[Federal Register Volume 74, Number 198 (Thursday, October 15, 2009)]
[Rules and Regulations]
[Pages 52875-52877]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24634]


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FEDERAL RESERVE SYSTEM

12 CFR Part 229

[Regulation CC; Docket No. R-1372]


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 the routing number 
guide to next-day availability checks and local checks in Regulation CC 
to delete the reference to the head office of the Federal Reserve Bank 
of Dallas and to reassign the Federal Reserve routing symbols currently 
listed under that office to the head office of the Federal Reserve Bank 
of Cleveland. The Board is also amending the routing number guide to 
delete the reference to the Los Angeles branch office of the Federal 
Reserve Bank of San Francisco and to reassign the routing symbols 
currently listed under that office to the head office of the Federal 
Reserve Bank of Cleveland. These amendments reflect the restructuring 
of check-processing operations within the Federal Reserve System. The 
Board is also providing advance notice about anticipated future 
amendments in connection with the Reserve Banks' restructuring such 
that by early next year there will only be a single check-processing 
region for purposes of Regulation CC. Accordingly, at that time there 
will no longer be any checks that would be considered nonlocal.

DATES: The amendments to appendix A to part 229 in amendatory 
instruction 2 are effective October 17, 2009.
    The amendments to appendix A to part 229 in amendatory instruction 
3 are effective November 14, 2009.

FOR FURTHER INFORMATION CONTACT: Jeffrey S. H. Yeganeh, Financial 
Services Manager (202/728-5801), or Joseph P. Baressi, Financial 
Services Project Leader (202/452-3959), Division of Reserve Bank 
Operations and Payment Systems; or Dena L. Milligan, Attorney (202/452-
3900), 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 is considered local if it is payable by or 
at or through a bank located in the same Federal Reserve check-
processing region as the depositary bank.
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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 Amendments to Appendix A

    On October 17, 2009, the Reserve Banks will transfer the check-
processing operations of the head office of the Federal Reserve Bank of 
Dallas to the head office of the Federal Reserve Bank of Cleveland. On 
November 14, 2009, the Reserve Banks will transfer the check-processing 
operations of the Los Angeles branch office of the Federal Reserve Bank 
of San Francisco to the head office of the Federal Reserve Bank of 
Cleveland. As a result of these changes, some checks that are drawn on 
and deposited at banks located in the Dallas, Los Angeles, and 
Cleveland check-processing regions and that currently are nonlocal 
checks will

[[Page 52876]]

become local checks subject to faster availability schedules. To assist 
banks in identifying local and nonlocal checks and making funds 
availability decisions, the Board is amending the lists of routing 
symbols in appendix A associated with the Federal Reserve Banks of 
Dallas, San Francisco, and Cleveland to reflect the transfer of check-
processing operations from the Dallas head office and the Los Angeles 
branch office to the head office of the Federal Reserve Bank of 
Cleveland. To coincide with the effective date of the underlying check-
processing changes, the amendments to appendix A are effective October 
17 and November 14, 2009, respectively. The Board is providing notice 
of the amendments at this time to give affected banks ample time to 
make any needed processing changes. Early notice also will enable 
affected banks to amend their availability schedules and related 
disclosures if necessary and provide their customers with notice of 
these changes.\2\
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    \2\ 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 Anticipated Future Changes to Regulation CC

    The Federal Reserve Banks initially announced in November 2008 that 
decreases in check volume necessitated transition to a single paper-
check-processing site in order to comply with the cost recovery 
provisions of the Monetary Control Act.\3\ On July 31, 2009, the 
Reserve Banks reaffirmed that decreasing check-processing volume was 
likely to necessitate the transition to a single check-processing 
center by the first quarter of 2010.\4\ The Reserve Banks are taking 
these steps in response to the continued nationwide decline in check 
usage, as well as the rapidly increasing use of electronic check-
clearing methods, and to meet the cost recovery requirements of the 
Monetary Control Act of 1980. For the information and planning needs of 
banks, the Board is today providing notice that, assuming check volumes 
continue to evolve in line with the Reserve Banks' expectations, the 
Reserve Banks intend to change their check-processing infrastructure 
such that by early next year there will be only a single check-
processing region for purposes of Regulation CC. Accordingly, at that 
time there will no longer be any checks that would be considered 
nonlocal.
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    \3\ See http://www.frbservices.org/files/communications/pdf/check/110608_restructure_announcement.pdf.
    \4\ See http://www.frbservices.org/files/communications/pdf/check/073109_check_restructure_acceleration.pdf.
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Administrative Procedure Act

