

DATES: The final rule will become effective on October 30, 2004.

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:

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.

Final Amendment to Appendix A

    As explained in detail in the Board's final rule published in the 
Federal Register on May 28, 2003, the Federal Reserve Banks decided in 
early 2003 to reduce the number of locations at which they process 
checks.\2\ As part of this restructuring process, effective October 30, 
2004, the Indianapolis office of the Federal Reserve Bank of Chicago 
will cease processing checks and banks with routing symbols currently 
assigned to that office for check processing purposes will be 
reassigned to the Cincinnati branch of the Federal Reserve Bank of 
Cleveland. This is the last stage of the restructuring process 
announced in 2003. 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 Cincinnati check processing region serves banks 
located in multiple Federal Reserve districts, banks located in the 
expanded Cincinnati 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.
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    \2\ See 68 FR 31592, May 28, 2003. In addition to the general 
advance notice of future amendments previously provided by the 
Board, as well as the Board's notices of each of the final 
amendments, the Reserve Banks generally 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.
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    To assist banks in identifying local and nonlocal checks and making 
funds availability decisions, the Board is amending the lists of 
routing symbols associated with the Federal Reserve Banks of Cleveland 
and Chicago to reflect the transfer of operations from the Chicago 
Reserve Bank's Indianapolis office to the Cleveland Reserve Bank's 
Cincinnati branch. To coincide with the effective date of the 
underlying check processing changes, the amendments are effective 
October 30, 2004. The Board is providing advance notice of these 
amendments to give affected banks ample time to make any needed 
processing changes. The advance notice will also enable affected banks 
to amend their availability schedules and related disclosures, if 
necessary, and provide their customers with notice of these changes.\3\ 
The Federal Reserve routing symbols assigned to all other Federal 
Reserve branches and offices will remain the same at this time.
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    \3\ 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.
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Information About Future Changes to Appendix A

    As the Federal Reserve Banks announced on August 2, 2004,\4\ in 
response to the continued nationwide decline in check usage and to 
position themselves more effectively to meet the cost recovery 
requirements of the Monetary Control Act of 1980, the Reserve Banks 
have decided to reduce further the number of locations at which they 
process checks. The Reserve Banks plan to stop processing checks at 
nine offices, and the checks currently processed at those offices will 
be processed at other nearby offices, as follows:
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    \4\ The Reserve Banks' press release concerning the upcoming 
restructuring process is available at http://www.frbservices.org/Retail/pdf/CheckAnnouncePressRelease8-2-04.pdf.

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                                          Branches and offices to which
 Branches  and offices that no longer       check processing  will be
         will process checks:                     transferred:
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Boston, MA............................  Windsor Locks, CT.
Columbus, OH..........................  Cleveland, OH.
Birmingham, AL........................  Atlanta, GA.
Nashville, TN.........................  Atlanta, GA.
Detroit, MI...........................  Cleveland, OH.
Oklahoma City, OK.....................  Dallas, TX.
Houston, TX...........................  Dallas, TX.
Portland, OR..........................  Seattle, WA.
Salt Lake City, UT....................  Denver, CO.
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    The restructuring of Reserve Bank check processing operations will 
take place in several stages over the course of 2005 and early 2006 and 
collectively will reduce the number of check

[[Page 57838]]

processing regions from 32 to 23. The Board will amend appendix A in 
connection with each stage of the restructuring to delete the name of 
the office(s) that will no longer process checks and transfer the 
affected Federal Reserve routing symbols to another check processing 
office. The Board intends to announce each stage of the restructuring 
and the associated amendments to appendix A at least 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.
    Some affected banks might prefer to make or to plan for some or all 
of their processing and availability changes prior to the effective 
dates of the relevant amendments. For the information and planning 
needs of affected banks, the Board today is describing below the 
Federal Reserve routing symbol changes to appendix A that will be made 
between January 1, 2005, and early 2006.
1. Windsor Locks
    The operations of the Boston head office will be transferred such 
that banks with the following Federal Reserve routing symbols will be 
local to the Windsor Locks office:

    0110 2110
    0111 2111
    0112 2112
    0113 2113
    0114 2114
    0115 2115
    0116 2116
    0117 2117
    0118 2118
    0119 2119
    0211 2211
2. Cleveland
    The operations of the Columbus office and the Detroit branch will 
be transferred such that banks with the following Federal Reserve 
routing symbols will be local to the Cleveland head office:

    0410 2410
    0412 2412
    0430 2430
    0432 2432
    0433 2433
    0434 2434
    0440 2440
    0441 2441
    0442 2442
    0720 2720
    0724 2724
3. Atlanta
    The operations of the Birmingham and Nashville branches will be 
transferred such that banks with the following Federal Reserve routing 
symbols will be local to the Atlanta head office:

    0610 2610
    0611 2611
    0612 2612
    0613 2613
    0620 2620
    0621 2621
    0622 2622
    0640 2640
    0641 2641
    0642 2642
4. Denver
    The operations of the Salt Lake City branch will be transferred 
such that banks with the following Federal Reserve routing symbols will 
be local to the Denver branch:

    1020 3020
    1021 3021
    1022 3022
    1023 3023
    1070 3070
    1240 3240
    1241 3241
    1242 3242
    1243 3243
5. Dallas
    The operations of the Oklahoma City and Houston branches will be 
transferred such that banks with the following Federal Reserve routing 
symbols will be local to the 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
6. Seattle
    The operations of the Portland branch will be transferred such that 
banks with the following Federal Reserve routing symbols will be local 
to the Seattle branch:

    1230 3230
    1231 3231
    1232 3232
    1233 3233
    1250 3250
    1251 3251
    1252 3252

    The Federal Reserve routing symbols assigned to all other Federal 
Reserve branches and offices will remain the same.

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 the appendix are technical 
in nature and are required by the statutory and regulatory definitions 
of ``check-processing region.'' Thus, the Board has determined that the 
section 553(b) notice and comment procedures are unnecessary.

Regulatory Flexibility Act Certification

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 605(b)), the Board certifies that the final rule will not have a 
significantly adverse economic impact on a substantial number of small 
entities. These amendments are technical, and the routing number 
changes are required by law. Moreover, these amendments apply to all 
banks regardless of their size. Many small banks generally provide 
next-day availability for all checks and will not be affected by this 
amendment. For the subset of small banks that does distinguish between 
checks subject to next-day availability and those subject to longer 
holds, the final rule should necessitate only minimal programming 
changes. Some of these affected banks might also have to modify their 
funds availability disclosures and notify both new and existing 
customers of the modified funds availability schedules.

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. This technical amendment to appendix A of Regulation CC will 
delete the reference to the Indianapolis office of the Federal Reserve 
Bank of Chicago and reassign the routing symbols listed under that 
office to the Cincinnati office of the Federal Reserve Bank of 
Cleveland. 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

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Regulation CC already are in place, and the Board accordingly 
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

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.

0
2. The Fourth and Seventh 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

* * * * *

Fourth Federal Reserve District

[Federal Reserve Bank of Cleveland]

Head Office

    0410 2410
    0412 2412
    0430 2430
    0432 2432
    0433 2433
    0434 2434

Cincinnati Branch

    0420 2420
    0421 2421
    0422 2422
    0423 2423
    0515 2515
    0519 2519
    0740 2740
    0749 2749
    0813 2813
    0830 2830
    0839 2837
    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

Detroit Branch

    0720 2720
    0724 2724

Des Moines Office

    0730 2730
    0739 2739
    1040 3040
    1041 3041
    1049 3049
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority, September 22, 2004.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 04-21632 Filed 9-27-04; 8:45 am]
BILLING CODE 6210-01-P