19062 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

1A bundle is a standard unit of 1000 currency

notes of the same denomination. Deposits of lower

denomination notes generally are made in bundle

increments. Deposits of higher denomination notes

(e.g., $50s or $100s) generally are made in strap

increments (100 currency notes).

Iowa, and thereby indirectly acquire

Security Savings Bank, Ireton, Iowa.

Board of Governors of the Federal Reserve

System,

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 96–10604 Filed 4–29–96; 8:45 am]

BILLING CODE 6210–01–F

[Docket No. R–0922]

Federal Reserve Uniform Cash Access

Policy

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Policy statement.

SUMMARY: The Board has revised its cash

access policy to provide greater

consistency in Federal Reserve Bank

cash service levels. The policy provides

for a base level of free currency access

to all depository institutions, but

restricts the number of offices served

and the frequency of access. Depository

institution offices that meet minimum

volume thresholds will be able to obtain

more frequent free access. Additional

access, beyond the free service level,

will be priced.

EFFECTIVE DATE: May 1, 1998.

FOR FURTHER INFORMATION CONTACT: Jon

J. Cameron, Manager (202/452–2220) or

Kathleen M. Connor, Senior Financial

Services Analyst (202/452–3917), Cash

Section, Division of Reserve Bank

Operations and Payment Systems; for

the hearing impaired only:

Telecommunications Device for the

Deaf, Dorothea Thompson (202/452–

3544).

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Reserve Banks supply

currency and coin to depository

institutions throughout the nation.

Reserve Banks provided cash services to

Federal Reserve member banks at no

explicit fee (beyond the face value of

cash orders or deposits) from 1914 to

1981. Nonmember institutions received

cash services from the Treasury

Department until the transfer of its

Subtreasury functions to the Federal

Reserve Banks in 1920. As a result,

nonmember institutions generally met

their cash needs through correspondent

member banks from 1920 to 1980.

During this period, member banks could

request the Federal Reserve to provide

cash services to a nonmember

institution. The member’s reserve

account would reflect the transaction,

including a charge to reimburse the

Federal Reserve for the cash

transportation cost.

The Monetary Control Act of 1980

authorized the Federal Reserve Banks to

offer priced services to both member

and nonmember institutions, and

included currency and coin services in

its list of priced Federal Reserve Bank

services. The Board determined in the

development of its pricing principles

that ‘‘currency and coin processing

(paying, receiving and verifying both

coin and currency, and issuing,

processing, canceling, and destroying

currency) are governmental functions

and would not be priced.’’ The Board

noted, however, that ‘‘the Reserve Banks

may impose reasonable limitations on

frequency of service, number of offices

served and size of orders/deposits.’’ (45

FR 56893, September 4, 1980)

As part of the Federal Reserve’s

implementation of the Monetary Control

Act, the Board adopted a policy in

November 1981 to provide standard

access nationwide to every depository

institution that requested coin and

currency directly from the Federal

Reserve. (46 FR 55152, November 6,

1981) Under the policy, the Board

required that all Federal Reserve offices

provide access to, at a minimum, one

office per depository institution or one

office of a depository institution per

municipality, subject to adjustment

where special circumstances apply. In

1982, the Board adopted fee schedules

for currency and coin transportation and

coin wrapping services. (47 FR 58364,

December 30, 1982)

In 1984, the Board adopted uniform

cash service standards (UCSS) for

Federal Reserve Banks and most

recently revised the UCSS in 1987. The

UCSS provide a common framework for

Federal Reserve cash services. The

UCSS address packaging standards,

handling and verification requirements,

access frequency, and depository

institution service levels. The UCSS

allow normal service to each authorized

depository institution or office once per

week and recognizes that certain

depository institution offices may call

for more frequent service where volume

and cost justify more frequent service.

Under the UCSS, Reserve Banks that

wish to provide access exceeding the

basic frequency may do so as a priced

service but are not required to price the

service.

In 1987, the Federal Reserve Bank of

Minneapolis and the Detroit Branch of

the Federal Reserve Bank of Chicago

established access fees for additional

cash services in excess of the free

weekly service allowed by the UCSS. In

March 1996, the Federal Reserve Bank

of San Francisco modified its cash

service structure to restrict the

frequency of access. Under the modified

structure, a depository institution must

meet a minimum bundle threshold to

qualify for more frequent access. 1

Additional access is priced if the bundle

threshold is not met.

