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Federal Reserve bank OF DALLAS W ILLIA M H. W A L L A C E F IR S T V IC E P R E S ID E N T September 7, 1990 d a lla s , te x a s 75222 A N D C H IE F O P E R A T IN G O F F IC E R Circular 90-58 TO: The Chief Operating Officer of each financial institution in the Eleventh Federal Reserve District SUBJECT Bulletin 12 - Check and Return Item Settlement and Delivery DETAILS Bulletin 12 has been revised to cover the automatic charge or credit for all commercial cash letters and return item letters, as well as related adjustments, that we make for a financial institution in the Eleventh Federal Reserve District. It also covers our offpremises delivery of cash letters and presentment of return item letters under Regulation CC. This Bulletin replaces both our current Bulletin 12 and Bulletin 13. It covers all institutions that were previously covered under Bulletin 13. The agreement forms relating to Bulletins 12 and 13 have also been revised into one agreement form (TR-383), titled "Automatic Charge/Credit Agreement." Our Form TR-411, authorizing us to deliver cash letters to a processing center, has been revised to cover, in addition, our presentment of return letters as required under Regula tion CC. Our new TR-411 form is titled "Letter of Authority to Deliver Cash Letters and/or Return Letters." Copies of these forms are in Bulletin 12 as Exhibits I and II. ENCLOSURE Enclosed is revised Bulletin 12, which replaces both Bulle tin 12 and Bulletin 13. Please insert it in your Bulletins binder and discard the old Bulletins 12 and 13. For additional copies of any circular, please contact the Public Affairs Departm ent at (214) 651-6289. Bankers and others are encouraged to use the follow ing toll-free num ber in contacting the Federal R eserve 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 - MORE INFORMATION For additional information, please contact Robert L. Whitman, (214) 698-4357, at the Dallas Office; Eloise Guinn, (915) 544-4730, at the El Paso Branch; Luke E. Richards, (713) 652-1544, at the Houston Branch; or Herb Barbee, (512) 224-2141, at the San Antonio Branch. For additional copies of this circular, please contact the Public Affairs Department at (214) 651-6289. Sincerely yours, m BULLETIN 12 CHECK and RETURN ITEM SETTLEMENT and DELIVERY FEDERAL RESERVE BANK OF DALLAS # SCOPE This Bulletin sets forth the terms and conditions under w hich the Federal Reserve Bank of Dallas and its branches at El Paso, Houston, and San Antonio will automatically settle to an account on the books of the Federal Reserve Bank for commercial cash letters, return item letters, and related adjust m ents or entries. It also covers this Bank’s off-premises delivery of cash letters and its presentm ent of return letters. 8 -9 0 BULLETIN 12 FEDERAL RESERVE BANK OF D ALLAS BULLETIN 1 2 CHECK AND RETURN ITEM SETTLEMENT AND DELIVERY TABLE OF CONTENTS Paragraphs G e n e ral........................................................................................................................ 1—3 Method of p a y m e n t.................................................................................................. 4-7 Advices and a d ju stm e n ts........................................................................................ 8-9 Credits for cash letter deposits, return letter deposits, and other credit or debit entries for adjustment or service charges................................. 10-11 T im in g ......................................................................................................................... 12 Delivery and p rese n tm e n t....................................................................................... 13-14 S u c c e ssio n ................................................................................................................. 15 S uspension................................................................................................................. 16 T e rm in a tio n ............................................................................................................... 17 Right to a m e n d ........................................................................................................... 18 Exhibit I—Automatic Charge/Credit Agreement Exhibit II—Letter of Authority to Deliver Cash Letters and/or Return Letters 8 -9 0 i FEDERAL RESERVE BANK OF DALLAS BULLETIN 12 GENERAL METHOD OF PAYMENT 1. This Bulletin provides for paym ent by automatic charge to an account at a Federal Reserve Bank m aintained or used by a bank (as paying or deposi tary bank) for the gross amounts of cash letters and return letters received from this Bank and for other credits or debits and fees in connection w ith cash letters, cash items, return letters, or returned checks handled or accounted for by this Bank. This Bulle tin also provides for requests for delivery and pre sentm ent of cash letters and return letters, if appli cable, to locations other than the premises of the Bank. This Bulletin is issued pursuant to Sections 4, 13, 14(e), and 16 of the Federal Reserve Act and related statutes and in conformity w ith the provi sions of related statutes and Subpart A of Regula tion J and Subpart C of Regulation CC of the Board of Governors of the Federal Reserve System. It is binding on each party interested in an item this Bank handles. 