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F ed e r a l Re s e r v e Ba n k o f D allas DALLAS, TEXAS 75222 Circular No. 77-37 March 10, 1977 RE V IS IO N OF B U L L E T IN S 8, 9 , A N D 11 T O A L L BANKS IN T H E E LE V E N TH FE D E R A L RESERVE D IS T R IC T : E ffe c tive A p r i l 1, 1977, a ll F e d e ra l R e s e rv e offices w ill p u t in place u n ifo rm p ro c e d u re s d e s ig n e d to e x p e d ite the collection of photocopies of lost or d e s tro y e d cash item s. T h e s e p ro c e d u re s w e r e d e ve lo p e d b y th e J o in t In d u s tr y E x c e p tion Item T a s k F o r c e , con sis tin g of r e p r e s e n ta tiv e s of the A m e ric a n B a n k e rs Association ( A B A ) , B ank A d m in is tra tio n In s titu te ( B A I ) , and the Fe d era l R e s e r v e . T h e new p ro c e d u re s a r e d e s c rib e d as follows: O b ta in in g and Processing Photocopies 1. A F e d era l R e s e rv e office w i ll : a. A d ju s t w ith the p a y in g fin a n c ia l in s titu tio n fo r an item re p o rte d " lis te d not enclosed" p r o v id e d that the p a y in g fin a n c ia l in s titu tio n re p o rts the item w as m issing d u r in g f i r s t pass (in proof) process ing and in itia te s the m issing item p r o c e d u re w ith in 5 b usiness days a fte r the date of the cash le tte r lis tin g the m issing item . Note: Items d is c o v e re d m issing d u r i n g th e second and sub sequen t pass pro c es s in g at p a y in g fin a n c ia l institutions or th e ir p ro c es s in g c en ters should be re p ro d u c e d from m icro film made p r i o r to o r d u r in g i n - p r o o f p ro c es s in g or a photocopy should be re q ues te d w ith o u t e n t r y . b. C h a r g e ba ck to the sendin g fin a n c ia l in s titu tio n the v a lu e of a ll m issing items a d ju s te d w ith a p a y in g fin a n c ia l in s titu tio n , items d is c o v e re d m issing d u r in g Fe d era l R e s e rv e f i r s t pass p ro c e s s in g , and items know n to be lost o r d e s tro y e d w h ile being tr a n s p o r te d . c. Request photocopies of checks re p o rte d m issing o r m u tilated d u r in g s ubse que nt pass p ro cessin g at the F e d e ra l R e s e r v e . A c h a rg e back to the sending fin a n c ia l in s titu tio n w i l l be made if th e photocopy is not p r o v id e d w ith in 15 c a le n d a r days from the date a Federal R e s e rv e office makes such a re ques t of the s ending b a n k . Banks and others are encouraged to use the follo w in g to ll-fr e e incoming WATS numbers in contacting this Bank: 1-8 0 0 -49 2 -4 40 3 (in tra s ta te ) and 1 -8 0 0 -5 2 7 -4 9 7 0 (in te rs ta te ). For c a lls placed loc a lly , p lease use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 d. A t the en d of 15 c a le n d a r d a y s , the F e d e ra l R e s e rv e w ill a uto m a tica lly c h a rg e an item ba ck to the sen ding in s titu tio n if the s endin g fin a n c ia l in s titu tio n does not p r o v id e a photocopy of the item (b e a r in g a c u r r e n t b a n k endorsem ent) re ques te d u n d e r p a r a g r a p h 1 . c . , an in d e m n ity a g ree m en t as c u r r e n t ly r e q u i r e d , and a copy o f th e F e d e ra l R e s e rv e 's re q u es t fo r photocopy. A f t e r c h arg e b a c k , the p ro v is io n s of p a r a g r a p h 2 , b e lo w , shall a p p ly . 