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F ederal reserve Ba n k DALLAS, TE X A S of Dallas 75222 Circular No. 81-64 April 1, 1981 FEE SCHEDULE FOR COMMERCIAL CHECK CLEARING AND COLLECTION SERVICES TO ALL DEPOSITORY INSTITUTIONS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: The Board of Governors of the Federal Reserve System, as required by the Monetary Control Act of 1980, has approved a fee schedule for its com m ercial check clearing and collection services, effectiv e August 1, 1981. Printed on the following pages is the te x t of the Board's press release and Federal Register notice, including the fee schedule and descriptions of its check services. Questions concerning the fee schedule or check services should directed to Larry J. Reck, Vice President a t this Bank, Ext. 6337; Robert Schultz, Assistant Vice President, El Paso Branch, (915) 544-4730; Vernon Bartee, Assistant Vice President, Houston Branch, (713) 659-4433; or Thomas Robertson, Assistant Vice President, San Antonio Branch, (512) 224-2141. be W. L. H. Sincerely yours, William H. Wallace First Vice President B a n k s a n d o t h e r s ar e e n c o u r a g e d to u s e th e f o llo w in g in c o m in g W A T S n u m b e r s in c o n t a c t in g th is Bank: 1- 800-442-7 140 (in tr a s t a te ) and 1-800-527-9 200 (in terstate). Fo r c a lls p l a c e d lo cally, p l e a s e us e 651 plus th e e x t e n s io n refe rred to above . This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERALRESERVEpres^^lease For immediate release March 27, 1981 The Federal Reserve Board has approved a fee schedule for its commercial check clearing and collection services, effective August 1, 1981. The Board acted in accordance with the Monetary Control Act of 1980, which requires the Federal Reserve to set fees for System services to depository institutions. The Board published a proposed schedule of fees for check services in August 1980 and adopted its fees for check services after consideration of comment received. The Board adopted pricing principles and a schedule of fees for other services last December. The fee schedule reflects estimated 1981 direct and indirect costs of providing check clearing and collection services to depository institutions, plus a 16 percent private sector adjustment factor. Attached are the fee schedule and the Board's official notice of its action, including descriptions of its check services. Attachments FEDERAL RESERVE SYSTEM (DOCKET NO. R-0324) FEE SCHEDULES FOR FEDERAL RESERVE BANK SERVICES AGENCY: Board o f Gov er no rs o f t h e F e d e r a l R e s er v e System. ACTION: Adoption o f Fee S c h e d u l e s f o r Check C l e a r i n g and C o l l e c t i o n S e r v i c e s . SUMMARY: The Monetary C o n t r o l Act o f 1980 ( T i t l e I o f P u b l i c Law 96-221) r e q u i r e s t h a t f e e s be s e t f o r F e d er al R e s er ve Bank s e r v i c e s . The Board p r e v i o u s l y ad o pt e d a s e t o f p r i c i n g p r i n c i p l e s f o r F e d e r a l R e s er v e Bank s e r v i c e s and has e s t a b l i s h e d i m p l e m e n t a t i o n d a t e s on which f e e s f o r each o f t h e s e r v i c e s w i l l become e f f e c t i v e . The Board has now a do p t e d f e e s f o r commercial check c l e a r i n g and c o l l e c t i o n s e r v i c e s . EFFECTIVE DATE: August 1, 1981. FOR FURTHER INFORMATION CONTACT: L o r i n S. Meeder, A s s i s t a n t D i r e c t o r f o r Fe de ra l Res er ve Bank O p e r a t i o n s ( 2 0 2 / 4 5 2 - 2 7 3 8 ) ; Morgan J . Hallmon, Program Manager ( 2 0 2 / 4 5 2 - 3 8 7 7 ) ; G i l b e r t T. S c h w a r t z , A s s o c i a t e General Counsel ( 2 0 2 / 4 5 2 - 3 6 2 5 ) ; Lee S. Adams, S e n i o r Counsel ( 2 0 2 / 4 5 2 - 3 6 2 3 ) ; Daniel L. Rhoads, Attorney (202/452-3711). SUPPLEMENTARY INFORMATION: INTRODUCTION The Monetary C o n t r o l Act o f 1980 r e q u i r e s t h a t f e e s be d e v e l o p e d f o r F e d er al Re s er ve Bank s e r v i c e s a c c o r d i n g t o a s e t o f p r i c i n g p r i n c i p l e s e s t a b l i s h e d by t h e Bo ar d. The Act p r o v i d e s t h a t t h e Board s h a l l b e g i n p u t t i n g i n t o e f f e c t a s c h e d u l e o f f e e s n o t l a t e r t h a n S eptember 1, 1981, and t h a t s e r v i c e s co v er e d by t h e f e e s c h e d u l e s a r e t o be made a v a i l a b l e t o a l l d e p o s i t o r y i n s t i t u t i o n s . The Boar d, i n a c c o r d a n c e w i t h t h e r e q u i r e m e n t s of t h e A c t , p u b l i s h e d f o r comment proposed p r i c i n g p r i n c i p l e s and f e e s c h e d u l