4. If paym ent for cash letters and return letters is to be m ade by charge to an account on our books or by charge to another bank’s account (correspondent bank) on our books or on the books of another Federal Reserve Bank (by arrangement), the respon dent bank m ust execute our Automatic Charge/ Credit Agreement (“autocharge agreement”), Form TR-383. By execution of the agreement, the bank also agrees to the terms of this Bulletin and our Bulletins 8 and 10, w hich pertain to the collection and return of cash items. If the settlement is to be posted to another bank’s account on our books, the correspondent bank m ust authorize such action and agree to the terms of this Bulletin by signing the autocharge agreement. 5. We charge the account m aintained or used by the paying bank for the gross am ount of cash letters on the banking day of receipt of the cash letters, as provided in Section 210.9 of Regulation J and Bul letin 8. We charge the account m aintained or used by the depositary bank for the gross am ount of return letters on the banking day of receipt of the return letters, as provided in Section 229.32 of Regulation CC and Bulletin 8. 2. The definitions of terms set forth or incorporated in Regulation J, including terms defined in Regula tion CC, and terms defined in this Bank’s Bulletin 8 apply in this Bulletin, except as otherwise pro vided. The term “respondent” is defined as a bank or nonbank payor that receives from or presents to this Bank cash items or returned checks for paym ent or credit. The term “correspondent” is defined as a bank that settles for another bank through its own account at the Federal Reserve Bank. Many terms used in this Bulletin have specialized meanings that have developed through law, custom, and/or com mercial usage. Unless otherwise stated, references such as “this Bank,” “w e,” “us,” and “our” are to the Federal Reserve Bank of Dallas and its branches at El Paso, Houston, and San Antonio. 6. A bank paying for cash letters or return letters by a charge to its own account agrees to m aintain to its credit, in its reserve or clearing account on our books, a balance of actually and finally collected funds sufficient to cover charges under this Bulletin and all other charges to the bank’s account. 7. If paym ent for cash letters or return letters is to be m ade by a charge to a correspondent bank’s account on ourbooks, the correspondent bank agrees to m aintain to its credit, in its reserve or clearing account on our books, a balance of actually and finally collected funds sufficient to cover charges under this Bulletin and all other charges to the bank’s account. Unless otherwise agreed by the respondent bank and its correspondent bank, the 3. This Bulletin also applies to any state or political subdivision of a state to w hich we present direct as cash items any bills, notes, and warrants that are issued by the state or political subdivision and that are payable in the Eleventh Federal Reserve District. 8 -9 0 1 FEDERAL RESERVE BANK OF DALLAS respondent bank agrees to m aintain in its account w ith the correspondent bank a balance, free from any encumbrance, sufficient to cover all charges under this Bulletin, and the correspondent bank may debit and credit to the respondent bank’s ac count the am ount of any debit or credit m ade by us to the correspondent bank’s account under this Bulletin w ith respect to the respondent bank. But we assume no responsibility for any obligations of the respondent bank and its correspondent bank to each other. ADVICES AND ADJUSTMENTS 8. We send to a bank and to its correspondent bank an advice of charge for our cash letter or return letter. The bank m ust notify us, by a telephone call to the Customer Assistance Division at the Dallas Office or to the Adjustm ent Division at the appropri ate branch, of nonreceipt of a cash letter or return letter. The bank m ust notify, by prescribed forms, the Adjustm ent Division of the office that sent the cash letter or return letter of a difference exceeding $1.00 between the am ount of the items received in a cash letter or return letter and the am ount of an advice of charge. If we receive prom pt notice, we will make an appropriate credit or debit to the account m aintained or used by the respondent bank. If a bank subsequently receives the cash letter, return letter, or item that was credited by us upon receipt of a notice of nonreceipt or difference and it is not covered by another advice of charge, the bank m ust prom ptly notify the Adjustm ent or Return Division of the office that sent the cash letter or return letter. We will charge the account m aintained or used by the bank for the letter or item. We reserve the right to make appropriate as-of adjustments for reserve purposes if we do not receive prom pt notice. See Bulletin 8 for the handling of m issent items. 