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F ederal r e s e r v e Bank O F DALLAS W IL LIA M H. W ALLACE DALLAS, TEXAS 7 5 2 2 2 F IR S T V IC E P R E S ID E N T A N D C H IE F O P E R A T IN G O F F IC E R September 5, 1990 C i r c u l a r 90-54 TO: The Chief Operat ing O f f i c e r of each f i n a n c i a l i n s t i t u t i o n in t h e Eleventh Federal Reserve D i s t r i c t SUBJECT Amended B u l l e t i n 5 - Currency, Coin, and Food Coupons DETAILS B u l l e t i n 5 o f t h e Federal Reserve Bank o f D a l l a s (Currency, Coin, and Food Coupons) has been amended. The Federal Reserve System, in c onj un c t i o n with t h e Food and N u t r i t i o n S e r vi c e o f t h e U.S. Department o f A g r i c u l t u r e , has developed m o d i f i c a t i o n s designed t o enhance t h e r e c o n c i l i a t i o n of food coupons and c or re sp on di ng redemption c e r t i f i c a t e s . E f f e c t i v e Septem ber 1, 1990, t h e proc edure s c o n t ai n ed in Se c ti on 7 o f B u l l e t i n 5, governing food coupon d e p o s i t s , a r e amended as f ol l o w s : • One nonstandard s t r a p (fewer than 100 coupons) and one nonstandard bundle (fewer than 10 s t an d a r d s t r a p s ) per denomination may be inc lu de d with each deposit. In a d d i t i o n , redemption c e r t i f i c a t e s must accompany c or re spondi ng food coupons. • The value o f redemption c e r t i f i c a t e s on t h e Food Coupon Deposit Document must equal t h e t o t a l coupon amount d e p o s i t e d . Any d i f f e r e n c e s w i l l be brought t o t h e d e p o s i t i n g i n s t i t u t i o n ’ s a t t e n t i o n , and c o r r e c t i v e a c t i o n w i l l be taken as o u t l i n e d in t he pr oc edur e. • Before d e p o s i t a t t h e Federal Reserve, each redemp t i o n c e r t i f i c a t e must be MICR-encoded with an ABA number, t h e r e t a i l e r i d e n t i f i c a t i o n number, and t h e redemption c e r t i f i c a t e amount, acc ord ing t o t h e i n s t r u c t i o n s in t h e a t t a c h e d B u l l e t i n 5. For additional copies of any circular, please contact the Public Affairs Department at (214) 651-6289. Bankers and others are encouraged to use the following toll-free number in contacting the Federal Reserve Bank of Dallas: (800) 333-4460. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - F i n a n c i a l i n s t i t u t i o n s should send t o t h e Federal Reserve a l l food coupons and redemption c e r t i f i c a t e s in i n v e n t o r y with t h e f i n a l August 1990 d e p o s i t . All subsequent d e p o s i t s should comply with t h e modif ied p r o c e d u r e s . Fi n a n c i a l i n s t i t u t i o n s in t h e D a l la s t e r r i t o r y t h a t p a r t i c i p a t e d in t h e p i l o t program should c o n t i n u e t o d e p o s i t food coupons a cc or di ng t o t h e modified g u i d e l i n e s . Food coupons should be handled as v a l u a b l e s . N e i t h e r t h i s Bank nor t h e U.S. Department o f A g r i c u l t u r e i s l i a b l e f o r food coupons l o s t in t r a n s i t t o t h i s Bank. D epositor y i n s t i t u t i o n s may wish t o i n s u r e shipments or c o n t r a c t with an armored c a r r i e r t o d e l i v e r food coupons t o t h e Federal Reserve. ENCLOSURE Enclosed i s t h e amended B u l l e t i n 5. Pl e as e f i l e i t in your B u l l e t i n s b i n d e r and d i s c a r d t h e p re vi ous v e r s i o n . M ORE INFORMATION I f you have any q u e s t i o n s or would l i k e a d d i t i o n a l i n f o r m a t i o n , p l e a s e c o n t a c t Char les A. Worley, (214) 698-4275, a t t h e D a l la s O f f i c e ; D i e t e r Sta nc hos, (915) 544-4730, a t t h e El Paso Branch; Onezia Donaldson, (713) 652-1521, a t t h e Houston Branch; or David B. Sowell, (512) 224-2141, a t t h e San Antonio Branch. For a d d i t i o n a l c o p ie s o f t h i s c i r c u l a r or B u l l e t i n 5, p l e a s e c o n t a c t t h e Publi c A f f a i r s Department a t (214) 651-6289. S i n c e r e l y y o u rs , BULLETIN 5 CURRENCY, COIN, and FOOD COUPONS FEDERAL RESERVE BANK OF DALLAS SCOPE This Bulletin sets forth the general terms and conditions w ith respect to the currency, coin, and food coupon services provided by this Bank and the procedures that m ust be followed by depository institutions in their currency, coin, and food coupon transactions w ith us. 8-9 0 TABLE OF CONTENTS 4.05 4.10 4.15 4.20 4.25 Section 1, DEFINITIONS AND REFERENCES 1.00 Reference to Bulletin 1 1.05 Federal Reserve Act 1.10 Department of the Treasury Circular No. 55 Section 2, GENERAL Section 5, MISCELLANEOUS CURRENCY AND COIN 2.00 Agreement to the terms of this Bulletin 2.05 Unnecessary shipm ents to and from this Bank 2.10 Receipt and distribution of currency and coin 2.15 Transportation policy 2.20 Money bags 2.25 Packaging material 2.30 Access policy 2.35 Currency verification policy 5.00 5.05 5.10 5.15 5.20 Counterfeit or altered Foreign Gold coin and gold certificates M utilated currency Uncurrent coin Section 6, RISK OF LOSS 6.00 Shipments from or to depository institutions by armored carrier 6.05 Shipments from or to depository institutions by registered mail 6.10 Exceptions 6.15 Differences 6.20 Payment of losses and subrogation of rights of recovery by depository institution Section 3, SHIPMENTS FROM THIS BANK 3.00 Ordering currency and coin 3.05 Standard units 3.10 Closing hours and transportation schedules 3.15 Method of shipm ent 3.20 Advice of m oney shipm ent 3.25 Postal limitations 3.30 Verification of shipm ents 3.35 Entries to depository institution account Section 7, FOOD COUPONS 7.00 7.05 7.10 7.15 8.00 Section 4, SHIPMENTS TO THIS BANK 4.00 Control of shipments 8 -9 0 Preparation of currency shipm ents Method of shipping currency Preparation of coin shipm ents Method of shipping coin Entries to depository institution account i General Preparation of shipm ents Entries to accounts Liability Right to amend FEDERAL RESERVE BANK OF DALLAS Section 1, DEFINITIONS AND REFERENCES 1.00 Reference to Bulletin 1 A num ber of terms used in this Bulletin are defined in Bulletin 1. 