e s f o r s e r v i c e s on August 2 8 , 1980 (45 FR 5 8 68 9 ). The p e r i o d f o r p u b l i c comment e x p i r e d on O c t o b e r 3 1 , 1980. On December 30, 1980, a f t e r c o n s i d e r i n g t h e more t h a n 230 comments r e c e i v e d from t h e p u b l i c , t h e Board to o k t h e f o l l o w i n g a c t i o n s : a dopt ed r e v i s e d p r i c i n g p r i n c i p l e s ; appr oved t h e f e e s c h e d u l e s f o r t h e w i r e t r a n s f e r and n e t s e t t l e m e n t s e r v i c e s t o be e f f e c t i v e J a n u a r y 29, 1981; approved a f e e s c h e d u l e f o r ACH s e r v i c e s t o be e f f e c t i v e August 1, 1981; appr oved August 1 , 1981 as t h e d a t e when p r i c i n g o f , and f u l l a c c e s s t o , check c l e a r i n g and c o l l e c t i o n s e r v i c e s would b e g i n ; s t a t e d t h a t a f i n a l f e e s c h e d u l e f o r check c l e a r i n g and c o l l e c t i o n s e r v i c e s would be p u b l i s h e d by March, 1981; s c h e d u l e d f u l l a c c e s s t o , and p r i c i n g o f , t h e p u r c h a s e , s a l e , s a f e k e e p i n g and t r a n s f e r o f s e c u r i t i e s s e r v i c e s and t h e noncash c o l l e c t i o n s e r v i c e s f o r O c t o b e r , 1981; and s c h e d u l e d f u l l a c c e s s t o , and p r i c i n g o f , t h e c u r r e n c y and c o i n t r a n s p o r t a t i o n and c o i n w rapp in g s e r v i c e s f o r J a n u a r y , 1982(46 FR 1 3 3 8 ) . The Board has now a d o p t e d a f e e s c h e d u l e f o r commercial check c l e a r i n g and c o l l e c t i o n s e r v i c e s . -2- 1981 FEE SCHEDULE The Monetary Co n t r o l Act of 1980 r e q u i r e s t h a t " o v e r t h e long r u n , f e e s s h a l l be e s t a b l i s h e d on t h e b a s i s o f a l l d i r e c t and i n d i r e c t c o s t s a c t u a l l y i n c u r r e d i n p r o v i d i n g t h e F ed er al Res er ve s e r v i c e s p r i c e d . . . e x c e p t t h a t t h e p r i c i n g p r i n c i p l e s s h a l l g i ve due r e g a r d t o c o m p e t i t i v e f a c t o r s and t h e p r o v i s i o n of an a d e q u a t e l e v e l o f such s e r v i c e s n a t i o n w i d e . " The Act a l s o r e q u i r e s t h a t f e e s f o r F e d e r a l R e s er v e s e r v i c e s t a k e i n t o a cc ou nt " t h e t a x e s t h a t would have been p a i d and t h e r e t u r n on c a p i t a l t h a t would have been p r o v id e d had t h e s e r v i c e s been f u r n i s h e d by a p r i v a t e b u s i n e s s f i r m . " T h i s markup i s r e f e r r e d t o as t h e p r i v a t e s e c t o r a d j u s t m e n t f a c t o r (PSAF). The proposed f e e s c h e d u l e f o r F e d e r a l Re s er ve Bank commercial check c o l l e c t i o n s e r v i c e s p u b l i s h e d by t h e Board i n A ug ust , 1980 was based on e s t i m a t e s o f t h e f u l l d i r e c t and i n d i r e c t c o s t s d u r i n g 1980 o f p r o v i d i n g t h e s e s e r v i c e s , p l u s a 12 p e r c e n t PSAF. The r e v i s e d f e e s c h e d u l e f o r commercial check s e r v i c e s , which w i l l become e f f e c t i v e on August 1, 1981, when a c c e s s t o t h e s e s e r v i c e s i s opened t o a l l d e p o s i t o r y i n s t i t u t i o n s , i s based on t h e e s t i m a t e d f u l l d i r e c t and i n d i r e c t c o s t s of p r o v i d i n g t h e s e s e r v i c e s i n 1981, p l u s a 16 p e r c e n t PSAF, which was adopt ed by t h e Board on December 30, 1980 f o r use i n c a l c u l a t i n g 1981 f e e s c h e d u l e s . On a v e r a g e , f o r a l l s e r v i c e s i n a l l o f f i c e s , t h e 1981 f e e s a r e 11 p e r c e n t h i g h e r t h a n t h o s e p u b l i s h e d f o r comment i n A ug ust , 1980 due p r i n c i p a l l y t o t h e h i g h e r PSAF added t o 1981 c o s t s , o p e r a t i n g c o s t s i n c r e a s i n g more r a p i d l y t h a n volume from 1980 t o 1981, and t h e s u b s t a n t i a l i n c r e a s e i n t h e s u r c h a r g e f o r c o n s o l i d a t e d s h ip m e n t s ( from 0 . 4 4 c e n t t o 0 . 