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Federal reserve Bank
OF DALLAS
T O N Y J . SALVAGGIO
D A LLA S , TEXAS
75265-590 6
F IR S T V IC E P R E S ID E N T
February 21, 1994
Notice 94-19
TO:
The Chief Operating Officer of
each financial institution in the
Eleventh Federal Reserve District
SUBJECT
Operating Circular 17
(Electronic C heck Presentment Services)
DETAILS
The Federal Reserve Bank of Dallas is renaming and reissuing its
Bulletins as Operating Circulars in order to conform to the language used in
the Uniform Commercial Code. Accordingly, Bulletin 17 is being reissued as
Operating Circular 17 (Electronic Check Presentment Services).
In connection with this reissue, Operating Circular 17 has been
expanded to include Check Truncation, Extended MICR Capture, and Basic Elec
tronic Presentment services. Also, there are several revisions that do not
alter the meaning of the document.
ENCLOSURE
Enclosed is Operating Circular 17. Please file it in your Operating
Circulars (Bulletins) binder and discard the old version.
MORE INFORMATION
For more information, please contact Johnny Johnson, (214) 922-5427,
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 B a n k ’s notice or Operating Circular
17, please contact the Public Affairs Department at (214) 922-5254.
Sincerely,
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)
Operating Circular
F e d e r a l
R e s e r v e
B a n k
of
D a l l a s
Electronic Check
Presentment Services
Scope
Operating Circular 17 contains the terms and conditions under which this Bank provides
electronic check presentment services to financial institutions in the Eleventh Federal Reserve
District. Any institution using these services shall, by such action, agree to the terms and
conditions set forth herein.
F e d e ra l R e s e rv e B a n k of D allas
02-94
till u C iit u
f
7
ELECTRONIC CHECK PRESENTMENT SERVICES
Paragraphs
G eneral...............................................................................................
1-2
D efin itio n s...................................................................................................
3 -4
Basic Service.......................................................................................
5
Presentm ent.......................................................................................
6-8
Settlement...........................................................................................
9
Reserve Bank Warranties and Liability............................................ 10-16
Indemnification by Institution.........................................................
17
Fees......................................................................................................
18
T erm ination....................................................................................... 19-20
Miscellaneous..................................................................................... 21-22
Right to A m end..................................................................................
Appendix A: Check Truncation Service
Appendix B: Extended MICR Service
Appendix C: Basic Electronic Presentment Service
Appendix D: Off-Peak Basic Electronic Presentment Service
02-94
F e d e ra l R e s e rv e B a n k of D allas
23
tion that (1) contains in the MICR line
the symbol, routing number, or account
number designating the item as an
eligible item, (2) is in an amount less
than the cutoff amount, if any, agreed to
by this Bank and the institution, and
(3) otherwise complies with all other
eligibility requirements that we may
specify. A photocopy is an eligible item.
General
1. This Operating Circular and its appendixes
set forth the terms under which we provide
certain electronic check presentment services to a
paying bank. These services generally entail the
presentment of a check via electronic transmis
sion of data obtained from its MICR (magnetic
ink character recognition) line, with the check
itself being kept by us or delivered subsequent to
the electronic presentment. We may also, from
time to time, offer other electronic presentment
services by special agreement.
2. This Operating Circular constitutes a special
collection agreement, as authorized by Regula
tion J of the Board of Governors of the Federal
Reserve System, and a truncation agreement, as
authorized by Regulation CC of the Board of
Governors. Services provided hereunder are
performed in conjunction with the services
provided pursuant to our Operating Circular 8,
Collection o f Cash Items, and are also governed by
Regulation J, Regulation CC, and our Operating
Circular 16, Electronic Access.
D. “MICR-line information” means the
information inscribed in the MICR line
on an eligible item.
E.
“Over-the-counter item” means an
eligible item that has already been
presented to the institution, or to its
agent for receiving presentment, that is
delivered to us for processing in accor
dance with this Operating Circular.
