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F ederal reserve Bank of Dallas DALLAS. TEXAS 75222 C irc u la r No. 79-26 F e b ru a ry 12, 1979 OBTAINING AND PROCESSING PHOTOCOPIES OF LOST CASH ITEMS TO ALL BANKS IN THE ELEVENTH FEDERAL RESERVE D IS T R IC T : Effective F e b ru a ry 15, 1979, a ll Federal Reserve offices w ill adopt the follow ing uniform p rocedure fo r the collection of photocopies of lost cash items; the term "lost cash Item" does not include lost T re a s u ry Checks o r lost Postal Money O rd e rs . O BTAINING AND PROCESSING PHOTOCOPIES M issing Item Procedure 1. A Federal Reserve office w ill: a. A d just w ith the paying financial institution fo r an item, package, or bundle listed not enclosed, p rovided that the item, package, or bundle was missing d u rin g fir s t pass (in -p ro o f) processing and reported w ith in 5 business days follow ing date of the cash letter listin g the item. ( If reported m issing a fte r the 5 business d ays, procedures a re outlined in our C irc u la r No. 76-5 dated Jan u ary 13, 1976.) Note: Items discovered m issing d u rin g the second and sub sequent pass processing at paying financial institutions o r th e ir processing centers should be reproduced from m icrofilm made p r io r to o r d u rin g in -p ro o f processing or a photocopy should be requested w ithout e n try . b. C harge back im m ediately to the sending financial institution those items discovered m issing d u rin g Federal Reserve firs t pass p ro c e s s in g . c. C harge back to the sending financial institution w ith in 20 business days those missing items adjusted w ith the paying Banks and others are encouraged to use the follow ing incoming W A T S numbers in contacting this Bank: 1 -8 0 0 -4 9 2 -4 4 0 3 (intrastate) and 1-8 0 0 -5 2 7 -4 9 7 0 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) -2flnancial institution and those items discovered m issing from Federal R eserve second and subsequent pass processing. Note: Adequate time a fte r processing date should be p rovided before ch arg e back is effected to d e te r mine if in tern al offsets can be located. HANDLING PHOTOCOPIES 2. T h e Federal R eserve Banks w ill handle photocopies fo r immediate c re d it through check adjustm ent channels if, w ith in 30 business days from date of charge by the local R eserve office serv in g the sending in stitu tio n , that institution provides to the R eserve office o rig in a tin g the charge (a) a photocopy of the item or items (in cases of reported missing packages o r bundles) charged b ac k, each photocopy bearing a c u rre n t bank endorsem ent and an attached indem nity agreem ent as c u rre n tly re q u ire d , and (b) a copy of the local R eserve office charge back notice. If the photocopy and re q u ire d documentation a re not supplied w ith in the 30 b u s i ness day p e rio d , the sending bank should deal d ire c tly w ith the paying bank. 3. T h e Federal Reserve w ill continue to accept photocopies in cash item channels, th e re b y p ro v id in g a system fo r the collection of large num bers of items in cases w h ere an e n tire check shipm ent is lost o r d estroyed. A c c o rd in g ly , the Federal R eserve w ill p ro v id e c re d it for cash letters containing only photocopies of e n tire cash item shipments lost o r destroyed en route to a Federal Reserve office and w ill process such photocopies as cash items provided: a. T h e sending bank fir s t determ ines that several items contained in the lost or destroyed shipm ent rem ain u np aid. b. T h e re su ltin g photocopy cash letter be submitted as a non-m achinable cash letter and id en tify as containing photocopies of a lost or destroyed check shipm ent. c. Each photocopy bears a c u rre n t endorsem ent of the sending bank and an indem nity agreem ent as c u rre n tly re q u ire d . Note: When a cash letter containing many checks has been lost or des tro ye d , sending financial institutions should be encouraged to send photocopies as they become availab le ra th e r than w a it until the reconstruction of the e n tire lost cash letter is com pleted. Upon receip t of cash letters containing o nly photo copies, b u t before processing, the rece ivin g Reserve -3- office should trace several of the photocopies to paying banks to determ in e if the o rig in a l checks rem ain u n p a id . 4. The adjustm ent departm ents in Federal R eserve offices w ill handle the photo copies (except those photocopies presented fo r paym ent u n d er parag raph 3 above) and the paying fin a n cial institutions w ill accept an immediate charge fo r the photocopies presented fo r paym ent. RETURN OF PHOTOCOPY BY PAYOR IN S T IT U T IO N 5. Immediate c re d it w ill be granted to the paying financial institution by the Federal R e serve, upon the re tu rn of a photocopy handled u n d er this p ro c ed u re, provided: a. T h e photocopy is retu rn ed through re tu rn item channels w ith in the m id nigh t deadline fo r any of the same reasons that the o rig in a l m ight be re tu rn e d . b. T h e d ra w e r o f the o rig in a l item refuses to p erm it payment of the photo copy o r the paying financial institution is unable to contact the d ra w e r and re tu rn is made w ith in 20 business days a fte r the date of ch arg e by its local Federal R eserve office. Photocopies re tu rn ed u n d er this p ro vision must be made through check adjustm ent channels and must be accompanied by a signed statement that the d ra w e r has refused payment o f the photocopy o r that the financial institution has been unable to contact the d ra w e r. c. T h e o rig in a l item has been p a id . T h e paying financial institution must re tu rn through check adjustm ent chan n els, a photocopy, the o rig in a l of w hich has been p a id , w ith in 20 business days a fte r the date of ch arg e by its local Federal R eserve office. A photocopy subm itted in this m anner must be accompanied by a photocopy (fro n t and back) of the paid o rig in a l item, a copy of the Federal R eserve charge advice and complete source of rece ip t docum entation. Note: When the source of receip t of the o rig in a l item is a Reserve office other than the R eserve office p rese n t ing the photocopy, the charge (accompanied by a photocopy, fro n t and b ack, of the paid o rig in a l item, copy of ch arg e ad v ice and complete source of receip t docum entation) w ill be made to the R eserve office o rig in a tin g the photocopy. -46. A n y photocopies re tu rn e d by the paying financial institution a fte r 20 business d ay s, b u t w ith in 9 months a fte r the date of charg e b y its local Federal Reserve o ffice, w ill be handled by the Federal Reserve on a w ithout e n try basis. Sup portin g documentation re fe rre d to in p arag rap h 5 .c . above w ill be re q u ire d . GENERAL 7. Photocopies of cash items w ill no longer be handled as noncash items. H o w ever, photocopies of certain noncash items w ill continue to be handled as noncash item s, in accordance w ith B u lletin No. 9, entitled "Collection of Noncash Item s." 8. Items located a fte r a photocopy has been presented fo r payment may be fo rw ard e d d ire c tly (w ith o u t e n try ) to the local Federal R eserve office for p ro p e r disposition. Revision to B u lletin 8, entitled "Collection of Cash Items" and B u lletin 11, en titled "In stru ctio n s to C ollecting and Paying Banks" w ill be fo rw ard e d to your bank in the near fu tu re . If any questions or comments a ris e w ith respect to these pro ced u res, please contact L a rry J . R eck, A ssistant V ic e President a t this B ank, E x t. 6337; R obert W. S c h u ltz, A ssistant V ice President at the El Paso B ran ch , (915) 544-4730; V ern on L . B artee, A ssistant V ic e President a t the Houston B ran ch , (713) 659-4433; o r Thomas H . Robertson, A ssistant V ic e President at the San Antonio B ran ch, (512) 224-2141. S in ce re ly y o u rs , R obert H . Boykin F irs t V ice President