6 4 c e n t p e r it em) which r e f l e c t s t h e h i g h e r i n t e r o f f i c e t r a n s p o r t a t i o n c o s t s a s s o c i a t e d with t h e S y s t e m ' s f l o a t r e d u c t i o n e f f o r t . However, in t h e r e v i s e d f e e s c h e d u l e , t h e p r i v a t e s e c t o r a d j u s t m e n t f a c t o r has not been a p p l i e d t o s h i p p i n g c o s t s b ec a us e s h i p p i n g s e r v i c e s ( i n t e r o f f i c e a i r t r a n s p o r t a t i o n and i n t r a o f f i c e ground c o u r i e r d e l i v e r i e s t o f a c i l i t a t e p r e s e n t ment) a r e p r o v id e d under c o n t r a c t t o t h e F e d e r a l R e s e r v e from p r i v a t e companies whose p r i c e s i n c l u d e t h e c o s t of t a x e s and f i n a n c i n g . Conse q u e n t l y , i t would be i n a p p r o p r i a t e t o impose an a d d i t i o n a l PSAF t o such shipping c o s t s . The 1981 f e e s c h e d u l e was c a l c u l a t e d by t h e F e d er al Res er ve Banks u s i n g a methodology s i m i l a r t o t h a t used t o compute t h e f e e s c h e d u l e pub l i s h e d by t h e Board i n August , 1980. The methodology was s t a n d a r d i z e d among F e d e r a l R es er ve d i s t r i c t s and o f f i c e s and t h e d e r i v a t i o n o f f u l l c o s t s was bas ed on t h e F e d er al R e s e r v e ' s P l a n n i n g and C o nt ro l System (PACS). The c o s t a c c o u n t i n g p r i n c i p l e s and p r o c e d u r e s used by R e s er v e Banks a r e d e s c r i b e d i n System a c c o u n t i n g manuals a v a i l a b l e t o t h e p u b l i c . The s t r u c t u r e o f t h e 1981 f e e s c h e d u l e d i f f e r s from t h o s e p u b l i s h e d e a r l i e r i n one r e s p e c t : i t shows a s e p a r a t e s u r c h a r g e f o r c o n s o l i d a t e d s h i p ments r a t h e r t h a n a s e p a r a t e p r i c e f o r each c o n s o l i d a t e d s hi pme nt d e p o s i t t y p e . To c a l c u l a t e t h e t o t a l f e e f o r d e p o s i t by c o n s o l i d a t e d shipment t h e -3- s u r c h a r g e i s added t o t h e f e e f o r d i r e c t d e p o s i t s a t t h e c o l l e c t i n g Fe de ra l Res er ve o f f i c e . S in ce t h e c o n s o l i d a t e d s hipme nt s e r v i c e has been expanded from two t o f i v e d e p o s i t t y p e s , use o f t h e s u r c h a r g e s i m p l i f i e s t h e p r i c e schedule. The 1981 f e e s t r u c t u r e may be r e g a r d e d as an i n t e r i m s t r u c t u r e in two r e s p e c t s . F i r s t , w h i l e i t c o v e r s t h e d e p o s i t t y p e s d e s c r i b e d i n Appen d i x I I , i n d i v i d u a l F eder al Res er ve o f f i c e s may, i n 1981, expand o r r e p a c k age t h e s e s e r v i c e s w i t h i n t h i s s t r u c t u r e i n r e s p o n s e t o l o c a l demand t o improve t h e e f f i c i e n c y o f t h e payments mechanism. For example, t h e group s o r t d e p o s i t o p t i o n may be o f f e r e d by a g r e a t e r number o f F e d e r a l Re s er ve o f f i c e s , o r a d d i t i o n a l s e r v i c e s may be o f f e r e d t h a t a r e c o m b i n a t i o n s o f e x i s t i n g s e r v i c e s . ( E . g . , t h e group s o r t , c o n s o l i d a t e d shipment and package s o r t d e p o s i t o p t i o n s may be combined f o r c e r t a i n high volume p ay o r bank e n d p o i n t s so t h a t t h e F e d e r a l Re s er ve o f f i c e o f f i r s t d e p o s i t c o u l d f i n e s o r t t h e d e p o s i t f o r f i n a l p r e s e n t m e n t i n o t h e r F e d e r a l Res er ve o f f i c e t e r r i t o r i e s . ) Second, as s t a t e d in t h e B o a r d ' s December 3 0 , 1980 n o t i c e , t h i s f e e s t r u c t u r e may be changed i n 1982 t o p r i c e s e p a r a t e l y r e t u r n i t ems and t o p r o v i d e p r i c e i n c e n t i v e s t o en co ur a ge more e f f i c i e n t u t i l i z a t i o n o f r e s o u r c e s i n t h e check c l e a r i n g and c o l l e c t i o n s e r v i c e . F i n a l l y , t h e F e d e r a l Res er ve Banks, as announced in t h e B o a r d ' s August 2 8 , 1980 p r i c i n g p r o p o s a l , a r e engaged i n t h e t h r e e - p h a s e e f f o r t t o r e d u c e a n d / o r p r i c e f l o a t . The f e e s c h e d u l e f o r 1981 d o e s , i n f a c t , r e f l e c t t h e h i g h e r c o s t s o f o p e r a t i o n a l improvements u n d e r t a k e n i n 1981 t o r edu ce f l o a t . F u r t h e r recommendations w i l l be p r e s e n t e d t o t h e Board i n 1981. The 1981 f e e s c h e d u l e f o r commercial check s e r v i c e s i s s e t f o r t h in Appendix I . The s e r v i c e s shown i n t h e s c h e d u l e a r e d e s c r i b e d i n Appendix I I . By o r d e r of t h e Board o f Gover nor s o f t h e F e d er al Res er ve System, March 2 6, 1981. (signed) James McAfee James McAfee A s s i s t a n t S e c r e t a r y o f t h e Board [SEAL] APPENDIX I FEE SCHEDULE FOR FEDERAL RESERVE COMMERCIAL CHECK SERVICES ( i n c e n t s p e r item) E f f e c t i v e August 1 , 1981 TYPES OF