Currently, there is a lack of

consistency in the cash service levels

provided by the Reserve Banks. Some

Reserve Bank offices limit access to cash

services to as few as five offices per

depository institution, while other

offices allow unrestricted access (up to

400 offices). While some Reserve Bank

offices permit unrestricted frequency of

access, other offices limit frequency

based on parameters such as dollar

values, volumes, and location. As noted

above, only a few offices offer additional

priced access. Consistency in Federal

Reserve policies and service levels will

become increasingly important as an

increasing number of depository

institutions have a presence in multiple

Federal Reserve districts.

II. Uniform Cash Access Policy

The Board has approved a new cash

access policy, which was developed

within the following framework: (1) the

structure of cash services should

include a common, base level of free

services to achieve greater uniformity in

Federal Reserve cash service levels; (2)

the base level of free cash services

should be consistent with a wholesale

role for the Reserve Banks, which

implies that a large depository

institution is responsible for servicing

its own branch network; and (3) Reserve

Banks that choose to provide cash

services exceeding the base level may

do so as a priced service, where demand

exists.

The new policy imposes more

uniformity on the provision of cash

services than currently exists. While the

policy reflects the differing operating

capabilities of the various Federal

Reserve Bank offices, the Board’s intent

is to move to full uniformity within two

years of implementation of this policy.

The Board will review the Reserve

Banks’ initial experience with this

policy and assess whether there are

impediments to moving to a fully

uniform policy. Based on the results of

the review, the Board may modify the

policy to achieve Systemwide

uniformity with respect to volume

thresholds, pricing, and additional

priced access.

Following is a discussion of the new

cash access policy and how and why it
Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices 19063

2The Reserve Banks make payments and accept

deposits in standard units as defined by the UCSS.

The denomination bundle standard is set by the

individual Reserve Bank office to reflect the

operating needs of the office. Each Reserve Bank’s

denomination bundle standard is included in its

cash operating circular.

3The cross shipment policy states that cross

shipment (deposit of excess fit currency and reorder

of the same denomination within five business

days) should be eliminated at the depositing-office

level, and minimized, or eliminated where

practicable, at the depositing-institution level.

differs from the current policy

provisions.

A. Number of Depository Institution

Offices Eligible for Free Access

Under the new policy, each

depository institution with a banking

presence in a Federal Reserve office

territory can designate up to ten offices

to receive free cash access (deposit and

order) service from the local Reserve

Bank office. Beyond the ten offices,

Reserve Bank offices will provide free

cash access to large offices whose

volumes exceed a specified threshold

and that satisfy the local Reserve Bank

office’s denomination bundle standard.2

Each district will set a ‘‘high bundle

threshold,’’ within the range of fifty to

one hundred bundles, to accommodate

the needs of the geographic area being

serviced by a particular office within

their district. During initial

implementation of the policy,

depository institutions will include the

known large offices exceeding the ‘‘high

bundle threshold’’ in the original ten

designated offices to receive free access

to cash services.

The current policy requires Federal

Reserve Banks to provide free cash

access service to depository institutions

on an equal and impartial basis,

consistent with their capabilities to

provide such service through maximum

utilization of available physical

facilities. The varying application of this

provision by the Reserve Bank offices

has resulted in inconsistent cash service

levels throughout the System.

The new ten-office provision provides

uniformity in the provision of cash

services. The new provision is

consistent with the wholesale role of the

Federal Reserve in providing cash

services, particularly with respect to

large institutions. The policy encourages

large institutions to consolidate deposit

and cash ordering functions and

imposes reasonable limitations on the

number of offices served.

The provision for ten free endpoints

may provide many smaller depository

institutions with complete coverage of

their branch network. The Board

considered developing a formula to set

the number of endpoints eligible to

receive free service based on the

institution’s deposit size and total

number of endpoints. The Board

concluded that such a formula would

prove too difficult to administer and

that the provision of ten free endpoints

would result in the least disruption to

the current level of free cash services.

The Reserve Banks estimate that 95

percent of depository institutions would

continue to receive their current level of

cash services free of charge. The policy

would affect primarily branch networks

of large depository institutions. The

policy would result in a reduction of

approximately 8,700 endpoints from the

current base of 29,500 endpoints that

currently receive free cash services (a

reduction of approximately 26 percent).