2. T h e F e d e ra l R e s e rv e w ill h a n d le photocopies as cash item adjustm ents i f , w ith in 30 c a le n d a r days from the date of c h a r g e , the sen d in g fin a n c ia l in s titu tio n p r o v id e s a photocopy of an item (b e a r in g a c u r r e n t b a n k e n d o rs em e n t) c h a rg e d b a c k , an in d e m n ity a g ree m en t as c u r r e n t ly r e q u i r e d , a n d a copy of the F e d e ra l R e s e rv e c h a rg e b a c k n o tic e . If the photocopy and r e q u ir e d docum entation a r e not s u p p lie d w it h in the 3 0 - c a le n d a r - d a y p e r io d , the s ending b a n k must deal d i r e c t l y w ith the p a y in g b a n k o r f o r w a r d th e photocopy th ro u g h the F e d era l R e s e rv e on a w ith o u t e n t r y a d ju s tm e n t b a s is . 3. T h e F e d e ra l R e s e rv e w i l l continue to accept photocopies in cash item c h a n n e ls , th e r e b y p r o v id in g an e ffic ie n t system for th e collection of large n u m b e rs of items in cases w h e r e an e n tir e check shipm ent is lost or d estro yed . H. T h e a d ju s tm e n t de partm en ts in F e d era l R e s e rv e offices w i ll h a n d le the photocopies (e x c e p t those photocopies p re s e n te d for p aym ent u n d e r p a r a g r a p h 3 above) and the p a y in g fin a n c ia l in s titu tio n s w ill accept an imme d ia te c h a rg e fo r the photocopies p re s e n te d for p a ym e n t. R e tu r n of Photocopy b y P ay o r In s titu tio n 5. Im m ediate c r e d it w ill be g r a n te d to the p a y in g fin a n c ia l in s titu tio n b y the F e d era l R e s e rv e upon the r e t u r n of a photocopy h a n d le d u n d e r this p r o c e d u r e , p r o v id e d : a. T h e photocopy is r e tu r n e d th ro u g h r e t u r n item chan n els w ith in the m id n ig h t d e a d lin e for any of the same reasons that the o r ig in a l m ight be r e t u r n e d . b. T h e d r a w e r of the o r ig in a l item refuses to p e r m it p aym ent of the photocopy o £ t h e p a y in g fin a n c ia l in s titu tio n is u n a b le to contact the d r a w e r and r e tu r n is made w ith in 30 c a le n d a r days a fte r th e date of c h a r g e . Photocopies r e tu r n e d u n d e r this p ro v is io n must be made th ro u g h check a d ju stm e n t chann els and must be accom panied b y a signed statem ent that th e d r a w e r has re fus ed paym ent of the photo copy or^that the fin a n c ia l in s titu tio n has been u n a b le to contact the d ra w e r. - 3 c. T h e o r ig in a l item has been p a i d . T h e p a y in g fin a n c ia l in s titu tio n may r e t u r n a pho to co p y , the o r ig in a l of w h ic h has been paid w ith in 30 c a le n d a r days a fte r the date of c h a r g e . A photocopy r e tu r n e d in th is m a n n er must be made th ro u g h check a d ju stm e n t chann els and must be accom panied b y a photocopy (fro n t and b a c k ) of the paid o r ig in a l item and complete source of re c e ip t d ocum entation. d. A n y photocopies r e tu r n e d b y the p a y in g fin a n c ia l in s titu tio n a fte r 30 c a le n d a r d a y s , b u t w ith in 9 months a fte r the date of c h a r g e , w ill be h a n d le d by the F e d e ra l R e s e rv e on a w ith o u t e n t r y b a s is . S u p p o rtin g docum entation r e f e r r e d to in p a r a g r a p h 5 . c . , a b o ve , w ill be r e q u i r e d . G eneral 6. Photocopies of cash items w i ll no lo n g e r be h a n d led as noncash item s. H o w e v e r , photocopies of c e rta in noncash items w i l l continue to be h a n d le d as noncash item s, in a ccord ance w ith B u lle tin 9 , e n title d "C o lle ctio n of Noncash Ite m s ." Copies of r e v is e d pages of B u lle tin s 8, 9 , and 11 a r e e n clo s e d . T h e y should be in s e