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l l★K Federal Reserve Bank of Dallas 2200 N. PEARL ST. DALLAS, TX 75201-2272 HELEN E. HOLCOMB FIRST VICE PRESIDENT AND CHIEF OPERATING OFFICER February 13, 2004 Notice 04-07 TO: The Chief Operating Officer of each financial institution and others concerned in the Eleventh Federal Reserve District SUBJECT Amendments to Operating Circular 3 (Collection of Cash Items and Returned Checks) DETAILS The Federal Reserve Banks have amended Operating Circular 3 (OC3), Collection of Cash Items and Returned Checks. This notice contains a brief summary of the OC3 revisions but does not describe all the provisions of the circular or provide complete details on the revisions. In addition to several minor technical changes, the amendments include three substantive additions to the coverage of OC3: SM • FedImage Informational Services, • Electronic Adjustments and the Documents to Follow Archive (DTF Archive), and • Settlement and Adjustment Services for same day settlement (SDS) items. Although these services are not new, the amendments standardize the terms under which we offer the services. 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. -2Changes in the body of OC3 • In sections 2.1 and 6.1, new language prevents a sending bank from sending any items to a branch of a Reserve Bank that no longer processes checks. • New sections 12.2 and 12.3 permit depository institutions to make adjustment requests electronically (12.2) and to submit copies of documents for storage in and retrieval from the DTF Archive (12.3). These services are described in greater detail in new Appendix H. • New section 16.3(d) adds FedLine® Web-Check to the permissible methods by which a payor bank may request a Reserve Bank to send a notification of nonpayment to a bank of first deposit. • New language in section 19.8 makes it clear that the sending bank, and not the Reserve Bank, is responsible for the proper preparation of a photocopy in lieu of a missing or destroyed item. • In section 19.9(c), reference to the former section 19.6(b) has been deleted because that section was deleted from OC3 in a previous amendment. Changes in Appendix F • Former section 4.0 has been deleted. This section described the terms of our SM image services. Image services are now covered by Appendix I, FedImage Informational Services. • A new section 4.8 has been added to provide for settlement and adjustment services for SDS items. Some Reserve Banks have been providing this service under separate agreements. • A new sentence at the end of section 5.1 clarifies that a Reserve Bank that provides SDS and adjustments services does not thereby become a collecting bank with respect to the SDS items. • Under new language in section 6.1, a payor bank that obtains settlement and adjustment services with respect to SDS items indemnifies a Reserve Bank against the risk that a sending bank might make a claim against the Reserve Bank as a result of the settlement and adjustment services provided to the payor bank. Other changes • New language in section 1.1 of Appendix G expands the coverage of FedLine Web-Check to include electronic adjustments and the DTF Archive. -3• New Appendix H sets forth terms and conditions governing the use of electronic adjustments services and the DTF Archive. • New Appendix I sets forth terms and conditions governing the FedImage Informational Service. Appendix I supersedes any existing agreements for FedImage Services. The amendments become effective February 27, 2004. Please refer to the official current version of OC3 at www.frbservices.org/OperatingCirculars/index.html. From this web site, you may read, download, and print the operating circular. MORE INFORMATION For more information or to request a paper copy of an operating circular, please contact one of the following account executives: Rick Flansburg Michele Hitchings Jim McCammon Susan Vice Kathy Waggoner (210) 978-1661 (713) 652-9141 (214) 922-5491 (214) 922-5430 (713) 652-9146 Paper copies of this notice or previous Federal Reserve Bank notices can be printed from our web site at www.dallasfed.org/banking/notices/index.html. Sincerely,
@FedFRASER