The Board believes implementation of

the policy will not materially affect the

Reserve Banks’ costs of providing cash

services. Aggregate cash receipts and

disbursements are expected to remain

unchanged.

The Reserve Banks will establish

procedures to ensure that, if a

depository institution receives free

access to more than ten offices, all

endpoints must meet the high bundle

threshold. In addition, the Reserve

Banks have developed administrative

guidelines to accommodate mergers and

bank acquisitions. For one year after the

merger or acquisition, the merged

institutions can receive the same level

of free access as they received at the

time of the merger. After one year, the

Reserve Banks will treat the merged

institutions as one entity for the

purposes of this policy.

B. Frequency of Access

Normal free access for each

designated office of the depository

institution will continue to be once per

week. Access more frequent than once

per week will be available free of charge

to the designated endpoints whose

volumes exceed a twenty-bundle

aggregate threshold and that satisfy the

local Reserve Bank office’s

denomination bundle standard.

These provisions impose reasonable

limitations on the frequency of service

and standardize System service levels.

They are consistent with the current

cross-shipping policy, which will

continue under the new cash access

policy.3 Elimination of the crossshipping policy could result in some

depository institutions relying on the

Reserve Banks as money distribution

centers, which would be inconsistent

with the Federal Reserve’s wholesale

role.

C. Priced Additional Access

The new policy requires that Reserve

Banks price additional cash services.

Under the current policy, Reserve Banks

that provide access exceeding the basic

frequency can do so as a priced service

but are not required to price the service.

The Board anticipates that all Reserve

Banks will offer priced cash services

except for those offices that can

demonstrate that operational limitations

prevent them from doing so.

The pricing of additional service will

recover the cost of access to the Federal

Reserve cash vault only and will not

reflect the costs of the governmental

aspects of the Reserve Banks’ cash

services, such as vault storage and

processing of currency. Preliminary

estimates of the range of Reserve Bank

fees for additional access are $20–$100

per deposit or order.

D. Delegation of Authority

The Board believes that flexibility is

desirable in the administration of future

routine changes to the policy. The

Board, therefore, has delegated authority

to the Director of the Division of Reserve

Bank Operations and Payment Systems

to (1) approve changes in the base

number of free endpoints and the

volume thresholds; and (2) waive the

policy for a limited period if warranted

by special circumstances, such as a

natural disaster or the introduction of

new currency.

III. Effective Date

The new cash access policy becomes

effective on May 1, 1998. The Board

believes that two years is adequate time

for financial institutions to make the

necessary preparations to implement the

policy.

IV. Competitive Impact Analysis

The Board assesses the competitive

impact of changes that may have a

substantial effect on payment system

participants. In particular, the Board

assesses whether a proposed change

would have a direct and material

adverse effect on the ability of other

service providers to compete effectively

with the Federal Reserve Banks in

providing similar services and whether

such effects are due to legal differences

or due to a dominant market position

deriving from such legal differences.

The Reserve Banks will continue to

perform the governmental functions of

currency and coin processing. While

private-sector service providers cannot

duplicate the entire range of Federal

Reserve cash functions, these providers

can supply and accept coin and

currency. In addition, private-sector

service providers offer an array of value-
19064 Federal Register / Vol. 61, No. 84 / Tuesday, April 30, 1996 / Notices

added cash services that the Federal

Reserve Banks do not provide. For

example, some private-sector service

providers maintain automated teller

machines for depository institutions and

offer specific retail services for the

depository institutions’ customers.

Therefore, it is unlikely that the policy

will result in any significant shift to

Federal Reserve cash services away from

private-sector providers. The Board’s

policy, as revised, does not adversely

affect the ability of depository

institutions or service providers to

compete with the Federal Reserve Banks

to provide cash services.

V. Federal Reserve Cash Service Access

Policy

The Board has adopted the following

Federal Reserve cash access policy:

1. Number of endpoints eligible for

free cash access. Each depository

institution with a banking presence in a

Federal Reserve office territory can

designate up to ten offices in that

territory to receive free cash access

(deposit and order) service from the

local Reserve Bank office.

Beyond the ten offices, Reserve Bank

offices will provide free cash access to

endpoints whose volumes exceed a

specified threshold and that satisfy the

local Reserve Bank office’s

denomination bundle standard. Each

Reserve Bank office will set a ‘‘high

bundle threshold,’’ within the range of

fifty to one hundred bundles, to

accommodate the needs of the

geographic area being serviced within

that Federal Reserve office territory. If a

depository institution receives free

access for more than ten endpoints, all

endpoints must meet the high bundle

threshold.