1.05 Federal Reserve Act Federal Reserve notes are issued in accordance w ith Section 16 of the Federal Reserve Act. 1.10 Department of the Treasury Circular No. 55 Regulations governing the exchange of coin and paper currency of the U nited States are set forth in this circular. Section 2, GENERAL 2.00 Agreement to the terms of this Bulletin This Bulletin sets forth m inim um standards and procedures that should be followed by this Bank (including its Branches) and its client institutions during currency, coin, and food coupon transac tions. Any depository institution shipping or caus ing the shipm ent of currency, coin, or food coupons to, from, or for the account of this Bank shall, by such action, be deemed to have agreed to the terms and conditions set forth in this Bulletin. It is as sum ed that in most cases such standards will be acceptable to all parties. However, if circumstances arise that make im plem entation of these proce dures impracticable, this Bank will review, upon w ritte n request, the ad o p tio n of alternative arrangements. 2.05 Unnecessary shipments to and from this Bank Because of the high cost of m aintaining cash ser vices, the cooperation of depository institutions is requested to avoid unnecessary shipm ents. It is suggested that accum ulations of currency or coin be obtained from other depository institutions in the com m unity if they are available. Depository in BULLETIN 5 stitutions should anticipate their requirem ents and refrain from shipping to this Bank currency and coin fit for further circulation if m oney of the same denom ination is likely to be needed in the near future. The interchange of currency and coin by local depository institutions and the exercise of care in anticipating requirem ents will reduce ship m ents to and from this Bank. This Bank will assist depository institutions in such coin and currency arrangements. 2.10 Receipt and distribution of currency and coin All United States currency and coin will be received for credit, redem ption, exchange, or replacement, subject to the conditions stated herein and appli cable federal laws and regulations. This Bank will supply all available current denom inations of cur rency and coin, in accordance w ith the rules of this Bank and regulations of the Treasury Department. The am ount of new currency and coin shipped by this Bank will be governed by the am ount of fit currency and circulated coin on hand. 2.15 Transportation policy This Bank does not provide armored carrier ser vice for deposits and withdrawals of currency and coin. All depository institutions in the Eleventh Federal Reserve District are required to make their own arrangements for armored carrier service for the shipm ent of currency and coin. This Bank will schedule regular delivery dates for the shipm ent of coin and currency to depository institutions located in the Eleventh District. Depository institutions are required to arrange their own arm ored carrier service to conform to this Bank’s scheduling re quirements. Depository institutions m ust notify this Bank by official correspondence of their authorized carrier. 2.20 Money bags This Bank does not furnish m oney bags to deposi tory institutions. Bags bearing the name of the Federal Reserve Bank, the U nited States Mint, or BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS another institution may be used for m oney ship m ents to this Bank. Surplus empty bags of this Bank or other depository institutions should be returned to this Bank by armored carrier or fourth-class mail. The sender will be reim bursed for the expense. Empty bags bearing the nam e of a depository institution will be returned to that depository institution at the expense of this Bank. units, and each strap containing a discrepancy is returned to the depository institution. Financial institutions are perm itted to deposit unstrapped currency in 1,000-piece bundles, provided a Re serve Bank’s Letter of Acknowledgment agreement has been officially signed by the depositing institu tion and is on file w ith this Bank. Section 3, SHIPMENTS FROM THIS BANK 2.25 Packaging material All currency and coin packaging materials m ust be uniform and conform to existing ABA color stan dards and Federal Reserve packaging requirements. Information regarding such standards is available from this Bank. 2.30 Access policy The Federal Reserve Board has clarified the Federal Reserve System ’s policy w ith regard to access to Federal Reserve cash services. The Reserve Bank should offer to make payments to and receive deposits from all offices of depository institutions on an equal and impartial basis, w ithout charge, in accordance w ith the approved Uniform Cash Ser vice Standards for Federal Reserve Banks and con sistent w ith their capabilities to provide such service through m axim um utilization of available physical facilities. The frequency of access will norm ally be once per week to each authorized depository institution or office. Less or more fre quent access will be determ ined by volumes or by cost justifications but m ust be provided on an impartial basis to all similarly situated depository institutions. 