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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


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102