9. An account holder m ust notify us prom ptly of any objection to our statement of account regarding charges or credits for cash items, cash letters, return letters, or adjustments thereto. BULLETIN 12 CREDITS FOR CASH LETTER DEPOSITS, RE TURN LETTER DEPOSITS, AND OTHER CREDIT OR DEBIT ENTRIES FOR ADJUSTMENT OR SERVICE CHARGES 10. Under this Bulletin, we also credit or debit the account m aintained or used by a bank for cash letters sent to us by the bank for collection, for return letters sent to us by the bank for return, for other causes in connection w ith cash letters and return letters sent by the bank to us for collection and return, and for cash letters and return letters re ceived by the bank from us, including service charges. We send advices of credit or debit to the bank and a correspondent bank. Settlement for noncom m er cial cash letters (U. S. Treasury checks, savings bonds, postal money orders, and food coupons) is not covered under this Bulletin. 11. We give credit for cash items or return checks that are sent w ith our perm ission to a relay station m aintained by us upon receipt at this Bank’s office. Senders are responsible for filling out receipts for deposits at a relay station, and we have no respon sibility for identifying items lost betw een a relay station and our office. TIMING 12. Deferred credits or debits will be posted to a designated account at the time of origin. Because we process 24 hours a day, it may be necessary to post some entries (online adjusting entries and off-site cash letter charges) to a newly designated account one banking day before the designated effective date on the autocharge agreement. DELIVERY AND PRESENTMENT 13. We may make delivery and presentm ent to locations other than a bank’s own premises, as provided in Bulletin 8 and this Bulletin. If a bank wants delivery or presentm ent of cash letters or return letters to be made to a location other than its BULLETIN 12 FEDERAL RESERVE BANK OF DALLAS own premises, either w ithin or w ithout the territory of our processing office, or if a bank has not made other arrangements and we m ust mail its return letters to that bank, it m ust execute our Letter of Authority to Deliver Cash Letters and/or Return Letters, Form TR-411. A bank agrees that any loss of, damage to, or expenses of tracing and duplicating any item occurring after delivery or presentm ent thereof by us and before return of any such item to us shall be at its risk and expense. A bank also agrees to hold us harmless from any loss incurred by reason of, or arising out of, any delivery or mailing by us hereunder and for any loss incurred by reason of, or arising out of, the respondent bank’s failure to perform any of its obligations. A bank further agrees to comply with the provisions of Regulation J, Regu lation CC, our Bulletin 8, and this Bulletin, includ ing the timely return of unpaid items, as if such cash letters had been delivered directly to the respondent bank. 14. If a bank appoints a processing organization to receive its items, it also appoints and entitles the processing organization to be an agent for the bank to make the notifications and requests called for in our bulletins and regulations and to forward return checks to us. This appointm ent of the processing organization as agent does not relieve the respon dent bank of any liabilities to this Bank under this Bulletin or otherwise. SUCCESSION 15. A name change, merger, or succession does not term inate an agreement hereunder. However, we request that a new agreement be filed w ith us in a timely manner. SUSPENSION 16. A correspondent or respondent bank may sus pend its authorization for a specific daily automatic charge to its account by delivering w ritten notifica tion to an officer of the Financial Planning and Control Department or Payments M echanism De partm ent at the respondent bank’s local Federal Reserve office by 1:00 p.m. If the respondent bank suspends an automatic charge, it m ust furnish other acceptable and timely paym ent to us or the charge will stand. If the correspondent bank suspends a specific daily automatic charge, it also m ust notify an officer of the respondent bank by 1:00 p.m. The charge will be made to the correspondent bank’s account unless rem ittance in an alternative form acceptable to this Bank is received