The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
I: ' 80 FEDERAL RESERVE BOARD WASHINGTON X-6661 ADDRESS OFFICIAL CORRESPONDENCE TO THE FEDERAL RESERVE BOARD J u l y 22, 1930. Dear Mr. This i s t o advise you t h a t the f e d e r a l Reserve Board t o day adopted the proposed amendments to Regulation J recommended by the r e c e n t Conference of Counsel with c e r t a i n s l i g h t changes i n phraseology suggested by Honorable tfewton D. Baker and the undersigned. The amended r e g u l a t i o n w i l l take e f f e c t on Septemb e r 1, 1930. I t w i l l be published i n the August number of the Federal Reserve B u l l e t i n and w i l l be p r i n t e d in pamphlet form and d i s t r i b u t e d to t h e Federal r e s e r v e banks as soon as p o s s i b l e . A f t e r c o n f e r r i n g with Governor Calkins, Chairman of the Governors' Conference, and Mr. J . S. Walden, Chairman of the Standi n g Committee on C o l l e c t i o n s , I have appointed the following subcommittee of Federal Reserve Bank Counsel to c o l l a b o r a t e with the Standing Committee on Collections i n the r e v i s i o n of the check c o l lection circulars: Mr. Walter S. Logan, Chairman, Mr. M. G. Wallace, Mr. Robert S. Parker. The above committee and the undersigned w i l l meet with the Standing Committee on Collections i n Mew York on J u l y 3 1 s t ; and i t i s hoped t h a t the p r e p a r a t i o n of the r e v i s e d check c o l l e c t i o n c i r c u l a r s can be completed i n a day or two. Mr. Walden advises me, howe v e r , that i t i s customary f o r the r e p o r t s of the Standing Committee on C o l l e c t i o n s to be submitted to the Governors' Conference, and t h i s may r e s u l t i n some delay i n the f i n a l adoption of the r e v i s e d circular. There i s enclosed f o r your f u r t h e r information a copy of a r e s o l u t i o n adopted by the Federal Reserve Board today promulgating the amendments to Regulation J . With k i n d e s t personal r e g a r d s , I am Enclosure Cordially yours, Walter Wyatt, General Counsel. X**6660o»a BE IT RESOLVED BY THE FEDERAL RESERVE BOARD, t h a t , e f f e c t i v e September 1, 1930, Regulation J i s hereby amended a s f o l l o w s : (1) Paragraph 1 of Section I I I i s amended "by changing the words "acceptable to the Federal Reserve Bank of the D i s t r i c t i n which such nonmember banks a r e l o c a t e d " to read "acceptable to the c o l l e c t i n g Fede r a l r e s e r v e bank." (2) Paragraph 3 of Section I I I i s amended by changing the words "acceptable to the Federal Reserve Bank of the D i s t r i c t i n which such nonmember bank i s l o c a t e d " to r e a d "acceptable to the c o l l e c t i n g Fede r a l r e s e r v e bank." (3) Paragraph 2 of S e c t i o n IV i s amended by changing the p e r i o d a t the end thereof to a comma and by adding the following words: "provided, however, t h a t the Federal r e s e r v e bank may i n i t s d i s c r e t i o n r e f u s e a t any time t o p e r m i t the withdrawal or o t h e r use of c r e d i t given f o r any item f o r which the Federal r e s e r v e bank has not y e t r e c e i v e d payment i n a c t u a l l y and f i n a l ly collected funds." (4) Paragraph 3 of S e c t i o n IV i s amended by changing the p e r i o d a t the end thereof to a comma and by adding the f o l l o w i n g words: "provided, however, t h a t the Federal r e s e r v e bank may i n i t s d i s c r e t i o n r e f u s e a t any time to permit the withdrawal or other use of c r e d i t given f o r any item f o r which the Federal reserve bank has not y e t r e c e i v e d payment i n a c t u a l l y and f i n a l l y c o l l e c t e d funds." (5) S e c t i o n V i s amended to r e a d as f o l l o w s : "SECTION V. TERMS OF COLLECTION. "The Federal Reserve Board hereby a u t h o r i z e s the F e d e r a l r e s e r v e barks to handle such checks s u b j e c t to the f o l l o w i n g terms and c o n d i t i o n s ; and each member and nonmember c l e a r i n g bank which sends checks to any Federal r e s e r v e bank f o r deposit or c o l l e c t i o n s h a l l by such a c t i o n be deemed ( a ) to a u t h o r i z e the Federal r e s e r v e banks t o handle such checks s u b j e c t to the f o l l o w i n g terms and c o n d i t i o n s , (b) to warrant i t s own a u t h o r i t y to give the Federal r e s e r v e banks such a u t h o r i t y , and ( c ) t o agree to indemnify any F e d e r a l r e s e r v e bank f o r any l o s s r e s u l t i n g from the f a i l u r e of such sending bank t o have such a u t h