CASH LETTER DEPOSITS1 Acce pted o n ly from i n s t i t u t i o n s l o c a t e d i n t h e t e r r i t o r y s e rv e d by t h e F .R . o f f i c e O th er Mi xed Fed S en t To: Federal R eserve O ffice BOSTON LEWISTON WINDSOR LOCKS Accepted a t t h e c o l l e c t i n g F .R . o f f i c e from i n s t i t u t i o n s l o c a t e d in a n / F.R . o f f i c e t e r r i t o r y 2 Group Country Package o r RCPC S o rt S o rt City 5.54 1.81 4 .2 9 1 .6 0 1.81 0 .4 2 NEW YORK BUFFALO JERICHO CRANFORD UTICA 2.87 5 .3 0 2 .7 4 2.87 0.4 7 1 .6 6 3.99 1.51 1 .6 6 0 .7 9 1.46 6.08 PHILADELPHIA 2 .3 0 4 .6 4 1 .7 9 2.30 0 .8 7 1.98 5.33 1.92 4 .1 6 1 .4 8 1.92 0.82 — 5.12 1.85 1.97 1 .5 0 1.52 1.75 4.03 4 .3 7 3 .9 6 4.01 4 .1 0 1.39 1.67 1.29 1.37 1.40 1.85 1.97 1 .5 0 1.52 1.75 0.67 0.63 0 .4 9 0.44 0.5 2 1.86 4 .1 5 1 .46 1 .8 6 0 .9 8 2 .9 4 1 .57 1. 99 1.50 1 .82 5.02 3.98 4.J7 3 .7 9 4 .0 6 2.3 6 1.46 1.65 1.24 1.41 2 .9 4 1.57 1.99 1.50 1.82 0.94 0 .5 6 0.7 3 0 .4 8 0.61 2.51 4.54 2.0 6 2.51 0 .7 8 — 5.09 2 .2 2 4.68 1 .8 0 2 .2 2 0.5 2 2 .1 0 5.60 2 .8 0 1.63 1.90 1.76 4 .6 7 3 .9 7 4.11 4 .0 6 2 .1 2 1 .2 4 1.52 1.27 2 .8 0 1.63 1.90 1.76 0 .4 5 0.72 0 .6 7 0 .4 6 0.89 7 .5 5 7 .9 8 6 .9 4 6.26 2 .2 2 4 .6 4 1 .7 4 2 .2 2 0 .8 0 1 .6 4 7 .1 9 1.71 4 .1 2 1.54 1.71 0 .5 8 — 7.99 0.6 4 0.6 4 0 .6 4 0 .6 4 0 .6 4 CLEVELAND CINCINNATI PITTSBURGH COLUMBUS : ) ) ) ) RICHMOND BALTIMORE CHARLOTTE COLUMBIA CHARLESTON ATLANTA BIRMINGHAM JACKSONVILLE NASHVILLE NEW ORLEANS MIAMI CHICAGO DETROIT OES MOINES INDIANAPOLIS MILWAUKEE ST. LOUIS LITTLE ROCK LOUISVILLE MEMPHIS ) ) ) ) MINNEAPOLIS HELENA ) ) KANSAS CITY DENVER OKLAHOMA CITY OMAHA DALLAS HOUSTON SAN ANTONIO EL PASO SAN FRANCISCO LOS ANGELES PORTLAND SALT LAKE CITY SEATTLE 1.65 Non3 M a ch in eab le CONSnUDATO! SHIPMENT SURCHARGE PER ITEM FOR TRANSPORTATION FROM LOCAL F .R . OFFICE TO COLLECTING F.R. OFFICE 9 .0 4 - -- — 5.54 5.86 5 .2 4 4.68 5.30 6.13 6.29 3 .9 7 5.88 3.23 3.59 1 . D e p o s i t o r y i n s t i t u t i o n s sh o u l d c o n s u l t w ith t h e i r l o c a l F e d e r a l R e se r v e o f f i c e a b o u t t h e a v a i l a b i l i t y o f check s e r v i c e s a t any F.R. o f f i c e , s i n c e a l l s e r v i c e s a r e n o t a v a i l a b l e a t a l l o f f i c e s . 2 . Accepted by a F .R . o f f i c e f o r p r e s e n t m e n t t o d e p o s i t o r y i n s t i t u t i o n s l o c a t e d w i t h i n t h a t F .R . o f f i c e te rrito ry . 3 . T h is f o e a p p l i e s t o c a s h l e t t e r s t h a t cannot he com puter p r o c e s s e d by t h e F e d e r a l R e s e r v e . I t i s no t a s u r c h a r g e . The a v a i l a b i l i t y sc h e d u l e f o r n o n -m ach in eab le item s i s d i f f e r e n t from t h e a v a i l a b i l i t y s c h e d u l e f o r co m parable m a c h in e a h le i t e m s . APPENDIX I I DESCRIPTION OF FEDERAL RESERVE CHECK CLEARING AND COLLECTION SERVICES A. Service D e s crip tio n s^ All checks c o l l e c t e d t h r o u g h t h e F e d e r a l Re s er v e must u l t i m a t e l y be p r e s e n t e d f o r payment by t h e F e d e r a l R e s er v e o f f i c e r e s p o n s i b l e f o r s e r v i n g t h e t e r r i t o r y i n which t h e payi ng i n s t i t u t i o n i s l o c a t e d . D e p o s i t o r y i n s t i t u t i o n s g e n e r a l l y have two o p t i o n s f o r d e p o s i t i n g check c a s h l e t t e r s ^ w i t h F e de ra l Res er ve o f f i c e s . F i r s t , a l l check c a s h l e t t e r s may be d e p o s i t e d a t t h e l o c a l F e d er al Re s er v e o f f i c e ( i . e . , t h e F e d e r a l Res erv e o f f i c e whose t e r r i t o r y ^ i n c l u d e s t h e d e p o s i t i n g i n s t i t u t i o n ) . Seco nd , a p p r o p r i a t e l y s o r t e d ca sh l e t t e r s may be d e p o s i t e d a t t h e F e d e r a l Res er ve o f f i c e which s e r v e s t h e t e r r i t o r y i n which t h e paying i n s t i t u t i o n i s l o c a t e d . Not a l l s e r v i c e s d e s c r i b e d below a r e a v a i l a b l e a t a l l o f f i c e s . An i n s t i t u t i o n s h o ul d c o n s u l t w i t h i t s l o c a l F e d e r a l R e s er v e o f f i c e t o a s c e r t a i n t h e services available th e re. Cash l e t t e r s d e p o s i t e d a t t h e l o c a l F e d e r a l Re s er v e o f f i c e a r e r e f e r r e d t o g e n e r a l l y as i n t r a t e r r i t o r y d e p o s i t s , w h i l e c a s h l e t t e r s d e p o s i t e d a t o t h e r Fe de ra l Res er ve o f f i c e s a r e r e f e r r e d t o as i n t e r t e r r i t o r y d e p o s i t s . I n t e r t e r r i t o r y