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FEDERAL RESERVE BANK OF DALLAS
DALLAS, TEXAS

February 6, 1961

T o All Banks in the
Eleventh Federal Reserve D istrict:

The Board o f Governors has reprinted Regulations G and J, as
amended, effective A u gu st 21, 1959 and A u gu st 10, 1960, respec­
tively, to con form w ith the style appearing in the Code o f Federal
Regulations. Regulation G (12 CFR 207) relates to the collection
o f noncash item s, and Regulation J (12 CFR 210) relates to the
collection o f cash items.
B y w ay o f explanation, the Federal R eserve System has been
assigned Parts 200 to 299 o f Title 12 in the Code o f Federal R egu­
lations and the regulations follow in numerical order. Part 207
has been assigned to Regulation G and P art 210 to Regulation J.
U nder each P art the sections bear the same numbers as sections
o f the Board’s lettered regulations except that a decimal system
is used so that section 1 o f Regulation G has now becom e 207.1,
section 2 has now becom e 207.2, etc.
M em ber banks are requested to substitute the enclosed re­
printed Regulations G and J in the ring binder containing the
regulations o f the Board o f Governors and bulletins o f this bank.
N onm em ber banks are requested to place the revised regulations
in the red ring binder w hich has been previously furnished,
containing em ergency bulletins o f the Federal Reserve Bank o f
Dallas.
It would be appreciated i f you will acknowledge receipt o f the
revised regulations by signing and returning the enclosed postal
card.
Y ours very truly,
W atrous H. Irons
President

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

BOARD OF GOVERNORS
of the
FEDERAL RESERVE SYSTEM

COLLECTION OF NONCASH ITEMS

T
REGULATION G
(1 2 CFR 207)

As amended, effective August 21, 1959

☆ .

111

P rin t o f N o v e m b e r 1 9 6 0

INQUIRIES REGARDING THIS REGULATION
Any inquiry relating to this regulation should be addressed to the
Federal Reserve Bank of the district in which the inquiry arises.

REGULATION G
(12 C F R 207)
As amended, effective August 21, 1959

COLLECTION OF NONCASH ITEMS*
AUTHORITY FOR REGULATION

This regulation is based upon and issued pursuant to the provisions of subsec­
tion (i) of section 11, the first paragraph of section 13, and the 14th and 15th
paragraphs of section 16, and other relevant provisions of the Federal Reserve Act.
SECTION 207.1—D E F IN IT IO N OF NONCASH ITEM S

As used in this part, the term “ noncash items” means any items of
the following classes when payable in any Federal Reserve D istrict:1
(a) Maturing notes, acceptances, bankers’ acceptances, certifi­
cates of deposit, bills of exchange, and drafts with or without
securities, bills of lading, or other documents attached;
(b) Drafts and orders on savings deposits with pass books
attached;
(c) Checks, drafts, and other cash items which have previously
been dishonored or on which special advice of payment or dis­
honor is required;2
(d) Maturing bonds and coupons (other than obligations of
the United States and its agencies which are redeemed by Federal
Reserve banks as fiscal agents);
(e) State and municipal warrants, including both orders to
pay addressed to officers of States and political subdivisions
thereof and any special or general obligations of States and
political subdivisions thereof;
(/) All other evidences of indebtedness and orders to pay,
except checks and bank drafts handled under the provisions of
Part 210 of this chapter 2 and checks and bank drafts drawn on
or payable by a nonmember bank which cannot be collected at
par in funds acceptable to the Federal Reserve bank of the dis­
trict in which such nonmember bank is located.3
* The text corresponds to the Code of Federal Regulations, Title 12, Chapter II, Part 207;
cited as 12 CFR 207.
1 For the purposes of this part, any dependency, insular possession or part of the United
States outside the States of the United States and the District of Columbia shall be deemed
to be in or o f such Federal Reserve Reserve district as the Board of Governors may designate.
2 Any check, draft, or other item which is normally handled as a cash item will not be han­
dled as a noncash item unless special conditions require that this be done, and the Federal
Reserve bank will decide whether such special conditions exist.
8 Checks and bank drafts drawn on or payable by a nonmember bank which cannot be col­
lected at par in funds acceptable to the Federal Reserve bank of the district in which such
nonmember bank is located, and which may not be received under the terms of Part 210 of
this chapter, likewise may not be received as noncash items under the terms of this part.
1