o r i t y . X-666(>-a -2- " ( l ) A Federal reserve bank w i l l act only as agent of the "bank from which i t receives such checks and w i l l assume no l i a b i l i t y except for i t s own negligence and i t s guaranty of prior indorsements. "(2) A Federal reserve bank may present such checks for payment pr send such checks f o r c o l l e c t i o n direct to the bank on which they are drawn or at which they are payable, or in i t s d i s c r e t i o n may f o r ward them to another agent with authority to present them for payment or send them for c o l l e c t i o n direct to the bank on which they are drawn or at which they are payable. "(3) A Federal reserve bank may, i n i t s d i s c r e t i o n and at i t s option, e i t h e r d i r e c t l y or through or from an agent, accept in payment of or i n remittance for such checks, cash, bank drafts, transfers of funds or bank c r e d i t s , or other forms of payment or remittance, acceptable to the c o l l e c t i n g Federal reserve bank. The Federal reserve bank shall not be l i a b l e for the f a i l u r e of the drawee bank or any agent to pay or remit for such checks, nor for any l o s s r e s u l t i n g from the acceptance from the drawee bank or any c o l l e c t i n g agent, i n l i e u of cash, of any other form of payment or remittance authori z e d herein, nor f o r the nonpayment o f , or f a i l u r e to r e a l i z e upon, any bank draft or other medium of payment or remittance which may be accepted from the drawee bank or any c o l l e c t i n g agent. "(4) Checks received by a Federal reserve bank which are payable i n i t s own d i s t r i c t w i l l ordinarily be forwarded or presented direct to the banks on which they are drawn, and such banks w i l l be required to remit or pay therefor at par i n such one or more of the forms of payment or remittance authorized under paragraph (3) hereof as may be acceptable to the Federal reserve bank. "(5) Checks received by a Federal reserve bank payable i n other d i s t r i c t s w i l l ordinarily be forwarded f o r c o l l e c t i o n to the Federal reserve bank of the d i s t r i c t i n which such checks are payable; provided, however, that, where arrangements can be made s a t i s f a c t o r y to the c o l l e c t ing bank or agent and to the Federal reserve bank of the d i s t r i c t i n which such checks are payable, any such checks may be forwarded for c o l l e c t i o n direct to the bank on which they are drawn or at which they are payable, or may be f o r - X-666§-a S 3 —3— warded f o r c o l l e c t i o n to another agent with a u t h o r i t y to p r e s ent them f o r payment d i r e c t to the "bank on which they a r e drawn or a t which they a r e p a y a b l e . A l l such checks s h a l l be handled s u b j e c t to a l l the terms and c o n d i t i o n s of t h i s r e g u l a tion. " ( 6 ) Bank d r a f t s r e c e i v e d by a Federal r e s e r v e bank i n payment of or i n remittance f o r checks handled under the terms of t h i s r e g u l a t i o n s h a l l l i k e w i s e be handled f o r c o l l e c t i o n s u b j e c t t o a l l the terms and c o n d i t i o n s of t h i s r e g u l a t i o n . " ( 7 ) The amount of any check f o r which payment i n a c t u a l l y and f i n a l l y c o l l e c t e d funds i s not r e c e i v e d s h a l l be charged back to the forwarding bank, r e g a r d l e s s of whether or not the check i t s e l f can be r e t u r n e d . In such event, n e i t h e r the owner or h o l d e r of any such check, nor the bank which sent such check to t h e Federal r e s e r v e bank f o r c o l l e c t i o n s h a l l have any r i g h t of recourse upon, i n t e r e s t i n , or r i g h t of payment from, any r e s e r v e balance, c l e a r i n g account, deposit a c count, or o t h e r such fund of the drawee bank cr of any bank to which such checks have been s e n t f o r c o l l e c t i o n , i n the p o s s e s s i o n of the Federal r e s e r v e bank. No d r a f t , a u t h o r i z a t i o n to charge, o r other order, upon any r e s e r v e balance, c l e a r i n g account, deposit account, or o t h e r such funds of a paying, r e m i t t i n g , or c o l l e c t i n g bank i n the p o s s e s s i o n of a Federal r e serve bank, i s s u e d f o r the purpose of s e t t l i n g items handled under t h e terms of t h i s r e g u l a t i o n w i l l be p a i d , a c t e d upon, or honored a f t e r r e c e i p t by such Federal r e s e r v e bank of n o t i c e of suspension or c l o s i n g of such paying, r e m i t t i n g , or c o l l e c t i n g bank."
@FedFRASER