    The public comment requirements of section 553(b) of the 
Administrative Procedure Act do not apply to these amendments to 
Appendix A of Regulation CC because the amendments involve matters of 
agency organization. The Monetary Control Act requires cost recovery 
for Federal Reserve Bank priced services over the long term, which from 
time to time necessitates changes in the internal organization of 
Reserve Bank services in order to meet the statutory mandate. The rapid 
decline in paper check volumes, generally, and the decline in paper 
checks sent to the Reserve Banks for collection have significantly 
reduced the need for Federal Reserve check-processing locations and the 
ability of Reserve Banks to recover the costs of maintaining those 
locations. In order to achieve the Monetary Control Act requirement of 
long-run full cost recovery, the Reserve Banks have adjusted their 
check service infrastructure to reduce the number of check-processing 
regions. In light of the fact that the Reserve Banks are receiving a 
high percentage of checks electronically, the consolidation of check 
processing centers and the accompanying amendments to Appendix A of 
Regulation CC are required by law. As a result of the consolidation of 
Federal Reserve check-processing offices, amendments to Appendix A are 
necessary because the statutory and regulatory terms ``local'' and 
``nonlocal'' are defined in terms of ``check-processing regions''--the 
geographic areas served by a Federal Reserve check-processing office.
    In addition, the Board finds, in accordance with APA section 
553(d), good cause for making the amendments to Appendix A relating to 
the transfer of check-processing operations from Dallas to Cleveland 
effective without 30 days advance publication. On August 14, 2009, the 
Federal Reserve Banks, by letter, informed depository institutions 
within Dallas's check-processing region of the October 17 transfer of 
check-processing operations from Dallas to Cleveland. That letter was 
then published on the Federal Reserve Financial Services' Web site. 
Accordingly, the affected depository institutions are aware of and 
making preparations for the transfer of paper check-processing 
operations from Dallas to Cleveland.

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. The technical amendments to Appendix A of Regulation CC will 
delete the references to the head office of the Federal Reserve Bank of 
Dallas and the Los Angeles branch office of the Federal Reserve Bank of 
San Francisco and reassign the routing symbols listed under those 
offices to the head 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, the 
Board believes that all procedures for notifying customers of any 
change in funds availability are in place, and therefore, the Board 
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.


0
2. Effective October 17, 2009, the Fourth and Eleventh District routing 
symbol lists in appendix A are amended by removing the headings and 
listings for the Eleventh Federal Reserve District and revising the 
listings for the Fourth Federal Reserve District 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

0220-2220
0223-2223
0410-2410
0412-2412

[[Page 52877]]

0420-2420
0421-2421
0422-2422
0423-2423
0430-2430
0432-2432
0433-2433
0434-2434
0440-2440
0441-2441
0442-2442
0515-2515
0519-2519
0710-2710
0711-2711
0712-2712
0719-2719
0720-2720
0724-2724
0730-2730
0739-2739
0740-2740
0749-2749
0750-2750
0759-2759
0813-2813
0830-2830
0839-2839
0863-2863
0910-2910
0911-2911
0912-2912
0913-2913
0914-2914
0915-2915
0918-2918
0919-2919
0920-2920
0921-2921
0929-2929
0960-2960
1010-3010
1011-3011
1012-3012
1019-3019
1020-3020
1021-3021
1022-3022
1023-3023
1030-3030
1031-3031
1039-3039
1040-3040
1041-3041
1049-3049
1070-3070
1110-3110
1111-3111
1113-3113
1119-3119
1120-3120
1122-3122
1123-3123
1130-3130
1131-3131
1140-3140
1149-3149
1163-3163
* * * * *

0
3. Effective November 14, 2009, the Fourth and Twelfth District routing 
symbol lists in appendix A are amended by removing the headings and 
listings for the Twelfth Federal Reserve District and revising the 
listings for the Fourth Federal Reserve District 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

0220-2220
0223-2223
0410-2410
0412-2412
0420-2420
0421-2421
0422-2422
0423-2423
0430-2430
0432-2432
0433-2433
0434-2434
0440-2440
0441-2441
0442-2442
0515-2515
0519-2519
0710-2710
0711-2711
0712-2712
0719-2719
0720-2720
0724-2724
0730-2730
0739-2739
0740-2740
0749-2749
0750-2750
0759-2759
0813-2813
0830-2830
0839-2839
0863-2863
0910-2910
0911-2911
0912-2912
0913-2913
0914-2914
0915-2915
0918-2918
0919-2919
0920-2920
0921-2921
0929-2929
0960-2960
1010-3010
1011-3011
1012-3012
1019-3019
1020-3020
1021-3021
1022-3022
1023-3023
1030-3030
1031-3031
1039-3039
1040-3040
1041-3041
1049-3049
1070-3070
1110-3110
1111-3111
1113-3113
1119-3119
1120-3120
1122-3122
1123-3123
1130-3130
1131-3131
1140-3140
1149-3149
1163-3163
1210-3210
1211-3211
1212-3212
1213-3213
1220-3220
1221-3221
1222-3222
1223-3223
1224-3224
1230-3230
1231-3231
1232-3232
1233-3233
1240-3240
1241-3241
1242-3242
1243-3243
1250-3250
1251-3251
1252-3252
* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority, October 8, 2009.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E9-24634 Filed 10-14-09; 8:45 am]
BILLING CODE 6210-01-P