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Federal R eserve Bank
OF DALLAS
TO N Y J . SALVAGGIO

DALLAS, TE X A S
7 5 2 6 5 -5 9 0 6

F I R S T V IC E P R E S ID E N T

December 13, 1993
Notice 93-125

TO:

The Chief Operating Officer of
each financial institution in the
Eleventh Federal Reserve District
SUBJECT
Operating C ircu la r 10
(Rules Regarding Cash Items)
DETAILS

The Federal Reserve Bank of Dallas
has begun renaming and reissuing
its Bulletins as Operating Circulars in order to conform to the language used
in the Uniform Commercial Code. Accordingly, Bulletin 10 is being reissued as
Operating Circular 10 (Rules Regarding Cash Items).
In connection with this reissue, there are no substantial changes to
the Operating Circular.
ENCLOSURE

Circulars

Enclosed is Operating Circular 10.
Please file it in
your Operating
(Bulletins) binder and discard the
old
version.
M RE INFORMATION
O

For more information, please contact Terry Campbell at (214)
922-6603, at the Dallas Office; Eloise Guinn, (915) 521-8201, at the El Paso
Branch; Luke Richards, (713) 652-1544, at the Houston Branch; or Herb Barbee,
(210) 978-1402, at the San Antonio Branch.
For additional copies of this B a n k ’s notice or Operating Circular
10, please contact the Public Affairs Department at (214) 922-5254.
Sincerely,

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

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

Operating Circular
F e d e r a l

R e s e r v e

B a n k

of

D a l l a s

Rules Regarding
Cash Items

Scope
O p eratin g C ircular 10 sets fo rth certain rules u n d e r w hich credit for cash item s sent by d epository
in stitu tio n s to this B ank for collection will be available in th e reserve o r clearing accounts o f the
sending dep o sito ry in stitu tio n s o r th e ir co rresp o n d en ts. It also contains several rules regarding
th e so rtin g a n d p rep a ra tio n o f cash letters sent to us.
This O p eratin g C ircular, along w ith R egulation J o f th e B oard o f G overnors o f th e Federal Reserve
System a n d certain o th e r O p eratin g C irculars o f this Bank, constitutes a p o rtio n o f th e c o n tract
u n d e r w hich cash item s are h a n d le d for collection by us.

F e d e ra l R e se rve B a n k of D allas

12-93

fefetoofC 5
ontn

Operating
rcula

10

RULES REGARDING CASH ITEMS
Paragraphs
D efin itio n s...................................................................................................
Available and availability
Day o f dispatch
Day o f receipt
D irect sending
C onsolidated shipm ents
Im m ediate a n d deferred credit item s
N onm achineable item s
O th er references

1-8

Im m ediate an d D eferred A vailability................................................... 9 -14
Im m ediate credit
D eferred credit, availability co m p u tatio n
D eferm ent o f one b anking day
D eferm ent o f two banking days
Conflicting holiday schedules
Availability table
Cash L e tte rs.................................................................................................. 15-20
Sorting
M ixed cash letters
Fine sort cash letters (package sort)
Special deposits
D escription
D ating, identification, a n d contents
Cash Letters to O th er Federal Reserve O ffic e s ......................................2 1 -2 3
C onsolidated shipm ents
D irect sendings
Availability on holidays
Right to A m e n d ..........................................................................................

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F e d e ra l R e s e rv e B ank of D allas

24

D e f in it io n s
Available and Availability
1. “Available” and “availability” refer to the
granting of credit by this Bank in the sender’s
reserve or clearing account or in the account of
its correspondent for cash items forwarded to us
for collection or handled by direct sending.
Day of Dispatch
2. “Day of dispatch” means the day a direct
sending depository institution actually dispatches
a direct sent cash item or such other day as we
direct in paragraph 10 of this Operating Circular.
Day of Receipt
3. “Day of receipt” means the day a cash item
sent to us for collection is received, if received
before the closing hour. For cash items received
on our nonbanking days or after closing hours,
the day of receipt is our next banking day.

crumpled or (b) bearing faulty or inadequate
MICR (magnetic ink character recognition)
encoding. If a sender does not use high-speed
automated check processing equipment, the
term includes cash items that, by observation, are
unqualified for high-speed automated check
processing under the preceding criteria.

Operating
Circular

10

Other References
8. Several definitions, rules of construction, and
other provisions applicable to this Operating
Circular are found in our Operating Circular 1
(Bulletin 1), General Provisions, and are incorpo­
rated herein by reference. In addition, certain
terms used in this Operating Circular are defined
in Regulation I of the Board of Governors of the
Federal Reserve System.

IMM EDIATE AND DEFERRED
A v a il a b il it y
Immediate Credit
9. Cash items entitled to availability on the day
of receipt are shown as immediate credit items in
our fee schedule.

Direct Sending
4. “Direct sending” refers to the sending of cash
items direct to a Federal Reserve office other than
that which normally serves the sender, as pro­
vided in paragraph 16 of Operating Circular 8.
Consolidated Shipments
5. “Consolidated shipments” means other
Federal Reserve territory items that have been
sorted and packaged to a specific Federal Reserve
Bank or Regional Check Processing Center
(RCPC) and are combined with our cash letters
and sent to the respective Federal Reserve office.