Notwithstanding any other provision of
this Operating Circular, the electronic
transmission of MICR-line data ob
tained from an over-the-counter item
does not constitute presentment of the
item, and we are not a collecting bank
with respect to such item.
F.
“Receive” or “receipt” means when
MICR-line information, an eligible item,
a notice, an instruction, or a request
comes to the attention of the entity to
which it is directed or is tendered at the
place and in the manner designated for
receipt. MICR-line information that we
transmit but that is not actually received
because of the failure of the institution
or its agent to manage its electronic
connection in accordance with the terms
of this Operating Circular is deemed to
be received at the time of transmission.
DEFINITIONS
3. The definitions set forth in or adopted by
Regulation I apply in this Operating Circular,
except as otherwise provided. As between this
Bank and a paying bank receiving services
hereunder, references to this Operating Circular
include any appendix hereto describing a service
being provided to the paying bank. Many terms
used in this Operating Circular have specialized
meanings that have developed through law,
custom, or commercial usage. Unless otherwise
stated, references to “this Bank,” “we,” “us,” and
“our” are to the Federal Reserve Bank of Dallas
and its Branches at El Paso, Houston, and San
Antonio.
4. As used in this Operating Circular, unless
the context requires otherwise,
A. “Institution” means a paying bank that
subscribes to one or more of the services
provided pursuant to this Operating
Circular.
B. “Deliver” or “delivery” means to cause
information, a notice, an instruction, or
an eligible item to be received.
C. “Eligible item” means a cash item drawn
on, or payable at or through, the institu
02-94
G. “Record,” when referring to MICR-line
information on an eligible item, means
to reproduce the information in a form
suitable for electronic transmission.
H. “Transmit” or “transmission,” when
referring to MICR-line information we
have recorded, means sending such
information electronically to the institu
tion or its agent for receiving such
information or making such informa
tion available in a file that can be
accessed electronically by the institution
or its agent.
F e d e r a l R e s e r v e B a n k of D a l l a s
Operating
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17
B a s i c S e r v ic e
SETTLEMENT
5. As provided in this Operating Circular, we
record MICR-line information for each eligible
item, perform repair or key-entry services for an
eligible item rejected during processing, and
present each eligible item to the institution by
transmitting the MICR-line information that we
have recorded. We may also perform a variety of
related check services in accordance with one or
more of the appendixes to this Operating
Circular. The procedures with which this Bank
and the institution are to comply in providing or
receiving a particular service are set forth in the
applicable appendix and in procedures that we
may publish.
PRESENTMENT
6. We record MICR-line information obtained
from eligible items and transmit it to the institu
tion, together with our sequence number for
each item, the total dollar amount of the items
for which information is being transmitted, and
the date the information was recorded. MICRline information is transmitted, in accordance
with the time schedule that we specify, on each of
our banking days that we receive eligible items,
except that if the institution is closed on a day
that is a banking day for us, we transmit the
information on the next day that is a banking day
for both the institution and us. The institution
shall establish a cutoff hour no earlier than 2:00
p.m. (local time for the institution) for receipt of
MICR-line information. The institution shall
give us prom pt notice of its failure to receive
MICR-line information on a day that is a
banking day for both the institution and us.
7. For purposes of Regulation J, Regulation
CC, and our Operating Circular 17, the receipt
of MICR-line information obtained from an
eligible item, other than an over-the-counter
item, by the institution or its agent for such
purpose constitutes presentment of the item.
The institution waives any right it may have with
respect to exhibition or production of an eligible
item presented under this Operating Circular.
8. If we are unable for any reason to transmit
MICR-line information, we may elect to handle
any affected eligible items outside the terms of
this Operating Circular. If we elect to do so, we
will handle the eligible items as cash items
pursuant to our Operating Circular 8, and any
issue relating to the items will be governed by
that Operating Circular.
