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Federal R eserve Bank
OF DALLAS
HELEN E. H OLC OM B
FI RST VICE P RE S I D E NT AND
CHIEF O PE RAT I NG O FF I C E R

DALLAS, TE XAS

AuPUSt30 1996
UgUSl JU ,

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75265-5906

Notice 96-88
TO:

The Chief Operating Officer of
each financial institution in the
Eleventh Federal Reserve District
SUBJECT
Large Dollar Check Policy
DETAILS

Federal Reserve Banks are committed to reducing risk in the nation’s
payments system through a variety of means. This notice serves as an announcement of
one such step, intended to address the risks involved with handling as cash items checks
written for very large dollar values. Effective October 1, 1996, Federal Reserve Banks
will not handle as cash items checks valued at $100 million or more.
In this regard, Reserve Banks will adhere to subparagraph 7 (d) of our Check
Collection Operating Circular 8, “Collection of Cash Items.” The Circular states that
Reserve Banks do not handle as cash items checks that have “not been preprinted or
post-encoded in accordance with the American National Standard Specifications for
Placement and Location of MICR Printing, X9.13 (September 1983).” Checks with a
value of $100 million or above cannot be encoded and must be processed manually.
We are revising our Operating Circular to state that Reserve Banks will not
accept as cash items checks of $100 million or more, or items of lesser value that, in our
view, are intended to avoid the restriction on handling items of this size. Reserve Banks
will send such items back to the depositing institution with a debit to its account.
We believe that transfers of very large value should not be subject to the
delays and uncertainties of the paper check collection system. We strongly encourage
depository institutions and their customers to use secure electronic payment mechanisms
with immediate or same-day finality for large-value transactions.

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

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

This initiative is one of many measures that Federal Reserve Banks intend to
pursue to reduce risk in the payments system. In working toward this important goal, we
are appreciative of the ongoing cooperation and participation of the financial industry.
MORE INFORMATION
For more information, please contact Terry Campbell, (214) 922-6603, at the
Dallas Office; Eloise Guinn, (915) 521-8201, at the El Paso Office; Luke Richards, (713)
652-1544, at the Houston Office; or Herb Barbee, (210) 978-1402, at the San Antonio
Office.
For additional copies of this Bank’s notice, please contact the Public Affairs
Department at (214) 922-5254.
Sincerely,

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