2.35 Currency verification policy This Bank utilizes high-speed currency processing equipm ent to piece-count verify all currency re ceipts. Denominations of $1 and $2 are processed in 1,000-note units. Should a discrepancy be detected w ithin a 1,000-note unit, all 10 straps are returned to the depository institution because indi vidual strap identity is not available. Denom ina tions of $5 and larger are processed in 100-note 3.00 Ordering currency and coin Orders for currency and/or coin should be subm it ted by either the telep h o n e or through the RESPONSE Network two business days prior to the delivery date. As orders are received, the message is recorded. The individual submitting the order is required to give his name, nam e of depository institution, depository institution’s ABA number, and denom inations and amounts of currency and coin desired. The recorded message provides this Bank w ith the authority to charge the depository in stitution’s account. Depository institutions order ing currency and coin that do not w ish to have their account charged or credited for currency and coin transactions m ust request that a letter from their correspondent depository institution be forwarded to this Bank authorizing this Bank to charge or credit the correspondent depository institution’s account for currency and coin transactions, includ ing adjustments. A form for this purpose will be provided by this Bank upon request. Depository institutions served by the Eleventh District, where switching stations will carry a touchtone telephone signal, are required to submit cash orders through the RESPONSE Network or a voiceresponse system operated by this Bank. The Fed eral Reserve Bank Cash Department serving these institutions may be contacted for further informa tion regarding the voice-response system. 3.05 Standard units CURRENCY Currency is strapped in standard 100-piece pack ages per denomination. Orders for currency m ust BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS comply w ith one of the following guidelines: A. A n i n s t i tu t io n (a c o rp o ra te e n tity comprising the head office plus all branch offices) that orders currency in amounts exceeding an aggregate of $50,000 per week may order only the standard currency units as follows: Denomination Dollar Amount $ $ $ $ $ $ $ Ones Twos Fives Tens Twenties Fifties Hundreds 1,000 2,000 5,000 10,000 20,000 5,000 10,000 B. An institution that orders currency weekly or less frequently in amounts not exceeding an aggregate of $50,000 per week may order currency in the following standard units: Denomination Dollar Amount Ones Twos Fives Tens Twenties Fifties Hundreds $ $ $ $ $ $ 1,000 200 500 1,000 2,000 5,000 $ 10,000 C. An office (an individual branch or m ain office of an institution) that orders currency no more often than once each m onth may order less than the basic standard units regardless of the aggregate order of the insti tution as a whole. This Bank will establish its own m inim um order size for each currency denomination, based on regional needs. Denomination Cents Nickels Dimes Quarters Halves Dollars—Eisenhower Dollars—Susan B. A nthony Dollar Amoi $ $ $ $ $ $ $ 50 200 1,000 1,000 1,000 1,000 2,000 3.10 Closing hours and transportation schedules This Bank is closed on Saturdays, Sundays, and official bank holidays as set forth in Supplem ent A to Bulletin 1. Depository institutions are asked to keep this in m ind, as well as armored carrier and registered mail delivery schedules, in anticipating their cash requirements. Orders for currency and coin m ust be received at this Bank no later than 2:00 p.m. two business days prior to the delivery date. 3.15 Method of shipment Shipm ents of currency and/or coin from this Bank to depository institutions will be m ade by armored carrier in accordance w ith the transportation pol icy stated in paragraph 2.15 of this Bulletin, by fourth-class insured mail, or by registered mail, w hichever m ethod is appropriate under the cir cumstances. The actual cost of postage and insur ance to ship cash from this Bank, plus a handling fee, will be charged to the receiving financial institution. 3.20 Advice of money shipment A mail advice will be sent to depository institu tions covering each shipm ent made by registered and/or insured mail, and if the shipm ent is not received promptly, the Reserve Bank office making the shipm ent should be notified imm ediately by telephone or telegraph. COIN Coin is sacked in standard-sized bags, by de nom ination. Orders for coin m ust comply w ith the following standard units or m ultiples thereof: 8-9 0 In addition, a daily statement will be sent to each depository institution listing m oney shipments, as well as all other transactions, w ith this Bank. This statement should be reconciled by depository insti- BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS tutions on a daily basis to be sure that all shipm ents have been received and that their account has been charged correctly. 3.25 Postal limitations The U.S. Postal Service has im posed certain lim i tations and restrictions on the shipm ent of money to certain towns. Depository institutions affected have been apprised of these lim itations and restric tions, and their cooperation in this respect i$ solicited in placing orders w ith this Bank. Deposi tory institutions are also requested, as a practical measure, to place orders for currency and coin so that they can be dispatched for arrival and delivery on a business day. Postal authorities have ruled it unw ise to perm it the dispatch of m oney that w ould be held over at the receiving post office w hen the office is closed. 3.30 Verification of shipments All currency received from this Bank should be verified as follows: A. W ithin three business days of receipt by depository institutions that are served directly for their own use more than once a week. B. W ithin five business days of receipt by depository institutions that are served directly for their own use once a week or less fre quently. All coin received from this Bank should be verified w ithin five business days of receipt. The m oney shipm ent should be verified by two or more responsible employees in the presence and view of one another. Currency should be verified by piece count, whereas coin may be verified by piece count, by weight, or by roll count. Until veri fied, the currency and coin should be held under dual control. If a discrepancy is found upon verification, this Bank should be informed as soon as possible. If the exception relates to currency, the package strap and a copy of the shipping advice should be returned to this Bank. The procedure for reporting discrepancies located in new currency strapped or packaged by the Bureau of Engraving and Printing is as follows: A. The reporting depository