2
9. We debit the account of the institution or its
designated correspondent for the total dollar
amount of eligible items for which the MICRline information has been transmitted to the
institution that day, as provided in our Operat
ing Circular governing the collection of cash
items. The amount of the debit may include both
over-the-counter item amounts and the amounts
of items that we have presented to the institu
tion. If the institution is closed for a midweek or
nonstandard holiday and we are open, we debit
the institution in accordance with our standard
procedure for midweek closing and nonstandard
holidays. If we are unable to obtain payment for
an eligible item and we exercise our right of
charge-back under Section 210.13 of Regulation
J, we may remove the item from our retention
files and return it.
Reserve b a n k
a n d L ia b il it y
W a r r a n t ie s
10. With respect to MICR-line information
transmitted to the institution under this Operat
ing Circular, we warrant to the institution that,
except as provided in paragraphs 11 and 12, the
MICR-line information transmitted accurately
represents the information inscribed on the
MICR line of the eligible item.
11. If we repair or key-enter MICR-line infor
mation with respect to an eligible item because
we have difficulty in recording the information,
we warrant that such MICR-line information
accurately represents the amount and routing
number information as it appears on the item.
12. Notwithstanding any provision of Regula
tion CC or state law, we make no warranties with
respect to account number or check number
information that we transmit to the institution
under this Operating Circular. The institution is
encouraged to validate the accuracy of the
account number and check number information
it receives from us.
13. Our recording, transmitting, repairing, or
key-entering MICR-line information shall not
constitute a breach of any warranty imposed by
law with respect to alteration of an item. In
addition, we are not responsible for determining
whether an eligible item is properly payable
under applicable law, including but not limited
to determining (a) the genuineness of the
signature of any drawer appearing on an eligible
F e d e ra l R e s e rv e B a n k of D allas
02-94
item; (b) whether any or all required signatures
appear on an eligible item; (c) whether an eligible
item is stale; (d) whether an eligible item is
postdated; (e) whether an eligible item is prop
erly indorsed or bears genuine indorsement;
(f) whether a stop-payment order has been
issued for an eligible item; and (g) whether an
eligible item is a photocopy and, if so, whether it
has been prepared and submitted in proper
fashion.
14. With respect to any claim arising out of our
recording and transmission of MICR-line
information to the institution, our liability is
governed by Section 210.6 of Regulation J. With
respect to any other action that we take or service
that we perform pursuant to this Operating
Circular, we act as agent of the institution and
are not liable to the institution except for our
breach of the warranties expressly set forth
herein or for our own lack of good faith or
failure to exercise ordinary care.
15. Our liability for breach of any warranty set
forth in this Operating Circular or imposed
under applicable law, or for our lack of good
faith or failure to exercise ordinary care, is
limited to the actual amount of the eligible item
or the amount of the MICR-line information
transmitted by us with respect to the item,
whichever is greater, reduced by an amount that
could not have been realized by the use of
ordinary care. We do not have or assume any
liability to any person other than the institution.
16. The institution shall give us prom pt written
notice of any claim by or against the institution
that may give rise to a claim against us
hereunder.
arising in connection with any allegation that
we have acted as a collecting bank in handling
an over-the-counter item. The institution’s
indemnification obligation shall survive the
termination of services provided pursuant to this
Operating Circular.
Fees
18. Fees for our electronic presentment services
are set forth in a fee schedule that we publish and
amend from time to time. Such fees are charged
to an account on our books designated by the
institution.
T e r m in a t io n
19. We or the institution may terminate the
services provided under this Operating Circular
by giving not less than 30 days’ prior written
notice to the other party. In addition, we may,
upon notice to the institution, immediately
terminate provision of the services hereunder if
we, in our sole discretion, determine that the
financial condition of the institution poses a risk
to us if we continue to provide the services.
20. We may refuse to accept an item for elec
tronic presentment to the institution if we
believe that the institution has failed to comply
with the terms of this Operating Circular,
Regulation J, Regulation CC, or Operating
Circular 8. In addition, if at any time we, in our
sole discretion, determine that the amount of
one or more eligible items is excessive in relation
to the financial condition of the institution, we
may refuse to handle any such item under this
Operating Circular.