2

REGULATION G

S ecs . 207.2-207.3

SECTION 207.2— R E C E IPT OF ITE M S FOR COLLECTION

Each Federal Reserve bank may receive for collection noncash
items from member and nonmember clearing banks in its district,
from other Federal Reserve banks, and from all member and non­
member clearing banks in other Federal Reserve districts which are
authorized to route direct for the credit of their respective Federal
Reserve banks, subject to the terms and conditions of this part.
SECTION 207.3—T E R M S OF CO LLECTION

(a) Agreement of sending bank.— Each member and nonmember
clearing bank which sends noncash items to any Federal Reserve bank
for collection shall by such action be deemed: (1) to authorize the
Federal Reserve banks to handle such items subject to the terms and
conditions of this part; (2) to warrant its own authority to give
the Federal Reserve banks such authority; (3) to agree to indemnify
any Federal Reserve bank for any loss or expense sustained (includ­
ing but not limited to attorneys’ fees and expenses of litigation) re­
sulting from the failure of such sending bank to have such authority,
or resulting from such Federal Reserve bank’s guaranty of prior en­
dorsements, or resulting from any action taken by the Federal Reserve
bank within the scope of its authority for the purpose of collecting
such noncash items; and (4) to guarantee all prior endorsements on
such items whether or not a specific guaranty is incorporated in an
endorsement of the sending bank.
(b ) Federal Reserve bank as agent.— A Federal Reserve bank will
act only as agent of the bank from which it receives such noncash
items and will assume no liability except for its own negligence and
its guaranty of prior endorsements.
(c) Presentation of items by Federal Reserve bank.— A Federal
Reserve bank may present such noncash items with any accompanying
documents for payment direct to the person, firm, or corporation on
which they are drawn or by or through which they are payable or
collectible, or may present them for payment or forward them for col­
lection direct to the bank on which they are drawn, at which they are
payable, or through which they are payable or collectible; or, in its
discretion, may forward them to another agent with similar authority
to present them for payment or forward them for collection. The
bank upon which any such noncash item may be drawn, or at which
the same may be payable or through which the same may be payable
or collectible shall be deemed to be a proper agent for collection
within the meaning of this part.
(d ) Items payable in other districts.— Noncash items received by

S ec. 207.3

REGULATION G

3

a Federal Reserve bank payable in other districts will be forwarded for
collection to the Federal Reserve bank of the district in which such
items are payable; except that, when in the judgment of the Federal
Reserve bank the size or character of the items or other special cir­
cumstances justify such action, any such items, in the discretion of
the Federal Reserve bank, may be forwarded for collection direct to
the bank on which they are drawn, at which they are payable, or
through which they are payable or collectible, or may be forwarded
for collection to another agent with authority to present them for
payment direct to the person, firm, or corporation on which they are
drawn or by or through which they are payable or collectible or to
present them for payment direct to the bank on which they are drawn,
at which they are payable, or through which they are payable or
collectible.
(e) Forms of payment accepted by Federal Reserve bank.—A
Federal Reserve bank may, in its discretion and at its option, accept
from any bank in payment of or from any collecting agent in remit­
tance for such noncash items, cash, checks, bank drafts, transfers of
funds or bank credits, or other forms of payment or remittance, accept­
able to the collecting Federal Reserve bank. The Federal Reserve bank
shall not be liable for the failure of any bank or any agent to collect,
or to pay, or to remit for, such noncash items, nor for any loss result­
ing from the acceptance from any bank or any agent, in lieu of cash,
of any other form of payment or remittance authorized herein, nor for
the nonpayment of, or failure to realize upon, any bank draft or other
medium of payment or remittance which may be accepted from any
bank or any collecting agent.
(/) Collection of remittances for noncash items.— Bank drafts
and other forms of payment or remittance received by a Federal Re­
serve bank in payment of or in remittance for noncash items handled
under the terms of this part will be collected, at the option of the Fed­
eral Reserve bank, either under the terms and conditions of this part
or under the terms and conditions of Part 210 of this chapter.
(g) Suspension or closing of paying or remitting bank.— No
draft, authorization to charge, or other order, upon any reserve balance,
clearing account, deposit account, or other funds of a paying, remit­
ting, or collecting bank in the possession of a Federal Reserve bank,
issued for the purpose of settling items handled under the terms of
this part will be paid, acted upon, or honored after receipt by such
Federal Reserve bank of notice or suspension or closing of such pay­
ing, remitting, or collecting bank.