2. Frequency of access. Normal free

access for each designated office of the

depository institution will be once per

week. Access more frequent than once

per week will be available free of charge

to each designated office whose volume

exceeds a twenty-bundle aggregate

threshold and that satisfies the local

Reserve Bank office’s denomination

bundle standard.

3. Priced access. Reserve Bank offices

may choose to accommodate additional

access where the demand exists subject

to the constraints of the physical

facilities at each Reserve Bank office.

Reserve Banks must price access to cash

services beyond the free service

described above, if offered.

4. Delegation of authority. The

Director of the Division of Reserve Bank

Operations and Payment Systems, under

delegated authority, may (1) approve

changes in the base number of free

endpoints and the volume thresholds;

and (2) waive the policy for a limited

period if warranted by special

circumstances, such as a natural disaster

or the introduction of new currency.

By order of the Board of Governors of the

Federal Reserve System.

Dated: April 24, 1996.

William W. Wiles,

Secretary of the Board.

[FR Doc. 96–10606 Filed 4–29–96; 8:45 am]

BILLING CODE 6210–01–P

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board of

Governors of the Federal Reserve

System.

TIME AND DATE: 11:00 a.m., Monday, May

6, 1996.

PLACE: Marriner S. Eccles Federal

Reserve Board Building, C Street

entrance between 20th and 21st Streets,

N.W., Washington, D.C. 20551.

STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Personnel actions (appointments,

promotions, assignments, reassignments, and

salary actions) involving individual Federal

Reserve System employees.

2. Any items carried forward from a

previously announced meeting.

CONTACT PERSON FOR MORE INFORMATION:

Mr. Joseph R. Coyne, Assistant to the

Board; (202) 452–3204. You may call

(202) 452–3207, beginning at

approximately 5 p.m. two business days

before this meeting, for a recorded

announcement of bank and bank

holding company applications

scheduled for the meeting.

Dated: April 26, 1996.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 96–10837 Filed 4–26–96; 2:54 pm]

BILLING CODE 6210–01–P

FEDERAL TRADE COMMISSION

[File No. 932–3331]

The May Department Stores Company;

Proposed Consent Agreement With

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

SUMMARY: In settlement of alleged

violations of federal law prohibiting

unfair or deceptive acts or practices and

unfair methods of competition, this

consent agreement, accepted subject to

final Commission approval, would

require, among other things, the St.

Louis-based company to cease

unwarranted collection activity on

certain acquired credit card accounts, to

correct the inaccurate or obsolete credit

data it sent to credit reporting agencies

about these accounts, and to take steps

to ensure that the information

maintained and reported with respect to

the acquired accounts is accurate. May

would also be prohibited from sending

credit cards to consumers except: (1) In

response to an oral or written request or

application for the card, or (2) as a

renewal of, or substitute for, an accepted

credit card. The Consent Agreement

settles allegations that, as an example,

in converting its Thalhimer’s customers’

credit card accounts to Hecht’s

accounts, May’s conversion process

transferred obsolete derogatory

information to the new accounts. The

conversion process also allegedly led to

the inaccurate reporting of payments

and other negative data and to the

initiation of collection activity against

some customers.

DATES: Comments must be received on

or before July 1, 1996.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW.,

Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

David Medine, Federal Trade

Commission, S–4429, 6th and

Pennsylvania Ave., NW., Washington

DC 20580. (202) 326–3224. Christopher

Keller, Federal Trade Commission, S–

4429, 6th and Pennsylvania Ave., NW.,

Washington, DC 20580. (202) 326–3159.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46 and Section 2.34 of the Commission’s

Rules of Practice (16 CFR 2.34), notice

is hereby given that the following

consent agreement containing a consent

order to cease and desist, having been

filed with and accepted, subject to final

approval, by the Commission, has been

placed on the public record for a period

of sixty (60) days. Public comment is

invited. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of

the Commission’s Rules of Practice (16

CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order

To Cease and Desist

The Federal Trade Commission

having initiated an investigation of

certain acts and practices of The May

Department Stores Company, a

corporation, (‘‘May’’), hereinafter

sometimes referred to as proposed

respondent, and it now appears that

proposed respondent is willing to enter