M is c e l l a n e o u s
INDEMNIFICATION BY INSTITUTION
17. The institution shall indemnify, hold
harmless, and defend this Bank from any claim,
demand, loss, liability, or expense, including
attorneys’ fees and expenses of litigation, made
against us by any person (including but not
limited to any other bank or any business entity,
clearinghouse, or governmental authority) or
incurred by us in connection with our perfor
mance of services hereunder as agent of the
institution, but excluding any claim, demand,
loss, liability, or expense that results from our
failure to exercise ordinary care or act in good
faith. The institution’s indemnification obliga
tion specifically extends to but is not limited to
claims, demands, loss, liability, or expense
02-94
21. If either party is delayed in acting beyond the
time limits provided in this Operating Circular
because of interruption of communication or
computer facilities, suspension of payments by a
bank, war, emergency conditions, failure of
equipment, or other circumstances beyond its
control, the time for acting is extended for the
time necessary to complete the action, if the
party exercises such diligence as the circum
stances require.
22. It is the responsibility of the institution to
ensure that it has obtained all necessary resolu
tions, signature cards, and authorizations from
customers whose items will be processed pursu
ant to this Operating Circular. The institution is
F e d e ra l R e s e rv e B a n k of D a lla s
Operating
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17
also responsible for obtaining all necessary
approvals from its board of directors and from
the appropriate governing or regulatory bodies
before receiving services hereunder.
R ig h t t o A m e n d
23. We reserve the right to withdraw or amend
this Operating Circular and any of its appendixes
at any time without notice.
4
F e d e ra l R e s e rv e B a n k of D allas
02-94
A P P E N D IX A
CHECK TRUNCATION SERVICE
General
A-1. This Appendix sets forth the terms of our Check Truncation Service. The agreement
under which this service is provided to an institution consists of our Operating Circular 17
(Electronic Check Presentment Services), including this Appendix, and the institution's request
for the service, submitted as provided in paragraph A-15.
SERVICE DESCRIPTION
A-2. We record MICR-line information from an eligible item and present the item by transm is
sion of the MICR-line information. In addition, for an institution subscribing to our Check
Truncation Service, we will
(a) provide this service for any eligible item in a fine sort package;
(b) return an eligible item;
(c) retain an eligible item for 90 days;
(d) retain a m icrofilm copy of the eligible item for seven years, unless a longer period of
time is required by state law;
(e) respond to a request for information with respect to an eligible item.
The terms under which these services are provided are set forth more specifically in this Appen
dix and in procedures that we may prescribe.
DEFINITIONS
A-3. In addition to the definitions set forth in Operating Circular 17, unless the context re
quires otherwise,
(a) "Instruction to return" means a notice of dishonor or nonpayment.
(b) "Request fo r inform ation" means a request that we (i) provide additional information
w ith respect to an eligible item, (ii) transm it a facsimile copy of an eligible item, or (iii)
make available an eligible item or a copy thereof.
(c) "Eligible item " means a cash item described in the request for service submitted as
provided in paragraph A-15.
M ic r o f il m in g
A-4. We make a m icrofilm copy of the front and back of each eligible item for which the Check
Truncation Service is provided.
RETURN OF ELIGIBLE ITEMS
A-5. If the institution wishes to return an eligible item that has been presented electronically, it
must deliver to us an instruction to return the item. The instruction must be delivered by a
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F e d e ra l R e s e rv e B a n k of D allas
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Operating
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APPENDIX A (continued )
method that we prescribe and must be received by us within the applicable time frames speci
fied in Regulations J and CC and the Uniform Commercial Code. The instruction must contain
the MICR-line information that we transmitted to the institution with respect to the item, the
date we recorded the information, our sequence number for the item, and the reason for return.
A-6. For purposes of Regulations J and CC, the Uniform Commercial Code, and our Operating
Circular 17, our receipt of an instruction to return an eligible item constitutes return of the item
by the institution. As a returning bank, we will then return the item and, in accordance with our
published availability schedules, make the appropriate credit to the account maintained or used
by the institution for such purpose.
A-7. A properly submitted instruction to return an item of $2,500 or more will also serve as a
request for us to give notice of nonpayment to the depositary bank under Section 229.33 of
Regulation CC. For a notice of nonpayment to be delivered to the depositary bank by 4:00 p.m.