d e p o s i t s may b e : ( a) d e l i v e r e d t o t h e l o c a l F e d e r a l R es er ve o f f i c e f o r s h i p p i n g as " c o n s o l i d a t e d s h i p m e n t s " u s i n g t r a n s p o r t a t i o n p r o v i d e d by t h e F e d e r a l R e s e r v e , o r (b) s h i pp ed as " d i r e c t s h i p m e n t s " t o a n o t h e r F e d er al Res er ve o f f i c e u s i n g t r a n s p o r t a t i o n p r o v i d e d f o r by t h e s e n d i n g depository i n s t i t u t i o n . In a l l i n s t a n c e s , c r e d i t f o r ca s h l e t t e r d e p o s i t s i s p o s t ed t o a c c o u n t s h e l d a t t h e l o c a l Fe de ra l Res er ve o f f i c e of t h e d e p o s i t o r y i n s t i t u t i o n even t hough t h e s e ca s h l e t t e r s may have been d e p o s i t e d a t a n o t h e r Fe de ra l Reserve o f f i c e . T h i s d e s c r i p t i o n o f s e r v i c e s i s not i n t e n d e d as a c om pr ehens iv e g u i d e on how t o use F e d e r a l R e s er v e check c o l l e c t i o n s e r v i c e s . Any d e p o s i t o r y i n s t i t u t i o n d e s i r i n g t o u se Fed er al Res er ve s e r v i c e s i s urged t o c o n s u l t f i r s t with i t s l o c a l F e d e r a l Re s er v e o f f i c e . A d e p o s i t o r y i n s t i t u t i o n t h a t has a small number of c he c k s d a i l y f o r c o l l e c t i o n may need t o become f a m i l i a r o n l y w it h t h e mixed c a s h l e t t e r s e r v i c e o f f e r e d by i t s l o c a l F e d e r a l Res er ve o f f i c e . Any i n s t i t u t i o n w i s h i n g t o p er f or m some p r e l i m i n a r y work such as s o r t i n g o r i n t e r o f f i c e s h i p p i n g w i l l have t o become f a m i l i a r w i t h a l l o f t h e s e r v i c e s shown i n t h e f e e s c h e d u l e . 1 . E xc lu des F e d e r a l Re se rv e p r o c e s s i n g o f U.S. T r e a s u r y c he c k s and p o s t a l money o r d e r s d e p o s i t e d s e p a r a t e l y . 2 . A ca s h l e t t e r c o n t a i n s a l i s t i n g of i n d i v i d u a l checks and t h e packaged checks. 3 . A d e p o s i t i n g i n s t i t u t i o n u n f a m i l i a r w i t h F e d e r a l Res er ve t e r r i t o r i e s s h o u l d c o n t a c t any F e d e r a l Re s er v e o f f i c e t o d e t e r m i n e t h e name and a d d r e s s o f i t s l o c a l Fe de ra l Res erve o f f i c e . 1 1-2 The f o l l o w i n g t y p e s of c a s h l e t t e r d e p o s i t s e r v i c e s a r e a v a i l a b l e : Cash l e t t e r s a c c e p t e d o n l y from i n s t i t u t i o n s l o c a t e d w i t h i n t h e l o c a l Fe de ra l Res er ve o f f i c e t e r r i t o r y . The f e e s f o r t h e s e r v i c e s d e s c r i b e d below can be found on t h e f e e s c h e d u l e by r e a d i n g a c r o s s t h e row o f f e e s l i s t e d f o r each l o c a l Fed er al R e s er ve o f f i c e . a. Mixed Mixed ca s h l e t t e r s c o n t a i n u n s o r t e d ch ec k s t h a t can be any m i x t u r e o f c i t y , c o u n t r y , and RCPC c h e c k s . These c a s h l e t t e r s may a l s o c o n t a i n checks drawn on d e p o s i t o r y i n s t i t u t i o n s i n o t h e r F e d er al Re se rv e t e r r i t o r i e s and U .S . T r e a s u r y checks and p o s t a l money o r d e r s . Each F e d er al Re s er ve o f f i c e has e s t a b l i s h e d a maximum number o f i t e m s ( ch ec k s o r o t h e r ca s h i t e m s ) which may be i n c l u d e d i n mixed cas h l e t t e r s J Only d e p o s i t o r y i n s t i t u t i o n s w i t h cas h l e t t e r d e p o s i t s , which on av er a ge do not exceed t h i s maximum number of c h e c k s , a r e e l i g i b l e t o d e p o s i t mixed c a s h l e t t e r s . Credit for chec ks i n mixed ca sh l e t t e r s i s based on a v a i l a b i l i t y a s c a l c u l a t e d by t h e l o c a l F e d e r a l R e s er v e o f f i c e . b. O t h er Fed " O t he r Fed" c a s h l e t t e r s c o n t a i n che c ks drawn on d e p o s i t o r y i n s t i t u t i o n s l o c a t e d i n F e d e r a l R e s er v e t e r r i t o r i e s o t h e r t h a n t h e l o c a l Feder al Res erv e t e r r i t o r y . Prices fo r c o llec tin g these ch ec ks r e f l e c t t h e r e s o u r c e s r e q u i r e d t o s o r t each check a t two F e d er al Reserve o f f i c e s and t o t r a n s p o r t t h e i t ems between t h e s e o f f i c e s . " O t h er Fed" c a s h l e t t e r s may be d e p o s i t e d o nl y a t t h e l o c a l Feder al Re s er v e o f f i c e . 