rte d in the p r o p e r b u lle tin s and the c o rre s p o n d in g pages should be removed and d e s tr o y e d . I f you have a ny questions o r comments w ith re s p e c t to the r e v is io n s of these b u l l e t i n s , please contact J . A . C l y m e r , A s s is ta n t V ic e P r e s id e n t, at E x t. 6337, o r the a p p r o p r ia t e o ffic e r at o u r El Paso, Houston, or San A ntonio B ra n c h . A d d itio n a l copies of these re v is io n s w i l l be fu r n is h e d upon re q u e s t to the S e c r e ta r y 's O ffice of this B a n k , E x t. 6267. S in c e r e ly y o u r s , R o b e rt H . B o y k in F ir s t V ic e P r e s id e n t E nclosures FEDERAL RESERVE BANK OF DALLAS BULLETIN 8 TABLE OF CONTENTS S e c tio n 1, GENERAL 1.00 C o llection contract 1.05 A uthority S e c tio n 2, DEFIN ITIO N S A N D REFERENCES 2.00 Definitions, referen ce to R egulation J 2.05 R eferen ce to B ulletin 1 S ectio n 3, C A S H ITEMS 3.00 Item s w h ic h w ill be h andled as cash item s 3.05 Item s not r e c e iv e d from sender 3.10 Item s w h ic h w ill n o t be han d led as cash item s 3.15 H andling of n o n con fo rm in g item s 3.20 D iscretion to return or handle as n o n c a s h item s 3.25 Item s r e c e iv e d from, p ay a b le by sam e bank S e c tio n 4, TERM S A N D C O N D IT IO N S OF COLLECTION 4.00 R egulation J 4.05 B ulletins 4.10 Item s payable o utside this District 4.15 Indirect routing discouraged S e c tio n 5, C A S H LETTERS 5.00 Preparation o f ca sh letters by sen d ers 5.05 Separate sorts, ca sh letters 5.10 E n d o rsem en ts 5.15 Item s r e c e iv e d w ith o u t e n d o rsem en t S e c tio n 6, H A N D L IN G BY T H IS BA N K 6.00 P resen tm en t for p a ym en t 6.05 N o ag reem ent to p resen t early 6.10 U niform in stru ctio n s regarding p ro test and a d v ice o f n on p a y m en t 6.15 Item s w ith U .S. Treasury and sim ilar e n d orsem en ts 6.20 D ifferent in stru ctio n s require n o n c a sh handling 6.25 Protest, w ir e a d v ic e by other b anks 6.30 C om m u n ication s b y w ire; c o s ts and charges S e c tio n 7, AVAILABILITY OF CREDIT 7.00 T im e s c h e d u le s and availab ility o f credit 7.05 A va ila b ility n ot actual p a y m e n t 7.10 Im m ediate credit 7.15 D eferred credit 7.20 M ix e d ca sh letters 7.25 Late claim s for error adjustm ents S e c tio n 8, COLLECTING A N D PA Y IN G BA N K S S e c tio n 9, RETU R N ITEM S 9.00 Inform ation to senders regarding return item s 9.05 U n tim e ly return o f unpaid item s 9.10 R eturns w ith o u t entry S e c tio n 10, DIRECT SEN D IN G 10.00 D irect sen d in g o f ca sh ite m s to other F ederal R eserv e Banks 10.05 Right to re fu se interdistrict item s a uthorized for direct sen d in g 10.10 D irect sen d in g of ca sh ite m s to other offices of this Bank 10.15 Right to re fu se intradistrict ite m s a uth orized for direct sending 10.20 R eim b u rsem en t o f transportation co sts for m em b er banks 10.25 C laim s fo r reim b ursem ent 10.30 M e th o d s o f ship m ent S e c tio n 11, HIGH-SPEED PR O CESSING 11.00 Standardization, sorting, routing, and m e c h a n iz e d p r o c e ssin g 11.05 Right to e n co d e, a ssu m p tion of risk b y sen der 11.10 D e sig n a tio n o f p ay in g bank or n o n bank payor 11.15 N o n -m a c h in a b le item s S e c tio n 12, M ISSIN G OR DESTROYED C A SH ITEMS: PHO TO G R A PH IC COPIES 12.00 Credit for m issin g or d estroy ed cash item s 12.05 H andling o f photographic copies 12.10 R eference to B ulletin 11 12.15 Federal R eserve Bank responsibility 12.20 Photographic c o p y