4

REGULATION G

S ecs . 207.3-207.4

(h)
Items sent direct to Federal Reserve bank in another dis­
trict.— With respect to any noncash item sent direct by a member or
nonmember clearing bank in one district to a Federal Reserve bank in
another district, the relationships and the rights and liabilities existing
between the member or nonmember clearing bank, the Federal Re­
serve bank of its district, and the Federal Reserve bank to which the
noncash item is sent will be the same, and the relevant provisions of
this part will apply, as though the member or nonmember clearing
bank had sent such noncash item to the Federal Reserve bank of
its district with its endorsement and guaranty of prior endorsements
and such Federal Reserve bank had sent the noncash item to the other
Federal Reserve bank with its endorsement and guaranty of prior
endorsements.
SECTION 207.4—O T H E R RULES

Each Federal Reserve bank may also promulgate rules not incon­
sistent with the terms of the law or of this part, governing the de­
tails of its noncash collection operations. Such rules may be set forth'
by each Federal Reserve bank in circulars to its member and non­
member clearing banks and shall be binding upon any member or
nonmember clearing bank which send any noncash item to such Fed­
eral Reserve bank for collection or to any other Federal Reserve bank
for the account of such Federal Reserve bank for collection.

REGULATION G

5

D ESIG N A TIO N OF F E D E R A L RESER VE D ISTR ICTS

Section 207.52 Designation of Federal Reserve District for the
Virgin Islands.— For purposes of this part, the Virgin Islands shall be
deemed to be in or of the Second Federal Reserve District.
Section 207.53 Designation of Federal Reserve District for Puerto
Rico.— For purposes of this part, Puerto Rico shall be deemed to
be in or of the Second Federal Reserve District.
Section 207.54 Designation of Federal Reserve District for
Guam.— For purposes of this part, Guam shall be deemed to be in or
of the Twelfth Federal Reserve District.

BOARD OF GOVERNORS
of the
FEDERAL RESERVE SYSTEM

CHECK CLEARING AND COLLECTION

T

REGULATION J
(1 2 CFR 210)

As amended, effective August 10, 1960

P r in t o f N o v ^ n tb n r 1 9 6 0

INQUIRIES REGARDING THIS REGULATION
Any inquiry relating to this regulation should be addressed to the
Federal Reserve Bank of the district in which the inquiry arises.

REGULATION J
(12 CFR 210)
As amended, effective August 10, 1960

CHECK CLEARING AND COLLECTION*
SECTIO N 210.1— STATU TO RY PROVISIONS

Section 16 of the Federal Reserve Act (38 Stat. 265; 12 U.S.C. 248o)
authorizes the Board of Governors of the Federal Reserve System to
require each Federal Reserve bank to exercise the functions of a clear­
ing house for its member banks, and section 13 of the Federal Reserve
Act, as amended by the Act approved June 21, 1917 (40 Stat. 235; 12
U.S.C. 342), authorizes each Federal Reserve bank to receive from any
nonmember bank or trust company, solely for the purposes of exchange
or of collection, deposits of current funds in lawful money, nationalbank notes, Federal Reserve notes, checks and drafts payable upon
presentation, or maturing notes and bills, provided such nonmember
bank or trust company maintains with its Federal Reserve bank a
balance sufficient to offset the items in transit held for its account by
the Federal Reserve bank.
SECTION 210.2—G E N E R A L RE Q U IREM EN TS