(local tim e for the depositary bank), we must receive the instruction no later than 11:00 a.m.
that day.
A-8. We assume no responsibility for determining whether the institution has acted in a tim ely
fashion w ith respect to returning an item or providing notice of nonpayment to a depositary
bank.
RETENTION OF PAID ITEMS
A-9. An eligible item that has not been returned is retained by us for 90 calendar days from
the date on which we first transm it the MICR-line information ("retention period"). During the
retention period, we make the eligible item available to the institution as provided herein. The
eligible item is destroyed after expiration of the retention period.
A-10. We retain the m icrofilm copy of an eligible item for seven years from the date on which
we first transm it the MICR-line information ("storage period"), unless a longer period of time is
required by state law. During the storage period, we make the microfilm copy available to the
institution as provided herein. The m icrofilm copy is destroyed after expiration of the storage
period.
A -1 1. Upon termination of services under this Appendix, we, at our discretion,
(a) either retain all items and microfilm copies of items then being held for the institu
tion fo r the remainder of the retention period or storage period;
(b) or deliver all such items and copies to the institution.
REQUESTS FOR INFORMATION
A-12. During the retention period or storage period for an eligible item, the institution may
subm it a request for information with respect to the item. The request must contain the MICRline information that we recorded from the item, the date we recorded the information, and our
sequence num ber for the item. We w ill respond to the request by sending the item, or a fac
simile or m icrofilm copy thereof, to the institution no later than the end of our second banking
day after the day we receive the request. During the retention period, if we receive a request by
10:00 a.m. on a banking day for us, we w ill attempt to respond to the request by 2:00 p.m. that
day, but we make no representation or warranty that we will do so. A request for information
submitted before the eligible item has been finally paid does not constitute dishonor of the
item.
F e d e ra l R e s e rv e B ank of D allas
02-94
APPENDIX A
(continued)
A-13. We make available an eligible item, or a m icrofilm copy thereof, only as provided in the
preceding paragraph or in response to the order of a court of competent jurisdiction, a grand
ju ry subpoena, or other legal process. If we believe that we may be compelled to provide an
item or a copy to other than the institution, we shall prom ptly notify the institution. It shall be
the responsibility of the institution to determine whether the item or copy should be produced
and to assert any defense to such production. The institution is responsible for the cost of
producing any item or copy, as well as the cost of defending against such production.
WARRANTY
A-14. We warrant that an eligible item processed hereunder w ill be held by us in accordance
with this Appendix and will not be sent to the institution except as provided herein.
REQUESTS FOR SERVICE
A-15. Any institution wishing to receive our Check Truncation Service must subm it a written
request in a form that we prescribe.
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F e d e ra l R ese rve B a n k of D a lla s
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a p p e n d ix b
EXTENDED MICR SERVICE
G eneral
B-1. This Appendix sets forth the terms of our Extended MICR (E-MICR) Service, under which
an eligible item is shipped to an institution tw o days after electronic presentment is made. The
agreement under which this service is provided to an institution consists of our Operating
Circular 17 (Electronic Check Presentment Services), including this Appendix, and the institu
tion's request for the service, submitted as provided in paragraph B-16.
SERVICE DESCRIPTION
B-2. We record MICR-line information from an eligible item and present the item by transm is
sion of the MICR-line information. In addition, for an institution subscribing to our E-MICR
Service, we will
(a) provide this service for any eligible item in a fine sort package;
(b) return an eligible item;
(c) respond to a request for information with respect to an eligible item;
(d) ship the eligible item to the institution;
(e)
if requested by
the institution, retain a microfilm copy of the eligible item for seven
years, unless a longer period of tim e is required by state law.
The terms under which these services are provided are set forth more specifically in this Appen
dix and in procedures that we may prescribe.
D e f in it io n s
B-3. In addition to the definitions set forth in Operating Circular 17, unless the context requires
otherwise,
(a) "Instruction to return" means a notice of dishonor or nonpayment.