institution sub mits to this Bank a w ritten explanation, signed by an official of the reporting institu tion, describing the procedure used to verify the shipm ent in w hich the discrepancy was located. B. The reporting institution returns to this Bank, w ith the w ritten report, the wrapping, label, and package strap involved w ith the claim; identification data for the missing note(s), including the denomination, series, and serial number(s), along w ith suffix let ters); and the date the shipm ent was received and the date it was verified. (Claims for an entire 100-note package discrepancy in a brick of new currency will not be honored unless the entire brick is returned, intact, to this Bank.) C. This Bank will forward the information to the appropriate division of the Treasury De partm ent and will make settlement once the Treasury response is received. D. Settlement will not be m ade for a differ ence alleged by an individual (customer) or commercial entity doing business w ith a financial institution. If the exception relates to coin, the attached tag(s) should be returned to this Bank. If an exception is found in a bag of M int coin, the M int bag should be returned to this Bank. W hen disbursem ent of cur rency or coin is made w ithout verification, this Bank will assume no liability. These guidelines all assume that the recipient depository institution (including its branches) verifies the deposit. Claims by client depository institutions other than the recipient depository institution or its branches will not be honored. FEDERAL RESERVE BANK OF DALLAS 3.35 Entries to depository institution account This Bank will charge the am ount of currency and coin shipm ent orders to the account, on the books of this Bank, m aintained or used by an ordering depository institution on the anticipated delivery date as determ ined by this Bank. Should a shipm ent of cash from this Bank not be received, the shipm ent charge will not be ad justed. For shipm ents debited after shipm ent by this Bank, the right is reserved by this Bank to adjust the time of debiting w hen it is deemed such adjustm ent is necessary, and this Bank will endeavor to give notice of such adjustment. The foregoing provisions do not alter the risk-ofloss provisions in this Bulletin. Section 4, SHIPMENTS TO THIS BANK 4.00 Control of shipments All shipm ents will be prepared and verified by two or more responsible employees of the shipping de pository institution. The sealed package should rem ain under the control of the same two employ ees until delivered to and receipted for by the armored carrier or until deposited and registered at the post office. 4.05 Preparation of currency shipments All currency included in each shipm ent m ust be straightened, sorted, and packaged by denom ina tion, face and top up, and be enclosed in standard ABA color-coded paper currency straps, each strap containing 100 notes, w ith the name and location of the sending depository institution, date of veri fication, amount, and identification of the em ployee counting the package appearing on each strap. Each standard package of 100 notes should be contained in a single, paper currency strap. As stated in paragraph 2.35 of this Bulletin, financial institutions are perm itted to deposit unstrapped BULLETIN 5 currency in 1,000-piece bundles per denom ina tion, provided this Bank’s Letter of Acknowledg m ent agreement has been officially signed by the depositing financial institution and is on file w ith this Bank. Currency shipm ents to this Bank m ust be bound in standard 100-piece packages per denomination. Shipments of currency m ust comply w ith one of the following: A. An institution (a corporate entity com pris ing the head office plus all branch offices) depositing currency in amounts exceeding an aggregate of $50,000 per week may deposit only the standard units or m ultiples thereof as follows: Denomination Ones Twos Fives Tens Twenties Fifties Hundreds Number of Straps 10 10 10 10 10 1-10 1-10 Dollar Amount $ 1,000 $ 2,000 $ 5,000 $ 10,000 $ 20,000 5,000-50,000 $ $ 10,000-100,000 B. An institution depositing currency weekly or less frequently in amounts not exceeding an aggregate of $50,000 per week may deposit currency in the following standard units or m ultiples thereof: Denomination Ones Twos Fives Tens Twenties Fifties Hundreds Number of Straps 10 1 1 1 1 1 1 Dollar Amount $ $ $ $ $ $ $ 1,000 200 500 1,000 2,000 5,000 10,000 C. An office (an individual branch or main office of an institution) depositing cu r FEDERAL RESERVE BANK OF DALLAS rency no more often than once each m onth may deposit less than the basic standard units, regardless of the aggregate deposit of the institution as a whole. This Bank will establish its own m inim um deposit size for each denomination, based on regional vol umes. Currency that cannot be bundled as described in the preceding tables because of insufficient quan tities of notes m ust be retained until enough currency of the appropriate denom ination has been accum ulated to complete standard strap and/or bundle units. Currency denom inations cannot be m ixed w ithin a strap or bundle. Unusual circum stances should be referred to this Bank in writing for authorization and approval. U nder no circumstances should rubber bands, pins, or clips be substituted for paper straps. Each unit m ust be securely tied so as to avoid collapse while in transit. W hen shipm ents are made by mail, the weight of all units allowed in one bag and under one registry is determ ined by postal regulations. Shipping costs can be reduced by placing a num ber of units in each bag; however, the bag should not exceed the weight allowed. On the date of shipm ent, if the currency is sent by registered mail, a notice m ust be mailed, under separate cover, to the Cash Department of this Bank, giving the date, amount, and description of the shipm ent. All other copies of the advice, excluding the shipping depository institution’s copy, m ust be enclosed w ith the shipm ent. If the currency is sent by