(a) In pursuance of the authority vested in it under these pro­
visions of law, the Board of Governors of the Federal Reserve System,
desiring to afford both to the public and to the various banks of the
country a direct, expeditious, and economical system of check collec­
tion and settlement of balances, has arranged to have each Federal
Reserve bank exercise the functions of a clearing house and collect
checks for such of its member banks as desire to avail themselves of its
privileges and for such nonmember State banks and trust companies
as may maintain with the Federal Reserve bank balances sufficient to
qualify them under the provisions of section 13 to send items to
Federal Reserve banks for purposes of exchange or of collection. Such
nonmember State banks and trust companies will hereinafter be
referred to as nonmember clearing banks.
(b) Each Federal Reserve bank shall exercise the functions of a
clearing house and collect checks under the general terms and condi­
tions set forth in this part, and each member bank and nonmember
clearing bank shall cooperate fully in the system of check clearance
and collection for which provision is made in this part.
* The text corresponds to the Code of Federal Regulations, Title 12, Chapter II, Part 210;
cited as 12 CFR 210.

1

2

REGULATION J

S e c s . 210.3-210.4

SECTION 210.3— CHECK S R E C E IV E D FOR COLLECTION

(a) Each Federal Reserve bank shall receive at par from member
and nonmember clearing banks in its district,1 from other Federal
Reserve banks, and from all member and nonmember clearing banks
in other Federal Reserve districts which are authorized to route direct
for the credit of their respective Federal Reserve banks, checks18
drawn on all member and nonmember clearing banks of its district,
and checks drawn on all other nonmember banks of its district which
are collectible at par in funds acceptable to it.
(b) Each Federal Reserve bank may receive at par from member
and nonmember clearing banks in its district, checks drawn on all
member and nonmember clearing banks in other Federal Reserve
districts, and checks drawn on all other nonmember banks in other
Federal Reserve districts which are collectible at par in funds accept­
able to the collecting Federal Reserve bank.
(c ) No Federal Reserve bank shall receive on deposit or for col­
lection any check drawn on any nonmember bank which cannot be
collected at par in funds acceptable to the Federal Reserve bank.
SECTION 210.4— 'T IM E SCHEDULE AN D A V A IL A B IL IT Y OF C R E D IT S

(a) Each Federal Reserve bank will publish a time schedule show­
ing the time at which any item sent to it will be counted as reserve
and become available for withdrawal or other use by the sending
bank. For all checks received, the sending bank will be given immedi­
ate credit, or deferred credit, in accordance with such time schedule,
and as provided below.
(b ) For all such checks as are received for immediate credit in
accordance with such time schedule, immediate credit, subject to final
payment, will be given upon the books of the Federal Reserve bank
at full face value in the reserve account or clearing account upon day
of receipt, and the proceeds will at once be counted as reserve and
become available for withdrawal or other use by the sending bank;
Provided, however, That the Federal Reserve bank may in its discre­
tion refuse at any time to permit the withdrawal or other use of credit
1 For the purposes of this part, any dependency, insular possession or part of the United
States outside the States of the United States and the District of Columbia shall be deemed to
be in or of such Federal Reserve district as the Board o f Governors may designate.
la A check is generally defined as a draft or order upon a bank or banking house, purport­
ing to be drawn upon a deposit of funds, for the payment at all events of a certain sum of
money to the order of a certain person therein named, or to him or his order, or to bearer,
and payable on demand.