by the end of our banking day. The suspension does not affect the continuing existence of the autocharge agreement, w hich remains in place until terminated. TERMINATION 17. Agreement to this Bulletin may be term inated by this Bank, the respondent bank, or the correspon dent bank (as to payment) and by this Bank, the respondent bank, or the processor (as to delivery and presentment) by delivery of a written notice or replacem ent agreement. Notice to this Bank will be effective five (5) banking days after receipt of the notice by us or on another day, specified in the notice, that is agreeable to us. Termination by this Bank will be effective at the time stated in our notice. Termination will not affect our right to make entries to the account for all cash letters or return letters handled or dispatched by us and for all adjustments initiated by us before the term ination. RIGHT TO AMEND 18. We reserve the right to amend this Bulletin and any appendix, exhibit, or supplem ent to it at any time. EXHIBIT I AUTOM ATIC CHARGE/CREDIT AGREEMENT To: Federal Reserve Bank of Dallas at □ Dallas □ El Paso □ Houston □ San Antonio T h e _________________________________________________________________ , respondent bank, and ____________________________________________________________________ , correspondent bank (if applicable), agree to the terms and conditions set forth in your Bulletin 12 for the automatic charging and crediting of entries pertaining to the collection and return of cash items. We, the respondent bank and/or correspondent bank, hereby authorize the Federal Reserve Bank to make entries to our account as follows: □ □ 1 (a) Charge correspondent's account for cash items drawn on respondent. (b) Charge respondent's account for cash items drawn on it. □ 2 (a) Charge/creditcorrespondent'saccountfor return letters and subsequentcash letteradjustments. (b) Charge/credit respondent's account for return letters and subsequent cash letter adjustments. □ □ □ 3 (a) Credit correspondent's account for commercial cash letters deposited by respondent and make related adjustments thereto. (b) Credit respondent's account for commercial cash letters it deposits and make related adjust ments thereto. Service fees will be posted to the same account as the related service. This agreement will become effective on _____________________ and should be received at the Federal Reserve no later than five (5) business days before the stated effective date. We, the party(ies) below, have caused this agreement to be executed by our duly authorized officer(s). Name of Respondent Bank Routing Number(s) Location ( ) Telephone Number City Mailing Address City Authorized Signature State ZIP Printed Name and Title We agree to be the correspondent bank for the above-named respondent bank and agree to the terms and conditions set forth in your Bulletin 12. We authorize you to charge and/or credit our account on your books, as evidenced in this agreement. Name of Correspondent Bank Routing Number (Account) Mailing Address Authorized Signature City TR-383 (8-90) State ZIP Printed Name and Title EXHIBIT II LETTER OF AUTHORITY TO DELIVER CASH LETTERS AND/OR RETURN LETTERS To: Federal Reserve Bank o f Dallas at □ Dallas □ El Paso □ Houston □ San Antonio The (Name, Office, Routing N um ber of the Depository Institution) hereby requests you to make presentment of all drafts, checks, and other cash items drawn on us and being presented by or through your Bank to our agent (processor), listed below, by the delivery of said items to processor o rto its messenger. By making this request,this institution agrees to the terms and conditions set forth in Regulation J and Regulation CC of the Federal Reserve Board of Governors, Federal Reserve Bank of Dallas' Bulletins 8 and 12 pertaining to the collection and return of cash items, and any amendments and changes to the regulations and bulletins that may be made hereafter. Name of Processor (Agent) Telephone Number Delivery Location City State ZIP Routing Number We also request and authorize the delivery of our return letters as indicated below. Check One: □ Please deliver our return letters with our cash letters to our processor. Processor has agreed to accept our return letters and other settlement documents from the Federal Reserve. □ Please make our return letters available for pickup at the Federal Reserve office. □ Please mail our return letters to us. □ Other:______________________________________________________________________ ■ This agreement will become effective o n _______________________ and should be received at the Federal Reserve no later than five (5) business days before the stated effective date. Routing Number(s) Name of Respondent Bank Location ( ) Telephone Number City Mailing Address City TR-411 (8-90) Authorized Signature State ZIP Printed Name and Title
@FedFRASER