armored carrier, the original copy of this notice m ust be handed to the armored carrier representative. W ith the exception of the shipping depository institution’s copy and copy provided the carrier, all other advice copies should be enclosed w ith the shipment. A supply of forms for this purpose will be furnished upon request. Torn notes should be carefully m ended on the back w ith transparent cellophane tape in such a m anner as to preserve the original design and visual iden tification of the face of the notes. Pins, clips, and BULLETIN 5 other metallic substances, if not removed, could cause injury to the handlers and damage the m achinery used in processing currency. Failure to comply w ith the foregoing impedes the process of handling and may delay final verification. Depository financial institutions are encouraged to consider the use of innovative means to ship cur rency to this Bank, i.e., boxes, trays, trunks, etc.; however, the use of such means m ust be approved by this Bank before being implemented. The con tents of all shipm ents m ust be enclosed in cloth, canvas, or plastic bags. Plastic bags should be of high quality, m inim um thickness of .005 mil, preferably fractional-melt and low-density poly ethylene. To reduce the risk of loss, this Bank strongly encourages depository financial institu tions to place currency bundles in bags, shrink wrap or cold-seal, before placing them in the final shipping bag. Should the depository financial institution elect not to use shrink-wrap or cold-seal internal preparation, this Bank strongly encourages the depository institution to secure the contents of the sh ip m en t in one bag and place this sealed bag in a second sealed bag before forwarding the ship m ent to this Bank. All bags m ust be well secured and sealed in a m anner acceptable to this Bank, the post office, or arm ored carrier at the place of mailing or dispatch. The seal on the bag should bear the identity of the shipping depository institution. Upon initial receipt of shipm ent at this Bank, should there be any evidence of a torn, damaged bag or broken, altered, loose, or im proper seal or any sign of tampering, the depositing institution will be contacted immediately for further h a n dling instructions. This Bank reserves the right to refuse to accept a shipm ent that is improperly prepared. Only unfit and excess fit currency should be shipped to this Bank. Depository institutions will not be allowed to ship fit currency to this Bank and then order the same denom ination of currency w ithin five business days. Deposits should be presorted by strap as to fit and unfit currency. BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS 4.10 Method of shipping currency 4.20 Method of shipping coin Currency of all denom inations shipped by deposi tory institutions should be forwarded by armored carrier or by registered mail w hen armored carrier service is not available. Depository institutions m ust make their own transportation arrangements. Shipments by registered mail m ust only be made w hen armored carrier arrangements cannot be made. This Bank will charge a handling fee for all shipm ents received by registered mail. Coin of all denom inations shipped by depository institutions should be forwarded by armored car rier if this service is available. If a depository institution is not on an arm ored route, shipm ents of coin should be m ade by registered and/or insured mail in accordance w ith existing postal regulations. This Bank will charge a handling fee for all shipm ents received by registered mail. 4.25 Entries to depository institution account 4.15 Preparation of coin shipments Coin m ust be shipped to this Bank, loose, in heavy canvas bags, each bag containing coin of only one denomination. A standard, ABA color-coded tag should be affixed to each bag showing the name of the shipping depository institution and denom ina tion of coin. In addition, the bags of coin m ust be securely sealed, and the seal should bear the identity of the shipping depository institution. Coin shipped to this Bank m ust be sacked as follows: Denomination Cents Nickels Dimes Quarters Halves Dollars—Eisenhower Dollars—Susan B. Anthony Dollar Amount $ $ $ $ $ $ $ 50 200 1,000 1,000 1,000 1,000 2,000 This Bank will return all bags of coin, at the sender’s expense, that do not comply w ith the above-mentioned requirem ents and may, also at the sender’s expense, return bags weighing out of tolerance. On the date of shipm ent, if the coin is sent by registered or insured mail, a notice m ust be mailed to the Cash Department of this Bank, giving the date, amount, and description of the shipm ent. If the coin is sent by armored carrier, this notice m ust be handed to the armored carrier representa tive. A supply of forms for this purpose will be furnished upon request. In general, this Bank will credit the account on its books, m aintained or used by a depository institu tion, on the day a shipm ent of currency and/or coin is received. However, for a depository institution that elects to utilize the Bank’s alternative credit procedures, credit will be given on the day cur rency and coin are shipped to this Bank if notifica tion is received in approved form before 2:00 p.m. that day. If notification is received late, this Bank will give credit on the next banking day. If notifi cation is not given, this Bank will give credit on the day the deposit is received. In most cases, credit, w hen notification is given, benefits only deposi tory institutions that are exempt from reserve requirem ents or whose vault cash exceeds their reserve requirements. Conditional credit is given for currency shipm ents, subject to subsequent verification. If a depository institution arranges or contracts for transportation of a shipm ent to this Bank, includ ing a shipm ent by mail, and the shipm ent is not received on the anticipated date of delivery as determ ined by this Bank, the credit will be re versed. For shipm ents credited prior to receipt by this Bank, this Bank reserves the right to adjust the time of crediting w hen it deems such adjustment necessary and will endeavor to give notice of such adjustment. The foregoing provisions on credit do not alter the risk-of-loss provisions in this Bulletin. FEDERAL RESERVE BANK OF DALLAS Section 5, MISCELLANEOUS CURRENCY AND COIN 5.00 Counterfeit or altered In accordance w ith Treasury Department regula tions, all counterfeit or altered currency and coin m ust be delivered to an agent of the U.S. Secret Service. Accordingly, all counterfeit currency and coin received by this Bank will be delivered to a Secret Service agent, whose receipt, fully describ ing the counterfeit currency or coin, will be m ailed to the depositor. 