2 Cash l e t t e r s a c c e p t e d from i n s t i t u t i o n s l o c a t e d i n any F e d e r a l R e s er v e territory. The f e e s f o r check c a s h l e t t e r d e p o s i t s a r e d e t e r m i n e d a c c o r d i n g t o t h e f e e s f o r check p r o c e s s i n g a t t h e c o l l e c t i n g F e d e r a l Reserve o f f i c e , and can be found on t h e f e e s c h e d u l e by ( 1) l o c a t i o n o f t h e o f f i c e and (2) t y p e o f c a s h l e t t e r d e p o s i t . For e xample, i t ems drawn on d e s i g n a t e d c i t y a r e a i n s t i t u t i o n s w i t h i n t h e Boston o f f i c e t e r r i t o r y a r e "Boston c i t y i t e m s " , a r e i d e n t i f i e d by r o u t i n g symbols^ 0110 or 1. An i n s t i t u t i o n d e s i r i n g t o use t h i s s e r v i c e s h o u l d c o n s u l t w i t h i t s l o c a l F e d e r a l Re s er v e o f f i c e f o r a d d i t i o n a l i n f o r m a t i o n . 2 . A r o u t i n g symbol i s d e f i n e d as t h e f i r s t f o u r d i g i t s o f t h e r o u t i n g t r a n s i t number. For a l i s t i n g o f r o u t i n g symbol a s s i g n m e n t s by d e p o s i t t y p e w i t h i n Fe de ra l Res er ve t e r r i t o r i e s , d e p o s i t o r y i n s t i t u t i o n s s hou ld c o n t a c t t h e i r l o c a l F e d e r a l R e s er v e o f f i c e f o r a copy o f t h e b o o k l e t e n t i t l e d "Check C o l l e c t i o n , F e d er al Res er ve Sy st e m. " For a d e t a i l e d d i s c u s s i o n o f r o u t i n g numbers, d e p o s i t o r y i n s t i t u t i o n s s h o u l d c o n s u l t t h e Rand McNally p u b l i c a t i o n e n t i t l e d "Key t o Rou ti ng Numbers." 1 1-3 2110, and t h e f e e f o r such it ems i s 1 .60 c e n t s p e r i t e m . In c o n t r a s t , i t e m s drawn on i n s t i t u t i o n s l o c a t e d i n t h e I n d i a n a p o l i s o f f i c e RCPC zone a r e " I n d i a n a p o l i s RCPC i t e m s " , a r e i d e n t i f i e d by r o u t i n g symbols 0749 o r 2749, and t h e f e e f o r such i t e m s i s 1 .5 0 c e n t s p e r i t e m . Con s o l i d a t e d s hipme nts a r e s u b j e c t t o an a d d i t i o n a l .64 c e n t per item transportation fee. a. City C i t y c a s h l e t t e r s c o n t a i n o nl y c he c k s drawn on d e p o s i t o r y i n s t i t u t i o n s l o c a t e d w i t h i n t h e c o l l e c t i n g F e d e r a l Re s er v e o f f i c e t e r r i t o r y a s s i g n e d c i t y r o u t i n g symb ol s. These i n s t i t u t i o n s a r e g e n e r a l l y l o c a t e d i n an a r e a which has been d e s i g n a t e d as t h e c i t y check c l e a r i n g zone by t h e c o l l e c t i n g Fe de ra l Res er ve o f f i c e . When d e p o s i t e d a t t h e c o l l e c t i n g F e d e r a l R e s e r v e o f f i c e , c r e d i t f o r c i t y ca s h l e t t e r s i s immediate ( i . e . , f u n d s a r e a v a i l a b l e on t h e same day i f t h e cas h l e t t e r i s r e c e i v e d p r i o r t o t h e c u t - o f f hour e s t a b l i s h e d by t h e c o l l e c t i n g F e de ra l Res er ve o f f i c e . b. Regi onal Check P r o c e s s i n g C e n t e r (RCPC) RCPC cas h l e t t e r s c o n t a i n o n l y checks t h a t a r e drawn on d e p o s i t o r y i n s t i t u t i o n s i n t h e c o l l e c t i n g F e de ra l R e s er v e o f f i c e t e r r i t o r y t h a t a r e l o c a t e d i n a r e a s d e s i g n a t e d as RCPC zones! and a s s i g n e d RCPC r o u t i n g symb ol s. RCPC ch ec ks drawn on d e p o s i t o r y i n s t i t u t i o n s i n RCPC zones a r e u s u a l l y t r a n s p o r t e d by c o u r i e r from t h e c o l l e c t i n g F e d e r a l Res er ve o f f i c e f o r p r e s e n t m e n t . When d e p o s i t e d a t t h e c o l l e c t i n g Fe de ra l Re s er v e o f f i c e , c r e d i t f o r RCPC cas h l e t t e r s i s immediate ( i . e . , same b u s i n e s s day) i f t h e c a s h l e t t e r s a r e d e p o s i t e d by 12:01 a.m. c. Country Country cas h l e t t e r s c o n t a i n only c he c k s t h a t a r e drawn on d e p o s i t o r y i n s t i t u t i o n s l o c a t e d i n t h e c o l l e c t i n g F e d e r a l R es er ve o f f i c e t e r r i t o r y t h a t a r e a s s i g n e d c o u n t r y r o u t i n g s ymbo ls . These i n s t i t u t i o n s are lo c a te d o u tsid e th e designated c i t y area of th e c o l l e c t i n g Federal Res er ve o f f i c e and a r e a l s o o u t s i d e any RCPC z o n e . C r e d i t f o r c o u n t r y cas h l e t t e r s i s a v a i l a b l e one day a f t e r t i m e l y d e p o s i t a t t h e c o l l e c t i n g Fe de ra l Res er ve o f f f i c e . 