View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

F ederal R eser ve Bank
OF DALLAS
W IL L IA M

H . W ALLACE

DALLAS, TEXAS 75222

f i r s t VICE PRESIDENT

May 5, 1988

AND CHIEF OPERATING OFFICER

Circular 88-31

TO:

The Daylight Overdraft Coordinator
or the Chief Executive Officer of
the financial institution addressed

SUBJECT
Implementation of recent changes in the Federal Reserve's daylight
overdraft program — reduction of sender net debit caps
DETAILS
On July 30, 1987, the Federal Reserve Board adopted several changes
in its daylight overdraft policy, one of which concerned the reduction of
sender net debit caps. The text of these changes was provided to financial
institutions in Circular 87-54, dated August 4, 1987. This circular gives
additional details about the current cap reductions.
Reduction of Sender Net Debit Caps
According to the policy, the current levels of sender net debit caps
were to be reduced by 25 percent in two stages. An initial 15 percent
reduction went into effect January 14, 1988. The remaining reduction to a
level 25 percent lower than the original caps will become effective May 19,
1988.
The cap levels, set as multiples of adjusted primary capital, will be
as follows:
May 19, 1988 and After
Net Debit Cap
Cap Class

Single-Day Avg.

High
Above Avg.
Avg.
No Cap

2.25
1.875
1.125

0.0

Plus

Two-Week Avg.

0.0

For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are
encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800)
527-9200 (interstate).

1.50
1.125
0.75

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

-

2

-

An institution is expected to avoid incurring daylight overdrafts
that, on average over a two-week period, exceed the two-week average cap, and,
on any day, exceed the single-day cap. Since an institution establishes a cap
category (i.e., high, above average, average) based on a self-evaluation, it
will not be necessary to resubmit a board resolution in light of the cap
reductions. The cap reductions do not affect de minimis caps.

MORE INFORMATION
For further questions concerning cap reductions, please contact
Assistant Vice President John R. Phillips at (214) 651-6265, Robert G. Feil,
Manager, at (214) 651-6690, Paul T. Elzner, Daylight Overdraft Analyst, at
(214) 698-4439, or James D. Smith, Daylight Overdraft Analyst, at (214)
651-6140.
For general questions about the daylight overdraft program, please
contact any of the above individuals or Senior Vice President George C.
Cochran, III, (214) 651-6257, Senior Vice President James L. Stull, (214)
698-4286, Vice President Robert D. Hankins, (214) 651-6120, or Vice President
Larry M. Snell, (214) 651-6199.
Sincerely yours,

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