5.05 Foreign Foreign currency or coin will not be accepted for credit and, if received, will be returned to the shipping depository institution. 5.10 Gold coin and gold certificates Gold coins having a recognized special value to col lectors of rare or unusual coins, including all gold coins made prior to April 5, 1933, have been exempted from any surrender requirem ents and may be retained by the persons owning them. Gold certificates were w ithdraw n from circulation and surrendered to the U.S. Treasury under the provi sions of the Gold Reserve Act approved January 30, 1934. While today gold certificates are not redeem able in gold, they are redeemable at face value in Federal Reserve notes. 5.15 Mutilated currency A m utilated bill will be received at its face amount if clearly more than one-half of the original bill remains. Fragments that are not clearly more than one-half should be sent directly to the Treasury Department, Bureau of Engraving and Printing, OCRDS, BEPA Room 344, P.O. Box 37048, W ash ington, D.C. 20013, in accordance w ith Treasury Department Circular No. 55, copies of w hich will be furnished upon request. Such fragments will be exchanged at face value only if the Commissioner, Bureau of G overnm ent Financial Operations, BULLETIN 5 Department of the Treasury, is satisfied that the missing portions have been totally destroyed, and his judgment is based on such evidence of total destruction as he deems necessary and is final. 5.20 Uncurrent coin U ncurrent coins, defined in Treasury Circular No. 55 as whole U.S. coins that are merely w orn or reduced in weight by natural abrasion yet are readily and clearly recognizable as to genuineness and denom ination and that are machine-countable, are accepted for face value at this Bank. For the re dem ption of coins other than current coins or m achine-countable u n c u rre n t coins, refer to Treasury Circular No. 55. Copies of this circular are available from this Bank upon request. Section 6, RISK OF LOSS 6.00 Shipments from or to depository institutions by armored carrier Except as specifically provided in paragraphs 6.10 and 6.15 A, below, the risk of loss for mysterious disappearances of currency or coin from deposits w ith this Bank by armored carrier is assum ed as follows: A. W hen this Bank receives for deposit a bag or other container that is damaged, bears a broken, altered, loose, or im proper seal, or otherwise bears signs of tampering, and cur rency or coin has disappeared mysteriously from that bag or container, the sending de pository institution assumes the risk of loss for that m ysterious disappearance and shall resolve the matter solely w ith the armored carrier or its agents. To preserve the sending depository institution’s claim against the armored carrier, this Bank will note the condition of the bag or other container for special processing. B. W hen this Bank receives a deposit from w hich currency or coin has disappeared mysteriously and all bags or other containers BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS receiving depository institution assumes the risk of loss for that mysterious disappearance and shall resolve the matter solely w ith the armored carrier. The depository institution shall notify this Bank as soon as possible upon discovery of any m ysterious disappearance of currency or coin, regardless of w hether the m ysterious disappearance would cause a loss of the type for w hich this Bank assumes the risk. In a case as described in this subpara graph D, this Bank assumes no risk of loss unless this Bank receives satisfactory evidence that the mysterious disappearance occurred before the shipm ent was tendered to the armored carrier. in that deposit have been received in a wellsecured condition, bearing proper seals, the sending depository institution assumes the risk of loss for that m ysterious disappearance and shall resolve the matter solely w ith the armored carrier or its agents, unless the Bank receives satisfactory evidence that the m ys terious disappearance occurred after the Bank received the deposit, in w hich case this Bank assumes the risk of loss. Except as specifically provided in paragraphs 6.10 and 6.15 B, below, the risk of loss for mysterious disappearances of currency or coin from shipm ents to depository institutions from this Bank by armored carrier is assum ed as follows: If a mysterious disappearance of currency or coin or other loss is litigated in a court of competent jurisdiction and if the court finds that the loss shall be apportioned otherwise than in accordance w ith subparagraphs A through D, above, then the risk of loss shall be assum ed in accordance w ith and in the same proportions as those stated in the court’s opinion. In case of any such reapportionm ent of the risk of loss, the parties shall reim burse each other to the extent necessary to reflect the reapportion ment. This Bank’s decision as to the persuasiveness of evidence submitted to this Bank under this paragraph shall b in d all parties, in the absence of or until findings as to apportionm ent of loss are issued by a court of competent jurisdiction. C. W hen a depository institution receives a shipm ent containing a bag or other container that is damaged, bears a broken, altered, loose, or im proper seal, or otherwise bears signs of tampering, and currency or