Deferred Credit, Availability Computation
10. Availability for deferred credit items will be
computed from the day of receipt or, in the case
of direct sending, from the day of dispatch. In
certain situations, we reserve the right to com­
pute availability from a day other than the day of
receipt or dispatch. In the case of direct sending,
if we direct that availability be computed from a
day other than the day of dispatch, the desig­
nated day will be treated as the day of dispatch.
Deferment of One Banking Day

Immediate and Deferred Credit Items
6. “Immediate credit item” means a cash item
entitled to availability on the day of receipt, as set
out in paragraph 9 of this Operating Circular.
“Deferred credit item” means any other cash
item.
Nonmachineable Items
7. As used in this Operating Circular, the term
“nonmachineable cash items” means cash items
that cannot be introduced into, or are rejected by,
a sender’s high-speed automated check process­
ing equipment because of their physical condi­
tion, including items (a) mutilated, torn, or
12-93

11. Deferment of one banking day means that
credit will be available on our first banking day
after the day of receipt or, in the case of direct
sending, after the day of dispatch. Such defer­
ment is given for deferred credit items (most of
which bear the immediate credit routing symbol)
collectible through designated Federal Reserve
offices, a current list of which will be furnished
on request.
Deferment of Two Banking Days
12. Deferment of two banking days means that
credit will be available on our second banking
day after the day of receipt or, in the case of

F e d e ra l R ese rve B a n k of D allas

1

D e f e r r e d A v a il a b il it y

Day of Receipt or
Day of Dispatch

D a y T h a t C re d it
If Deferred
One Banking Day

om es A v a ila b le
If Deferred
Two Banking Days

Monday

Tuesday

Wednesday

Tuesday

Wednesday

Thursday

Wednesday

Thursday

Friday

Thursday

Friday

Monday

Friday

Monday

Tuesday

Saturday

Monday

Tuesday

Sunday

Monday

Tuesday

direct sending, after the day of dispatch. Such
deferment is available for all deferred credit items
not covered in paragraphs 10 and 11.
Conflicting Holiday Schedules
13. It should be noted that deferment of avail­
ability is based on this Bank’s banking days, or
actual collection time if applicable, notwith­
standing the fact that payor banks may observe a
different schedule of banking and nonbanking
days.
Availability Table
14. The above table illustrates typical deferred
availability. However, it does not take into
account holidays observed by us.

C a s h L e tte r s

in other Federal Reserve territories, U.S. Trea­
sury checks, postal money orders, and redeemed
U.S. savings bonds. Credit for checks in mixed
cash letters is based on availability as calculated
by the local Federal Reserve office. An institution
desiring to use this service should consult with its
local Federal Reserve office for additional
information and deposit forms.
Fine Sort Cash Letters (Package Sort)
17. We will accept deposits of endpoint-sorted
cash letters composed of sealed packages that are
labeled with the sending and paying bank’s name
and routing number, show the am ount of the
cash letter, and are accompanied by the proper
deposit forms. The required deposit forms will
be supplied on request.
Special Deposits

Sorting
15. Except as provided in paragraph 16 of this
Operating Circular, senders should sort items in
separate cash letters for the various categories
listed in our fee schedule. For unsorted cash
letters that are subject to the sorting require­
ments of this paragraph, availability may be
deferred for the longest period applicable to any
item in the cash letter.
Mixed Cash Letters
16. Mixed cash letters contain unsorted checks,
which can be any mixture of city, country, and
RCPC checks. These cash letters may also
contain checks drawn on depository institutions

18. Computer-processed cash items deposited to
take advantage of later closing hours must be
prepared in accordance with stipulated sorts and
conditions. Information and schedules will be
supplied on request.
Description
19. Cash items may be deposited with this Bank
and other Federal Reserve Banks without
description, except for a listing by individual
amounts. However, each sender should maintain
adequate records to enable it to identify its
depositors or other indorsers in the event any
such items are lost, destroyed, or otherwise
uncollectible and nonreturnable.

F e d e ra l R e se rve B a n k of D allas

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Dating, Identification, and Contents

Operating
Circular

10

20. Each cash letter and tape listing should be
dated and identified with the name and routing
number (if any) of the sender. It would be
helpful if no more than 300 items are listed on
each machine tape.

C a s h L e t te r s t o O t h e r
F e d e r a l R eser ve O f fic e s
Consolidated Shipments
21. Cash letters of items payable in other Federal
Reserve cities and districts will be accepted by us
for consolidated shipments to the applicable
banks when appropriately packaged and ad­
dressed and when received before closing hour.
Credit will be given according to current sched­
ules, which will be supplied on request.
Direct Sendings
22. Banks may be authorized by us to send cash
items direct to other Federal Reserve Banks and
will be furnished a schedule of availability on
direct sendings. Cash letters sent direct should be
dispatched in sufficient time to be delivered
before the closeout hour at the collecting Federal
Reserve Bank or RCPC.
Availability on Holidays
23. Availability for all inter-District direct
sendings of cash items (city, country, and RCPC)
will be passed to direct sending banks based on
the holiday schedule of the receiving Federal
Reserve offices. Reserve account allowances will
be provided for direct sent cash letters where
such availability would normally be due when we
are closed but the receiving Federal Reserve
office is open. Similarly, credit for cash letters
sent direct in the reverse circumstances will be
deferred.

R ig h t t o A m e n d
24. We reserve the right to withdraw or amend
this Operating Circular and any supplements to
it at any time.

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F e d eral R ese rve B a n k of D allas

3

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