S e c s . 210.4-210.5

REGULATION J

3

given for any item for which the Federal Rserve bank has not yet
received payment in actually and finally collected funds.
(c )
For all such checks as are received for deferred credit in accord­
ance with such time schedule, deferred credit, subject to final pay­
ment, will be entered upon the books of the Federal Reserve bank at
full face value, but the proceeds will not be counted as reserve nor
become available for withdrawal or other use by the sending bank
until such time as may be specified in such time schedule,2 at which
time credit will be transferred from the deferred account to the re­
serve account or clearing account subject to final payment and will
then be counted as reserve and become available for withdrawal or
other use by the sending bank; Provided, however, That the Federal
Reserve bank may in its discretion refuse at any time to permit the
withdrawal or other use of credit given for any item for which the
Federal Reserve bank has not yet received payment in actually and
finally collected funds.
SECTION 210.5— T E R M S OF COLLECTION

The Board of Governors of the Federal Reserve System hereby
authorizes the Federal Reserve banks to handle such checks subject
to the following terms and conditions; and each member and non­
member clearing bank which sends checks to any Federal Reserve
bank for deposit or collection shall by such action be deemed to
authorize the Federal Reserve banks to handle such checks subject
to the following terms and conditions; to warrant its own authority
to give the Federal Reserve banks such authority; to agree to indem­
nify any Federal Reserve bank for any loss or expense sustained
(including but not limited to attorneys’ fees and expenses of litiga­
tion) resulting from the failure of such sending bank to have such
authority, or resulting from such Federal Reserve bank’s guaranty
of prior endorsements, or resulting from any action taken by the
Federal Reserve bank within the scope of its authority for the purpose
of collecting such checks; and to guarantee all prior endorsements on
such checks whether or not a specific guaranty is incorporated in an
endorsement of the sending bank.
(a) A Federal Reserve bank will act only as agent of the bank from
which it receives such checks and will assume no liability except for
its own negligence and its guaranty of prior endorsements.
(b) A Federal Reserve bank may present such checks for payment
2 For rules for computation o f reserves and penalties for deficiencies in reserves, see §§ 204.2
and 204.3 of this chapter.

4

REGULATION J

S e c . 210.5

or send such checks for collection direct to the bank on which they
are drawn or at which they are payable, or in its discretion may
forward them to another agent with authority to present them for
payment or send them for collection direct to the bank on which
they are drawn or at which they are payable. A Federal Reserve bank,
or any agent to which such checks are forwarded by a Federal Reserve
bank, may present such checks pursuant to any special collection
agreement not inconsistent with the terms of this regulation or may
present them through a clearing house subject to the rules and prac­
tices thereof.
(c) A Federal Reserve bank may, in its discretion and at its option,
either directly or through or from an agent, accept in payment of or
in remittance for such checks, cash, bank drafts, transfers of funds or
bank credits, or other forms of payment or remittance, acceptable to
the collecting Federal Reserve bank. The Federal Reserve bank shall
not be liable for the failure of the drawee bank or any agent to pay
or remit for such checks, nor for any loss resulting from the accept­
ance from the drawee bank or any collecting agent, in lieu of cash,
of any other form of payment or remittance authorized herein, nor
for the nonpayment of, or failure to realize upon, any bank draft or
other medium of payment or remittance which may be accepted from
the drawee bank or any collecting agent.
(d) Any check which a Federal Reserve bank or an agent thereof
presents to the drawee bank for payment or sends to the drawee bank
for collection, and for which remittance or settlement is made by the
drawee bank on the day on which it receives3 such check, may be
returned for credit or refund at any time prior to midnight of the
drawee’s next business day following such day of receipt or prior to
the time provided by applicable clearing house rule or special collec­
tion agreement, whichever is earlier, except that this paragraph shall
not apply to checks presented over the counter.
(e) Checks received by a Federal Reserve bank which are pay­
able in its own district will ordinarily be forwarded or presented direct
to the banks on which they are drawn, and such banks will be required
to remit or pay therefor at par in such one or more of the forms of
payment or remittance authorized under paragraph (c) hereof as may
be acceptable to the Federal Reserve bank.
( j ) Checks received by a Federal Reserve bank payable in other
8 A check received by a drawee bank on a day other than its business day, or received on a
business da.y after its regular business hours or during afternoon or evening periods when it
has reopened (or remained open) for limited functions, shall be deemed to have been received
on its next succeeding business day.