coin has dis appeared mysteriously from that bag or con tainer, the receiving depository institution assumes the risk of loss from that mysterious disappearance and shall resolve the matter solely w ith the armored carrier or its agents. The depository institution should note that, to preserve its right of action against the armored carrier, the depository institution should establish m anagem ent procedures providing for notice to the arm ored carrier’s m anagement that w ould enable the parties to arrange for appropriate handling of any bag or other container that bears visible signs of tam pering. Also, the depository institution shall notify this Bank as soon as possible upon discovery of a m ysterious disappearance of currency or coin described in this subpara graph C. 6.05 Shipments from or to depository institutions by registered mail A. W hen a depository institution ships cur rency or coin to this Bank by registered mail, the institution shall insure the shipm ent for full face value. Proceeds of the insurance should be payable to the sender. This Bank assumes no risk of loss for shipm ents of currency or coin to this Bank by registered mail. D. W hen a depository institution receives a shipm ent containing a bag or other container from w hich currency or coin has disappeared m ysteriously and all bags or other containers in that shipm ent have been received in a wellsecured condition, bearing proper seals, the 8 -90 B. On shipm ents to depository institutions by registered mail, this Bank will assume the risk of loss of currency and coin from the time 9 FEDERAL RESERVE BANK OF DALLAS this Bank delivers the currency and receives a receipt from the Service until the currency and livered to the addressee or its returned to this Bank. BULLETIN 5 and coin to U.S. Postal coin is de agent or is or indirect, proximate or remote, or be in whole or in part caused by, contributed to, or aggravated by risks assum ed by this Bank. This Bank will not assume any risk of loss in any of the following circumstances: C. Any loss caused by any dishonest, fraudu lent, or criminal act of an employee, agent, or contracted arm ored carrier service of any depository in stitu tio n shipping, causing, ordering, or receiving the shipment. 6.10 Exceptions A. Any loss in excess of $10 m illion on all shipm ents to this Bank by any one office of a depository institution on any one day. B. Any loss caused by or resulting from the following: 1. Hostile or warlike action in time of peace or war, including action in h inder ing, combating, or defending against an actual, impending, or expected attack a) By any government or sovereign power [de jure or do facto) or by an authority m aintaining or using military, naval, or air forces; or b) By military, naval, or air forces; or c) By an agent of any such government, power, authority, or forces; 2. Any w eapon of war employing atomic fission or radioactive force, w hether in time of peace or war; D. Any loss to the extent covered by any in surance, w hether prim ary or excess, carried by the depository institution shipping, caus ing, ordering, or receiving the shipment. E. Any loss on any shipm ent by any deposi tory institution not made in conformity with the provisions of this Bulletin. F. Any loss on any shipm ent during any trans portation not contracted for by this Bank. 6.15 Differences A. This Bank will not be responsible for the am ount by w hich a shipm ent of cash received by this Bank is less than the amount as stated by the shipping depository institution w hen the depository institution has not followed the preparation and shipm ent procedures in Section 4 of this Bulletin. B. This Bank will not be responsible for the am ount by w hich a shipm ent of cash received by a depository institution is less than the am ount as stated by this Bank w hen the depository institution has not followed the verification procedures in Section 3 of this Bulletin. 3. Insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental authority in hindering, com bating, or defending against such an occur rence, or confiscation by order of any government or public authority; 6.20 Payment of losses and subrogation of rights of recovery by depository institution 4. Nuclear reaction or radioactive con tam ination, all w hether controlled or u n controlled and w hether such loss be direct The am ount of any loss, the risk of w hich is assumed by this Bank under the terms of this Bul letin, will be paid prom ptly by this Bank upon BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS receiving from the depository institution sustain ing the loss, in a form satisfactory to this Bank, a w ritten proof of loss, receipt, and any other neces sary documents, including but not lim ited to an assignment of its rights, title, and interest in the lost property. The depository institution receiving any such paym ent shall take all necessary measures in behalf, and at the risk and expense, of this Bank for the recovery, reissue, or replacem ent of such prop erty, including the institution of legal proceedings in its own name, if deemed necessary by this Bank. Section 7, FOOD COUPONS 7.00 General This Bank will handle food coupons as cash items under an agreement between the Secretary of Agri culture, on behalf of the United States, and the Reserve Banks as depositaries and fiscal agents of the United States pursuant to authorization of the Secretary of the Treasury. As to matters that agree m ent does not cover, Regulation J, this Bulletin, and this Bank’s time schedules apply. This Bank re ceives food coupons only from (1) depository institutions that m aintain accounts w ith this Bank and that are (a) banks or savings associations insured by the Federal Deposit Insurance Corpora tion (FDIC) or (b) institutions insured under the Federal Credit Union Act and having retail stores or wholesale food concerns in their field of m em bership (“eligible credit u n io n s”) and from (2) FDIC-insured depository institutions and eligible credit unions that do not m aintain accounts with this Bank but that have made arrangements to send coupons to this Bank for crediting to the account of a depository institution m aintaining an account with this Bank. Other depository institutions should forward food coupons through ordinary collection channels. Depository institutions sending coupons should follow instructions of the U.S. Department of Agriculture for handling coupons (7 Code of Federal Regulations, part 278.5, August 15, 1984). This Bank will furnish additional information about the collection of food coupons on request. 