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F ed er a l r e s e r v e Ba n k o f D allas DALLAS, TEXAS 75222 C i r c u l a r N o . 76-11 J a n u a r y 23, 1976 American Revolution Bicentennial NEW PROCEDURE FOR HANDLING LATE RETURNS TO ALL BANKS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Effective F e b r u a r y 2, 1976, th e F e d e r a l R e s e r v e S y s t e m will a d o p t a new p r o c e d u r e for h a n d l i n g " l a t e r e t u r n s " — d i s h o n o r e d c h e c k s t h a t t h e p a y ing b a n k a l l e g e d l y h a s not r e t u r n e d o r p r o v i d e d n o ti c e of d i s h o n o r f o r , b e f o r e th e time p r e s c r i b e d b y B u ll e ti n s 8 a n d 11 of t h i s B a n k . T h e n e w p r o c e d u r e , w h i c h is d e s i g n e d to a l l e v i a t e m a n y of th e p r o b l e m s now e n c o u n t e r e d b y d e p o s i t i n g b a n k s , is s t a t e d in s u b s t a n c e below: 1. If a s e n d i n g b a n k a s s e r t s t h a t it h a s i n c u r r e d a fin a n c ia l loss d u e to t h e late r e t u r n o f a n item, its local F e d e r a l R e s e r v e office, w i t h o u t e x a m i n i n g th e c i r c u m s t a n c e s of t h e c a s e , w ill , u p o n r e c e i p t of th e u n p a i d item w ith a l e tte r o r o t h e r w r i t t e n s t a t e m e n t d e s c r i b i n g th e c i r c u m s t a n c e s of late r e t u r n a n d r e s u l t i n g d a m a g e s , r e v o k e t h e c r e d i t g r a n t e d th e p a y o r b a n k an d p ro v isio n a lly c r e d it the se n d in g b a n k 's account. 2. If (w ith in 15 b u s i n e s s d a y s a f t e r a d v i c e t h a t c r e d i t h a s b e e n r e v o k e d ) t h e p a y o r b a n k a s s e r t s t h a t th e r e t u r n of t h e q u e s ti o n e d item w a s tim e ly a n d r e t u r n s t h e item a c c o m p a n i e d w ith a s t a t e m e n t of th e d e t a i l s of its tim e ly h a n d l i n g , th e local F e d e r a l R e s e r v e o ffice , a g a i n w ith o u t e x a m i n i n g th e c i r c u m s t a n c e s of th e c a s e , will g i v e c r e d i t to th e p a y o r b a n k a n d r e s t o r e th e c h a r g e to t h e s e n d e r ' s a c c o u n t . 3. If t h e b a n k s in v o l v e d w is h to d i s p u t e th e r e p r e s e n t a t i o n s m a d e in t h e s t a t e m e n t s d e s c r i b e d a b o v e , th e y a r e e x p e c t e d to c o r r e s p o n d d i r e c t l y w ith e a c h o t h e r to r e s o l v e th e d i s p u t e . D e p o s iti n g o r s e n d i n g b a n k s c la im in g c r e d i t for late r e t u r n item s u n d e r th i s p r o c e d u r e , in c e r t i f y i n g th e facts of c a s e , may follow t h e e n c l o s e d e x a m p le . This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - We h o p e t h a t b a n k s , in m a k i n g u s e of t h i s n ew p r a c t i c e , will m ake a p p r o p r i a t e a l l o w a n c e s fo r r e a s o n a b l e time la p s e s u s u a l l y o c c u r r i n g in th e c h e c k c o lle c tio n c y c l e a n d will limit c l a im s f o r a d j u s t m e n t to o b v i o u s c a s e s of d e l a y e d retu rn s. R e v i s i o n s to B u ll e ti n s 8 a n d 11 will b e f o r w a r d e d to y o u r b a n k in th e near future. If a n y q u e s t i o n s o r c o m m en ts a r i s e w ith r e s p e c t to t h e s e p o l i c i e s , p l e a s e c o n t a c t J . A . C l y m e r , A s s i s t a n t V ic e P r e s i d e n t , a t (214) 651-6337, o r th e a p p r o p r i a t e o ffic e r a t o u r El P a s o , H o u s t o n , o r S a n A n to n io B r a n c h . Sincerely y o u rs , T . W. P la n t F i r s t V ic e P r e s i d e n t E nclosure To: FEDERAL RESERVE BANK OF T h e d i s h o n o r e d c h e c k d e s c r i b e d belo w a n d a t t a c h e d is b e i n g s e n t b a c k to you b e c a u s e of LATE RETURN: 1. A m o u n t _________________________ 2. Dated ___________________________ 3. D r a w n b y (M ak er) ______________________________________________________________________ 4. P a y a b l e to (P ayee) ______________________________________________________________________ 5. C h e c k No. _____________________ 6. H a n d le d b y o u r b a n k ( s e n d i n g b a n k ) a s a c a s h item a n d s e n t t o ______________________ ________________________________in c a s h l e tte r d a t e d ____________________________ to ta lin g ______________________ , t a p e total __________________________ , listed b e t w e e n item s for ____________________ a n d ______________________ . 7. H a n d le d b y th e d r a w e e o r p a y i n g b a n k a s a c a s h item on (date) ______________________ 8. R e c e iv e d on (d ate) ___________________________ from y o u r b a n k in r e t u r n item le tte r d a t e d _________________________, t o t a l i n g ____________________________ , ta p e total __________________________ , li st e d b e t w e e n item s f o r ______________________ a n d We claim t h a t t h i s item, a c c o r d i n g to o u r r e c o r d s a n d t h e t h e item, w a s r e t u r n e d b y t h e p a y i n g b a n k a f t e r its endorsem ents a n d s t a m p s on m id n ig h t d e a d lin e , a n d wec e rtify that, a s to n o tic e of d i s h o n o r of t h e item, w e r e c e iv e d : (____ ) w i r e n o tice on (date) _____________________________ ( ____ ) no n o tice o t h e r t h a n t h e r e t u r n e d it em . (CHECK ONE) We f u r t h e r c e r t i f y t h a t s u c h d e l a y in r e t u r n c a u s e d u s to i n c u r a f in a n c ia l l o s s , in t h a t PLEASE CREDIT OUR ACCOUNT PROVISIONALLY AND ADVISE. 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