(b) "Request for inform ation" means a request that we (i) provide additional information
with respect to an eligible item, (ii) transm it a facsimile copy of an eligible item, or
(iii) make available an eligible item or a copy thereof.
(c)
"Eligible item "
means a cash item described in the request for service submitted as
provided in paragraph B-16.
MICROFILMING
B-4. If requested by the institution, we make a microfilm copy of the fro nt and back of each
eligible item for which the E-MICR Service is provided.
B-5. We retain the microfilm copy of an eligible item for seven years from the date on which
we first transm it the MICR-line information ("storage period"), unless a longer period of tim e is
required by state law. During the storage period, we make the m icrofilm copy available to the
institution as provided herein. The microfilm copy is destroyed after expiration of the storage
period.
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F e d e ra l R ese rve B a n k of D allas
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17
APPENDIX B (continued)
B-6. During the storage period fo r a m icrofilm copy of an eligible item, the institution may
subm it a request fo r information w ith respect to the copy. The request must contain the MICRline information that we recorded from the item, the date we recorded the information, and our
sequence number for the item. We w ill respond to the request by sending a m icrofilm copy of
the item to the institution no later than the end of our second banking day after the day we
receive the request.
B-7. We make available a microfilm copy of an eligible item only as provided in the preceding
paragraph or in response to the order of a court of competent jurisdiction, a grand jury sub
poena, or other legal process. If we believe that we may be compelled to provide a copy to
other than the institution, we shall prom ptly notify the institution. It shall be the responsibility
of the institution to determine whether the copy should be produced and to assert any defense
to such production. The institution is responsible for the cost of producing any copy, as well as
the cost of defending against such production.
B-8.
Upon termination of services under this Appendix, we, at our discretion,
(a) either retain all m icrofilm copies of items then being held for the institution for the
remainder of the storage period;
(b) or deliver all such copies to the institution.
RETURN OF ELIGIBLE ITEMS
B-9. If the institution wishes to return an eligible item that has been presented electronically
but has not yet been shipped to the institution, it must deliver to us an instruction to return the
item. The instruction must be delivered by a method that we prescribe and must be received by
us within the applicable tim e frames specified in Regulations J and CC and the Uniform Com
mercial Code. In no event, however, w ill an instruction be effective if it is received after 11:00
a.m. on the first banking day after the day the MICR-line information from the item is transm it
ted to the institution. The instruction must contain the MICR-line information that we transm it
ted to the institution with respect to the item, the date we recorded the information, our se
quence number for the item, and the reason fo r return.
B-10. For purposes of Regulations J and CC, the Uniform Commercial Code, and our Operating
Circular 17, our receipt of an instruction to return an eligible item constitutes return of the item
by the institution as long as we receive the instruction before the time specified in the preced
ing paragraph. As a returning bank, we w ill then return the item and, in accordance with our
published availability schedules, make the appropriate credit to the account maintained or used
by the institution for such purpose.
B-11. A properly submitted instruction to return an item of $2,500 or more w ill also serve as a
request for us to give notice of nonpayment to the depositary bank under Section 229.33 of
Regulation CC. For a notice of nonpayment to be delivered to the depositary bank by 4:00 p.m.
(local tim e for the depositary bank), we must receive the instruction no later than 11:00 a.m.
that day.
B-12. We assume no responsibility fo r determining whether the institution has acted in a
tim ely fashion w ith respect to returning an item or providing notice of nonpayment to a deposi
tary bank.
S h ip m e n t
of It e m s
B-13. An eligible item processed under this Appendix will be shipped to the institution on our
F e d e ra l R e s e rv e B a n k of D a lla s
02-9 4
APPENDIX B
(continued)
second banking day after the day on which we transm it to the institution the MICR-line inform a
tion with respect to the item.
Re q u e s t s
for in f o r m a t io n
B-14. An institution may request information with respect to an eligible item as long as we
receive the request no later than 10:00 a.m. on our first banking day after the day on which we
transm it to the institution the MICR-line information with respect to the item. If we receive a
request by 10:00 a.m. on a banking day for us, we will attempt to respond to the request that
day, but we make no representation or warranty that we w ill do so. A request for information
submitted before the eligible item has been finally paid does not constitute dishonor of the
item.