7.05 Preparation of shipments Depository institutions should send redeem ed food coupons to the office of this Bank that m aintains the account to w hich the proceeds are to be credited. The procedure in preparing food coupons for shipm ent to this Bank is as follows: A. All coupons m ust be detached from book let covers. B. Any coupon accepted for redem ption m ust show on its back either (1) the AUTHORIZA TION NUMBER or (2) the name of the autho rized retail food store, meal service, or wholesale food concern, if any. Each coupon m ust be canceled by the first depository institution that receives it by indelibly marking “PAID” or “CANCELED” and the depository institution’s name or institutional identifier on the face of the coupon. No coupon should be endorsed by a depository institution. C. Food coupons m ust be sorted by denom i nation, face and top up, and enclosed in a paper strap. Under no circumstances will rubber bands, pins, or clips be accepted as substitutes for paper straps. Each strap should contain only food coupons, i.e., it should con tain no foreign material such as paper, adding m achine tapes, etc. D. The name and location of the shipping de pository institution, the amount, the date, and identification of the employee who counted the coupons m ust be plainly marked on each strap. E. Food coupons are to be assembled into standard straps and bundles as far as possible. However, a m axim um of one nonstandard strap and one nonstandard bundle per de nom ination m ay be included in each food coupon deposit. F. W hen food coupons are submitted for credit, a Food Coupon Deposit Document BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS (FCDD), Form FNS-521, properly prepared according to the accompanying instructions, m ust accompany the coupons. A mailing label (available from this Bank) m ust be affixed to the outside of the envelope or con tainer used for shipping coupons to this Bank, along w ith the name and address of the shipping depository institution. Do not in clude food coupons w ith any other matter sent to this Bank. Food coupons m ust be shipped in tam per-evident sealed packages or containers strong enough to ensure receipt at this Bank in a secure condition. G. The total amount of Redemption Certifi cates (RCs), Form 278B, included in each deposit m ust be equal to the total food coupon am ount declared on the FCDD. A depository institution m ust verify the am ount of the coupons being redeem ed by recording its count on each Redem ption Certificate and m ust subm it the com pleted Redem ption Cer tificate w ith its deposit. All RCs on hand at the time coupon shipm ents are prepared are to be m achine listed, a copy of the listing attached to the front of the bundle, and forwarded along w ith the food coupons to this Bank. The listing order should correspond to the order of the documents. In cases in w hich an institu tion submits more than 500 RCs in a deposit, these may be broken into smaller bundles of 200 to 300 RCs, w ith a listing for each bundle and a grand total. All pins, paper clips, rubber bands, extra adding m achine listings, and other foreign objects m ust be rem oved from the RCs prior to shipm ent to the Federal Reserve. All food coupon Redemption Certificates must be encoded (MICR) prior to deposit at the Federal Reserve. The encoding m ust be done in accordance w ith standard check encoding specifications. Steps have been taken to m ini mize the am ount of encoding required on the part of depository institutions. Depository in stitutions should plan to encode, at a m ini mum, the redeem ed dollar amount on all RCs, and in some cases, they may also need to encode the ABA num ber of the Food and N utrition Service (000001009) and the re tailer identification number. H. Failure to comply w ith these procedures may result in corrective measures up to and including refusal or returning of deposits. I. Food coupons should be forwarded as a separate deposit, handled as valuables, and should be directed to the attention of the Cash Department, Food Coupon Section. No provi sion is made by this Bank for reimbursing depository institutions for the cost of ship ping food coupons. J. In accordance w ith the regulations of the U.S. Department of Agriculture [7 C.F.R. 278.5(a), August 15,1984], a portion of a food coupon consisting of less than three-fifths of a whole coupon shall not be accepted for redemption. 7.10 Entries to accounts Conditional credit is given for properly prepared, redeem ed food coupons provided the deposit is re ceived at this Bank office by 2:00 p.m., subject to subsequent verification. Credit for food coupons will be made to the account of the shipping depository institution or to the account of the designated correspondent depository institution. Agreement forms will be provided by this Bank upon request for those depository institutions that wish to designate a correspondent through w hich credit will be received. 7.15 Liability Neither this Bank nor the Department of Agricul ture is liable for food coupons lost in transit to this Bank. Shipping depository institutions may wish to insure food coupon shipm ents and retain rec ords to assist in substantiating insurance claims for coupons lost in transit. BULLETIN 5 FEDERAL RESERVE BANK OF DALLAS -------------------- 8.00 Right to amend This Bank reserves the right to w ithdraw or amend any of the provisions of this Bulletin and its Appendixes, if any, w ithout notice, at any time. 8-9 0 13 •