1. RCPC zones a r e d e s i g n a t e d a r e a s w i t h i n t h e t e r r i t o r i e s of Fe de ra l Reserve o f f i c e s , but o u t s i d e F e d e r a l Re s er ve c i t i e s . In t h e s e zones t h e F e d e r a l Res er ve i s a b l e t o p r e s e n t chec ks f o r payment and c o l l e c t i o n on t h e same day t h e y a r e d e p o s i t e d a t t h e l o c a l F e d e r a l R e s er v e o f f i c e . 1 1-4 d. Package S o r t Each package s o r t c a s h l e t t e r c o n t a i n s ch ec k s drawn o nl y on a s i n g l e i n s t i t u t i o n l o c a t e d w i t h i n t h e c o l l e c t i n g F e d e r a l R e s er v e o f f i c e t e r r i t o r y and i s packaged f o r d e l i v e r y t o t h a t i n s t i t u t i o n . R e f l e c t i n g t h e s o r t i n g work done by t h e d e p o s i t i n g i n s t i t u t i o n , F e de ra l R e s er v e i n vo l ve me n t i s l i m i t e d t o p r e s e n t m e n t , s e t t l e m e n t , a d j u s t m e n t s and r e t u r n s . As a r e s u l t , t h e f e e f o r packa ge s o r t s i s l o w er t h a n t h e f e e s f o r a l l o t h e r c a t e g o r i e s o f c a s h l e t t e r s a t t h e c o l l e c t i n g F e d e r a l Re se rv e and l a t e r c u t - o f f ho u rs a r e a p p l i c a b l e t o package s o r t c a s h l e t t e r s . C r e d i t i s p as s ed by t h e l o c a l F e d e r a l R e s er v e o f f i c e a c c o r d i n g t o t h e same a v a i l a b i l i t y s c h e d u l e f o r t h e t y pe o f i t e m s c o n t a i n e d in t h e package s o r t cas h l e t t e r ( e . g . , c i t y , c o u n t r y , o r RCPC). e. Group S o r t Each g ro up s o r t c a s h l e t t e r c o n t a i n s che c ks o f a s p e c i f i c t y p e ( e . g . , c i t y , RCPC, o r c o u n t r y ) drawn on two o r more d e p o s i t o r y i n s t i t u t i o n s t h a t a r e d e s i g n a t e d by t h e c o l l e c t i n g Fe de ra l Res erv e o f f i c e . Because t h e d e p o s i t i n g i n s t i t u t i o n has a l r e a d y done some s o r t i n g , t h i s s e r v i c e r e q u i r e s l e s s h a n d l i n g by t h e F e d e r a l Res er ve t h a n some o t h e r d e p o s i t t y p e s and t h e f e e r e f l e c t s t h i s d i f f e r e n c e . L a t e r c u t - o f f hour s a r e a p p l i c a b l e t o group s o r t c a s h l e t t e r s and c r e d i t i s p a s s e d t o d e p o s i t i n g i n s t i t u t i o n s by t h e l o c a l F e d e r a l Re s er v e o f f i c e a c c o r d i n g t o t h e s c h e d u l e f o r t h e t y p e o f i t e m s in t h e c a s h l e t t e r - - c i t y , RCPC, and c o u n t r y i t e m s . 3. I n t e r t e r r i t o r y cas h l e t t e r s s e n t t o o t h e r F e d e r a l Re s er v e o f f i c e s . B ef o r e an a t t e m p t i s made t o u se i n t e r t e r r i t o r y ca s h l e t t e r d e p o s i t s e r v i c e s an i n s t i t u t i o n must o b t a i n p r i o r a u t h o r i z a t i o n from i t s l o c a l F e d e ra l R e s er v e o f f i c e t o a s s u r e a c c u r a t e and t i m e l y h a n d l i n g . A f t e r o b t a i n i n g p r i o r a u t h o r i z a t i o n , d e p o s i t i n g i n s t i t u t i o n s may send cas h l e t t e r s t o t h e a p p r o p r i a t e F e d e r a l R e s er v e o f f i c e o t h e r t h a n t h e l o c a l F e d e ra l Res er ve o f f i c e . The pu r po s e o f t h i s method of d e p o s i t i s t o improve a v a i l a b i l i t y , g e n e r a l l y . Such i n t e r t e r r i t o r y d e p o s i t s o f cas h l e t t e r s must be d e s t i n e d f o r t h e c o l l e c t i n g F e d e r a l Res er ve o f f i c e ; t h a t i s , t h e o f f i c e r e s p o n s i b l e f o r p r e s e n t i n g t h e i t ems i n t h e ca sh l e t t e r s t o t h e payor i n s t i t u t i o n s w i t h i n i t s t e r r i t o r y . D e p o s i t i n g i n s t i t u t i o n s s h o u l d c o n s u l t w i t h t h e i r l o c a l F e d er al Res er ve o f f i c e about t h e a v a i l a b i l i t y o f each ca s h l e t t e r s e r v i c e a t o t h e r F e d e r a l R e s er v e o f f i c e s . There a r e two ways i n which t r a n s p o r t a t i o n o f i n t e r t e r r i t o r y d e p o s i t s can be a r r a n g e d : c o n s o l i d a t e d s h ip m e n t s and d i r e c t s h i p m e n t s . D e s c r i p t i o n s o f t h e s e a r r a n g e m e n t s a r e o u t l i n e d on t h e f o l l o w i n g page: 1 1-5 a. C o n s o l i d a t e d Shipments C o n s o l i d a t e d s hi pme n t cas h l e t t e r s a r e d e l i v e r e d t o t h e l o c a l F e d e r a l R e s er v e o f f i c e f o r shipment