legend 12.25 Photographic cop ies han d led w ith ou t entry S u p p lem en t A , G O V ER N M EN T CHECKS A -1.00 T erm s o f handling A -2.00 Im m ediate credit A -3.00 R eturns A -4.00 Claim s and a ctions S u p p lem en t B, PO STA L M O N EY ORDERS B-1.00 T erm s o f handling B-2.00 Im m ed iate credit B-3.00 Claims, returns S u p p lem en t C, FO O D C O U PO N S C-1.00 General C-2.00 Term s and con ditio n s C-3.00 N o n m em b er banks S u p p lem en t D , FOOD CERTIFICATES D-1.00 General FEDERAL RESERVE BANK OF DALLAS ite m s p a y ab le in any other Federal R ese r v e d is trict to ju stify direct s e n d in g and this Bank a u thorizes su c h sen d e r to se n d su ch item s direct to the F ederal R ese r v e Bank o f su ch other F ederal R e se r v e district, w e r e serv e the right to d eclin e to a c cep t any su c h ite m s from su ch sender. 1 0.10 D irect sen d in g o f ca sh ite m s to other offices o f th is B ank M em b er banks and other sen d ers m aintaining or u sin g a c c o u n ts w ith o n e office o f this Bank w h ic h h a v e a su b stan tia l v o lu m e or dollar a m o u n t o f c a sh ite m s p a ya b le in the territory o f a n y other office o f this Bank w h ic h th ey w i s h to c o lle c t through this Bank are required to apply to u s for authority to se n d su ch ite m s direct to su c h other office; p rovided, h o w e v e r , that w e m ay, in our discretion, w ith d r a w su ch authority at a n y tim e. A ppropriate in stru ctio n s w ill be transm itted to the m em b er banks and other se n d e r s w h ic h are a uthorized to se n d direct. 10.15 R ight to r e fu se intradistrict ite m s a u th o rized for direct sen d in g In the e v e n t that a n y sen d e r m aintaining or usin g an a c cou n t w it h one office o f this Bank has, in our judgm ent, a sufficient v o lu m e or dollar a m o unt o f ca sh ite m s p ay a b le in the territory o f another office o f this Bank to ju stify direct s e n d in g and this Bank authorizes su ch sen d er to se n d su ch ite m s direct to su ch other office of this Bank, w e reserv e the right to d ecline to accept a n y su ch ite m s from su ch sender. 10.20 R eim b u rsem en t o f transportation c o sts for m em b er b an k s E ach m em ber b a n k w h ic h se n d s ca sh item s di rect to other Federal R eserve Banks w ill be reim bursed b y u s at First C lass A irm ail or c o m m o n carrier rates, w h ic h e v e r is u su a lly low er, but n o t for insurance, on all su ch ite m s sent direct u n der our authority. R eim b u rsem en t also is a llo w a b le under sim ilar co n d itio n s for cash item s se n t direct to other offices o f this Bank. In the in terest o f e x p e d itio u s and eco n o m ica l handling, th o se direct-sen d in g m em b er banks that by arrangem ent deliv er cash item s p ayab le in other Federal R eserve territories to this Bank for c o n s o lid a te d sh ip m en t sh o u ld n ot d eviate from the arrangem ent e x c e p t u pon prior ap p roval o f this Bank. T ransportation co sts o f such c o n so lid a te d ship m en ts w ill be paid b y us. A d irect-sending m em ber bank that ha s m ade an arrangem ent w it h this Bank for c o n so lid a te d BULLETIN 8 ship m en t from an office of th is Bank lo c a te d in the sa m e c ity as the m em b er bank w ill not norm ally be reim bursed b y u s w h e n cash item s are se n t direct o u tsid e of the co n so lid a te d sh ip m ent, e x c e p t on Saturdays, S u n d a ys, and h o li d ays. 10.25 C laim s fo r reim bu rsem ent C laim s for reim bursem ent o f transportation c o s ts o f direct se n d in gs sh o u ld be filed w it h us by the te n th d a y o f the m o n th fo llo w in g the m on th in w h ic h su c h c o sts w e r e incurred, u sin g Form TR-115, a su p p ly of w h ic h w ill be fur n ish e d u p on request. 