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R e s e r v e Ba n k DALLAS, TEXAS of Dallas 75222 C irc u la r No. 75-116 August 12, 1975 OFFSITE ELECTRONIC FACILITIES TO A L L STATE MEMBER BANKS IN THE ELEVENTH FEDERAL RESERVE D ISTRICT: The Board of Governors of the Federal Reserve System recently considered a request by a State member bank to establish offsite electronic facilities. Many such facilities have the capacity to accept deposits, make loans, or pay checks, and have become g e n e ra lly known as cash dispensers, automated te lle rs , and p o in t-o f-sale term inals. In view of the legal and policy issues raised by the establishment or use of offsite facilities that p rovide any or all of the above-described services, the Board has determ ined that, at this time, a State member bank d es irin g to establish or use an offsite electronic facility described above shall inform the Federal Reserve Bank in its d is tric t 30 days p rio r to the establish ment or utilization of such fa c ility . Where applicable State law or the app ro priate State bank su p ervis o ry authority has permitted or approved deployment of the proposed offsite fa c ility , and w h ere the Reserve Bank does not notify the applicant of its objection to the establishment or use of the facility w ithin the 30-day p eriod, the member bank may take action to establish or use such fa c ility . The information provided by a State member bank in connection with establishment or use of an offsite electronic facility described above should include (a) a description of the location of the proposed facility; (b) a description of the transactions that can be accomplished at the fa c il ity; and (c) the names of other institutions, if an y , sharing or intending to share the fa c ility . A State member bank seeking to establish or use an offsite fa c il ity that does not accept deposits, pay checks, or make loans, but for example, This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - m erely advances cash based on a preexisting agreement or line of c re d it, need not give p r io r notice of the deployment of such a device; how ever, Reserve Banks should be advised by State member banks as to the deploy ment of such d e v ic e s . Review of such notices supplied by member banks for establish ment or use of offsite electronic facilities may be undertaken by Reserve Banks pursuant to the authority set forth in Section 2 6 5 .2 (f) (1) of the Board's Rules Regarding Delegation of A u th o rity . Such reviews should take into account the c rite ria set forth in that section. T h e Board has d e termined that State member banks may make investments in offsite elec tronic facilities without regard to the investment limitations of Section 24A of the Federal Reserve Act. S incerely yours, T . W. Plant F irs t Vice President
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