t o t h e c o l l e c t i n g F e d e r a l Res er ve o f f i c e . S in ce t h e i t em s a r e not p r o c e s s e d by t h e l o c a l Fe de ra l Re s er v e o f f i c e , t h e t o t a l f e e f o r t h e s e i t em s i s t h e sum o f : ( a) a surcharge f o r co n so lid a te d shipments to recover th e c o s t of t r a n s p o r t i n g t h e s e c h e c ks between F e d e r a l Re s er v e o f f i c e s , and (b) t h e a p p r o p r i a t e it em f e e a t t h e c o l l e c t i n g Fe de ra l Res er ve o f f i c e . Cash l e t t e r s e l i g i b l e f o r c o n s o l i d a t e d s hipme nt a r e : c i t y , RCPC, c o u n t r y , n o n - m a c h i n e a b l e , package s o r t , and group s o r t . C r e d i t f o r t h e s e d e p o s i t s i s gi ve n by t h e l o c a l F e d e r a l Re s er v e o f f i c e a c c o r d i n g t o a v a i l a b i l i t y schedules f o r co n so lid a te d shipments. b. D i r e c t Shipments D i r e c t shipment ( " d i r e c t s e n d s " ) ca s h l e t t e r s a r e t h o s e f o r which t r a n s p o r t a t i o n t o t h e c o l l e c t i n g F e d e r a l Res er ve o f f i c e i s a r r a n g e d by t h e d e p o s i t i n g i n s t i t u t i o n . Fees f o r d i r e c t shipment c a s h l e t t e r d e p o s i t s a r e t h e same as f e e s t o be ch ar g ed t o l o c a l d e p o s i t o r y i n s t i t u t i o n s f o r th e r e s p e c t iv e c l a s s of items a t the c o l l e c t i n g F e d e r a l Res er ve o f f i c e . Cash l e t t e r s e l i g i b l e f o r d i r e c t shipment a r e : c i t y , RCPC, c o u n t r y , n o n - m a c h i n e a b l e , package s o r t , and group s o r t . C r e d i t f o r t h e s e d e p o s i t s i s gi ve n by t h e l o c a l F e d er al R es erv e o f f i c e based on a v a i l a b i l i t y s c h e d u l e s f o r d i r e c t s h i p m e n t s . 4. No n- machi neabl e c a s h l e t t e r d e p o s i t s . Non-machi neabl e ca s h l e t t e r s c o n t a i n chec ks which were r e j e c t e d from t h e r e a d e r - s o r t e r equipment of a d e p o s i t i n g f i n a n c i a l i n s t i t u t i o n , as wel l as t h o s e ch ec k s t h a t a r e m u t i l a t e d o r c a n n o t be compu ter p r oc c e s s e d . Fees f o r n o n- ma c hi ne a bl e checks r e f l e c t t h e a d d i t i o n a l manual h a n d l i n g r e q u i r e d t o p r o c e s s t h e s e e x c e p t i o n i t e m s . C r e d i t f o r nonm a c h i n e a b l e checks i s g e n e r a l l y d e f e r r e d one day beyond normal a v a i l a b i l i t y f o r t h e same t y p e check ( e . g . , c r e d i t f o r a c i t y n o n - ma c hi n ea b l e check would be a v a i l a b l e t h e day a f t e r t i m e l y d e p o s i t a t t h e c o l l e c t i n g F e d e r a l Re s er ve o f f i c e ) . B. Fee S c h e d u l e s Each f e e in t h e check s e r v i c e f e e s c h e d u l e c o v e r s r e c e i v i n g , s o r t i n g , r e c o n c i l i n g and d e l i v e r y . These f e e s do n ot i n c l u d e c h a r g e s f o r s p e c i a l i n t r a o f f i c e d e p o s i t a r r a n g e m e n t s t h a t i n d i v i d u a l Re se rv e Banks may e s t a b l i s h . The p e r i t e m f e e s i n c l u d e t h e c o s t s a s s o c i a t e d w i t h r e t u r n s and a d j u s t m e n t s . However, c o n s i d e r a t i o n i s b e i n g g i v e n t o t h e e s t a b l i s h m e n t of s e p a r a t e p r i c e s f o r r e t u r n i t e m s . No c h a r g e s w i l l be made f o r p o s t a l money o r d e r s o r U.S. T r e a s u r y c h e c ks d e p o s i t e d s e p a r a t e l y b ec a u s e such p r o c e s s i n g i s c o n d u c t e d by t h e F e d e r a l R es er ve as p a r t o f i t s f i s c a l agency r e s p o n s i b i l i t i e s . When such i t em s a r e not d e p o s i t e d s e p a r a t e l y , t h e y w i l l be a s s e s s e d t h e same f e e as commercial chec ks d e p o s i t e d i n mixed c a s h l e t t e r s . 1 1-6 The t e r m " c o l l e c t i n g F e d er al R e s er v e o f f i c e , " as used i n t h e f e e s c h e d u l e , r e f e r s t o t h e F e d er al Reserve o f f i c e r e s p o n s i b l e f o r p r e s e n t i n g c a s h l e t t e r s t o t h e i n s t i t u t i o n s w i t h i n i t s t e r r i t o r y . Thus, t h e l o c a l F ede ra l R es er ve o f f i c e would be t h e c o l l e c t i n g F e d er al Reserve o f f i c e i f t h e i n s t i t u t i o n on which t h e ch ec k s a r e drawn i s l o c a t e d w i t h i n t h e same F ede ra l R es er ve t e r r i t o r y as t h e d e p o s i t i n g i n s t i t u t i o n .
@FedFRASER