[Federal Register Volume 61, Number 99 (Tuesday, May 21, 1996)]
[Rules and Regulations]
[Pages 25389-25390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12683]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 61, No. 99 / Tuesday, May 21, 1996 / Rules 
and Regulations

[[Page 25389]]



FEDERAL RESERVE SYSTEM

12 CFR Part 229

[Regulation CC; Docket No. R-0925]


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 is publishing technical amendments to Appendices A 
and B of Regulation CC. The amendments will conform the Appendices to a 
realignment in Federal Reserve check-processing regions by adding the 
routing numbers formerly assigned to the Jericho check-processing 
region to the East Rutherford check-processing region in Appendix A, 
and by eliminating the reference to routing numbers formerly assigned 
to the Jericho office that were subject to a reduced availability 
schedule for depositary banks in the East Rutherford check-processing 
territory in Appendix B.

EFFECTIVE DATE: October 15, 1996.

FOR FURTHER INFORMATION CONTACT: Stephanie Martin, Senior Attorney 
(202/452-3198), or Heatherun Allison, Attorney (202/452-3565), 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 <SUP>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 <SUP>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.'' 
<SUP>3 Appendix A of Regulation CC lists the Federal Reserve check-
processing offices and the 4-digit routing number prefixes that are 
local to each office. Appendix B of Regulation CC lists 4-digit routing 
number prefixes to which reduced availability schedules apply in 
certain cases.
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    \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 Sec. 229.2(m). The Act's definition is substantially 
similar (12 U.S.C. 4001(9)).
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    Effective October 15, 1996, the Federal Reserve Bank of New York 
will discontinue processing checks at its Jericho office and will 
incorporate the Jericho check-processing region into the East 
Rutherford check-processing region. This consolidation is part of a 
larger effort by the Federal Reserve Bank of New York to achieve 
greater efficiency in its check operations by consolidating systems, 
equipment, and operations.<SUP>4 Accordingly, the routing number list 
in Appendix A is being changed to reflect the Jericho-East Rutherford 
consolidation. The reference in Appendix B to routing numbers formerly 
assigned to the Jericho office that were subject to a reduced 
availability schedule for depositary banks in the East Rutherford 
check-processing territory is also being deleted, because those routing 
numbers are now all ``local'' with respect to the East Rutherford 
check-processing territory.
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    \4\ 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. Similarly, the Federal Reserve 
Bank of New York in 1994 discontinued check-processing at its 
Buffalo office and incorporated the Buffalo check-processing region 
into the Utica check-processing region. The Board made corresponding 
changes to Appendices A and B-2 at that time. 59 FR 48789, September 
23, 1994.
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    Although the substance of Regulation CC will be unaffected by the 
amendments to Appendices A and B, the consolidation of check-processing 
regions may require some banks to adjust their internal procedures for 
assigning funds availability. For example, beginning on October 15, 
1996, checks deposited in the former Jericho region will now be 
considered local checks in the East Rutherford region (and vice versa). 
Banks that now distinguish between the Jericho and East Rutherford 
regions in assigning availability will need to realign their internal 
operating systems to reflect the consolidation.
    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, does 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 Jericho and East Rutherford 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:


[[Page 25390]]


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

    2. In Appendix A to part 229, under the heading ``SECOND FEDERAL 
RESERVE DISTRICT,'' the numbers appearing directly under the subheading 
``Jericho Office'' are transferred in numerical order under the 
subheading ``East Rutherford Office'', and the subheading ``Jericho 
Office'' is removed.
    3. In Appendix B to part 229, the entry for ``East Rutherford'' is 
removed.

    By order of the Board of Governors of the Federal Reserve 
System, May 15, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-12683 Filed 5-20-96; 8:45 am]
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