ITEM NOT AVAILABLE
B-15. The institution is advised that after 5:00 p.m. on our first banking day after the day we
transm it MICR-line information with respect to an eligible item, the item may be in transit
between our office and the institution, or may otherwise be unavailable, and the item and the
information it contains may not become available until the institution actually receives the item.
REQUESTS FOR SERVICE
B-16. Any institution wishing to receive our E-MICR Service must subm it a written request in a
form that we prescribe.
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F e d e ra l R ese rve B a n k o f D a lla s
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APPENDIX C
BASIC ELECTRONIC PRESENTMENT SERVICE
G eneral
C-1. This Appendix sets forth the terms of our Basic Electronic Presentment (BEP) Service,
under which an eligible item is shipped to an institution on the day electronic presentment is
made. The agreement under which this service is provided to an institution consists of our
Operating Circular 17 (Electronic Check Presentment Services), including this Appendix, and the
institution's request for the service, submitted as provided in paragraph C-6.
S ervice
d e s c r ip t io n
C-2. We record MICR-line information from an eligible item and present the item by transm is
sion of the MICR-line information. In addition, for an institution subscribing to our BEP Service,
we will
(a) provide this service for any eligible item in a fine sort package;
(b) ship the eligible item to the institution.
The terms under which these services are provided are set forth more specifically in this Appen
dix and in procedures that we may prescribe.
DEFINITIONS
C-3. In addition to the definitions set forth in Operating Circular 17, unless the context requires
otherwise, "eligible item " means a cash item described in the request for service submitted as
provided in paragraph C-6.
SHIPMENT OF ITEMS
C-4. An eligible item processed under this Appendix w ill be shipped to, or made available for
pickup by, the institution or its agent on the banking day we transm it the MICR-line information
w ith respect to the item to the institution, or its agent for receiving such information.
ITEM NOT AVAILABLE
C-5. The institution is advised that on the day we transm it MICR-line information with respect
to an eligible item, the item will, for some period of time, be in transit between our office and
the institution, or w ill otherwise be unavailable, and the item and the inform ation it contains
w ill not become available until the institution actually receives the item.
REQUESTS FOR SERVICE
C-6. Any institution wishing to receive our BEP Service must subm it a written request in a
form that we prescribe.
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a p p e n d ix d
OFF-PEAK BASIC ELECTRONIC PRESENTMENT SERVICE
General
D-1. This Appendix sets forth the terms of our Off-Peak Basic Electronic Presentment (BEP/OP)
Service, under which an eligible item is shipped to an institution on the day after electronic
presentment is made. The agreement under which this service is provided to an institution
consists of our Operating Circular 17 (Electronic Check Presentment Services), including this
Appendix, and the institution's request for the service, submitted as provided in paragraph
D-16.
SERVICE DESCRIPTION
D-2. We record MICR-line information from an eligible item and present the item by transm is
sion of the MICR-line information. In addition, for an institution subscribing to our BEP/OP
Service, we will
(a) provide this service for any eligible item in a fine sort package;
(b) return an eligible item;
(c) respond to a request for information with respect to an eligible item;
(d) ship the eligible item to the institution or make it available for pickup;
(e) if requested by the institution, retain a microfilm copy of the eligible item for seven
years, unless a longer period of time is required by state law.
The terms under which these services are provided are set forth more specifically in this Appen
dix and in procedures that we may prescribe.
DEFINITIONS
D-3.
In addition to the definitions set forth in Operating Circular 17, unless the context re
quires otherwise,
(a) "Instruction to return" means a notice of dishonor or nonpayment.
(b) "Request for inform ation" means a request that we (i) provide additional information
w ith respect to an eligible item, (ii) transm it a facsimile copy of an eligible item, or
(iii) make available an eligible item or a copy thereof.
(c) "Eligible item " means a cash item described in the request for service submitted as
provided in paragraph D-16.