S ec . 210.5

REGULATION J

5

districts will ordinarily be forwarded for collection to the Federal
Reserve bank of the district in which such checks are payable; Pro­
vided, however, That, where arrangements can be made satisfactory
to the collecting bank or agent and to the Federal Reserve bank of
the district in which such checks are payable, any such checks may
be forwarded for collection direct to the bank on which they are
drawn or at which they are payable, or may be forwarded for col­
lection to another agent with authority to present them for payment
direct to the bank on which they are drawn or at which they are
payable. All such checks shall be handled subject to all the terms
and conditions of this part.
(g) With respect to any check sent direct by a member or non­
member clearing bank in one district to a Federal Reserve bank in
another district, the relationships and the rights and liabilities existing
between the member or nonmember clearing bank, the Federal Reserve
bank of its district and the Federal Reserve bank to which the check
is sent will be the same, and the relevant provisions of this part will
apply, as though the member or nonmember clearing bank had sent
such check to the Federal Reserve bank of its district with its endorse­
ment and guaranty of prior endorsements and such Federal Reserve
bank had sent the check to the other Federal Reserve bank with its
endorsement and guaranty of prior endorsements.
(h) Bank drafts received by a Federal Reserve bank in payment
of or in remittance for checks handled under the terms of this part
shall likewise be handled for collection subject to all the terms and
conditions of this part.
(i) The amount of any check for which payment in actually and
finally collected funds is not received shall be charged back to the
forwarding bank, regardless of whether or not the check itself can
be returned. In such event, neither the owner or holder of any such
check, nor the bank which sent such check to the Federal Reserve
bank for collection shall have any right of recourse upon, interest
in, or right of payment from, any reserve balance, clearing account,
deposit account, or other funds of the drawee bank or of any bank
to which such checks have been sent for collection, in the possession
of the Federal Reserve bank. No draft, authorization to charge, or
other order, upon any reserve balance, clearing account, deposit
account, or other funds of a paying, remitting, or collecting bank in
the possession of a Federal Reserve bank, issued for the purpose of
settling items handled under the terms of this part will be paid, acted
upon, or honored after receipt by such Federal Reserve bank of notice
of suspension or closing of such paying, remitting or collecting bank.

6

REGULATION J

S ec . 210.6

SECTION 210.6— O TH ER RULES AN D REGU LATIO NS

Each Federal Reserve Bank may also promulgate rules not incon­
sistent with the terms of the law or of the regulations of this part,
governing the details of its operations in clearing and collecting checks
and other cash items. Such rules may, among other things, prescribe
the types of checks and other items that will be received as cash items
under this regulation, classify cash items, require separate sorts and
cash letters, and provide different closing times for the receipt of
different types or classes of cash items. Such rules shall be set forth
by the Federal Reserve Bank in its letters of instruction to its mem­
ber and nonmember clearing banks and shall be binding upon any
member or nonmember clearing bank which sends any check or other
cash item to such Federal Reserve Bank for collection or to any other
Federal Reserve Bank for the account of such Federal Reserve Bank
for collection.

REGULATION J

7

D ESIG N A TIO N OF F E D E R A L RESER VE D ISTR ICTS

Section 210.52 Designation of Federal Reserve District for the
Virgin Islands.— For purposes of this part, the Virgin Islands shall be
deemed to be in or of the Second Federal Reserve District.
Section 210.53 Designation of Federal Reserve District for Puerto
Rico.— For purposes of this part, Puerto Rico shall be deemed to be
in or of the Second Federal Reserve District.
Section 210.54 Designation of Federal Reserve District for Guam.
— For purposes of this part, Guam shall be deemed to be in or of the
Twelfth Federal Reserve District.