MICROFILMING
D-4.
If requested by the institution, we make a m icrofilm copy of the fro nt and back of each
eligible item for which the BEP/OP Service is provided.
D-5.
Unless the m icrofilm copy is delivered to the institution pursuant to the institution's
instructions, we retain the m icrofilm copy of an eligible item for seven years from the date on
which we first transm it the MICR-line information ("storage period"), unless a longer period of
time is required by state law. During the storage period, we make the m icrofilm copy available
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APPENDIX D
(continued)
to the institution as provided herein. The microfilm copy is destroyed after expiration of the
storage period.
D-6. During the storage period for a m icrofilm copy of an eligible item, the institution may
subm it a request for information with respect to the copy. The request must contain the MICRline information that we recorded from the item, the date we recorded the information, and our
sequence number for the item. We will respond to the request by sending a microfilm copy of
the item to the institution no later than the end of our second banking day after the day we
receive the request.
D-7. We make available a microfilm copy of an eligible item only as provided in the preceding
paragraph or in response to the order of a court of competent jurisdiction, a grand jury sub
poena, or other legal process. If we believe that we may be compelled to provide a copy to
other than the institution, we shall prom ptly notify the institution. It shall be the responsibility
of the institution to determine whether the copy should be produced and to assert any defense
to such production. The institution is responsible for the cost of producing any copy, as well as
the cost of defending against such production.
D-8.
Upon termination of services under this Appendix, we, at our discretion,
(a) either retain all m icrofilm copies of items then being held fo r the institution for the
remainder of the storage period;
(b) or deliver all such copies to the institution.
Re t u r n
of e l ig ib l e it e m s
D-9. If the institution wishes to return an eligible item that has been presented electronically
but has not yet been shipped to the institution, it must deliver to us an instruction to return the
item. The instruction must be delivered by a method that we prescribe and must be received by
us w ithin the applicable time frames specified in Regulations J and CC and the Uniform Com
mercial Code. In no event, however, w ill an instruction be effective if it is received after 5:00
p.m. on the day the MICR-line information from the item is transmitted to the institution. The
instruction must contain the MICR-line information that we transmitted to the institution with
respect to the item, the date we recorded the information, our sequence number for the item,
and the reason for return.
D-10. For purposes of Regulations J and CC, the Uniform Commercial Code, and our Operating
Circular 17, our receipt of an instruction to return an eligible item constitutes return of the item
by the institution as long as we receive the instruction before the time specified in the preced
ing paragraph. As a returning bank, we will then return the item and, in accordance with our
published availability schedules, make the appropriate credit to the account maintained or used
by the institution for such purpose.
D-11. A properly submitted instruction to return an item of $2,500 or more will also serve as a
request for us to give notice of nonpayment to the depositary bank under Section 229.33 of
Regulation CC.
D-12. We assume no responsibility for determining whether the institution has acted in a
tim ely fashion with respect to returning an item or providing notice of nonpayment to a deposi
tary bank.
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APPENDIX D
S h ip m e n t
(continued)
of It e m s
D-13. An eligible item processed under this Appendix will be shipped to, or made available for
pickup by, the institution on our banking day after the day we transm it to the institution the
MICR-line information with respect to the item.
Re q u e s t s
for in f o r m a t io n
D-14. An institution may request information with respect to an eligible item as long as we
receive the request no later than 5:00 p.m. on the day we transm it to the institution the MICRline information with respect to the item. We w ill attempt to respond to the request that day,
but we make no representation or warranty that we w ill do so. A request fo r information sub
mitted before the eligible item has been finally paid does not constitute dishonor of the item.
ITEM NOT AVAILABLE
D-15. The institution is advised that after 5:00 p.m. on the day we transm it MICR-line inform a
tion with respect to an eligible item, the item may be in transit between our office and the
institution, or may otherwise be unavailable, and the item and the information it contains may
not become available until the institution actually receives the item.
REQUESTS FOR SERVICE
D-16. Any institution wishing to receive our BEP/OP Service must subm it a written request in a
form that we prescribe.
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