10.30 M eth od s o f sh ip m en t Each d irect-sen ding m em ber b ank sh o u ld give c o n sta n t attention to m e th o d s o f sh ip m en t and sh o u ld chan ge the m e th o d in any case in w h ic h sh ip m en t can be m a d e by another m e th o d at a lo w e r co st and w ith o u t lo s s of tim e in p r e se n t m ent. In c a s e s in w h ic h w e p ay the transporta tion c o sts, w e reserve the right to require a change in m e th o d o f shipm ent in an y situation w h ere, b y the u s e o f another m eth o d , a m ore efficient h an d lin g by the r e c eiv in g Federal R e serv e office w ill result, or p r esen tm en t can c o n siste n tly be m ade m ore prom ptly, or at a lo w e r co st and w ith o u t lo s s o f time. Section 11, HIGH-SPEED PROCESSING 1 1 .0 0 S t a n d a r d iz a t io n , s o r t in g , r o u t in g , a n d m ec h a n iz e d p ro cessin g To fa cilitate the sorting, routing, and m e c h a n iz e d p r o c e ssin g o f cash item s, and th ereby p ro m ote earlier p r esen tm en t and earlier return of u npaid item s, it is urged that: (1) In confo rm ity w ith the A B A M agnetic Ink Character R e cog n itio n Program, the routing s y m b o l and the suffix o f the transit num ber be e n c o d e d o n all ca sh item s in m agn etic in k in E-13B ty p e in the m anner prescribed, and at the location a ssigned, by the A B A . (2) T he appropriate transit n um ber-routing s y m bol in fractional form be clearly im printed in the upper right corner o f all cash item s paya b le b y or through all par rem itting banks, preferably in G othic type, the fa c e o f w h ic h m ea su res at lea st 8 p o in ts v e r tic a lly or l / 9 o f an in c h from the top to the b o tto m o f the in d ivid u al char acters. FEDERAL RESERVE BANK OF DALLAS (3) C ash ite m s be o th e r w ise co n fo rm ed to the stan dards p rescribed by the A B A , in clu d in g a m inim um w id th o f 2 3/4 in ch es, a m ax im u m w id th o f 32/s in ch es, a m in im um len gth o f 6 in ch es, and a m a x im u m len gth o f 83/4 in ch es, and be re stricted to a single th ic k n e s s o f card or paper. (4] T he attention o f sen d ers is called to our operating letter entitled “Instructions to C ollect ing Banks and Paying B a n k s” to the effect that: Cash item s returned by co llectin g b anks and pay in g banks sh o u ld not bear on the back the endorsem ent, paid or other id e n tify in g stam p of the pay in g bank u n le ss that stam p has b e e n c a n celled. This Bank or another R eserve Bank w h ic h h a s h an d le d an item , shall not assum e any re sp o n sib ility to the sender, to any other o w n e r or h o ld er o f the item , or to any other person, for any dela y resulting from a ction taken by a R e serve Bank in returing an item on the basis of the u n c a n c e lle d end orsem ent, paid or other id e n tify in g stam p o f the payin g bank on the back o f the item . 11.05 R ight to en c o d e , a ssu m p tio n o f risk b y sen d er If, in our judgem ent, the p r o c e ssin g o f any cash ite m b y u s requires the in scription thereon in m ag n etic ink, or o th erw ise, o f the A B A transit num ber, the routing sym bol, or both, o f the p a y ing b ank (or n o n b a n k payor) or requires the in scrip tio n thereo n in m agn etic ink of the am ou n t of su c h item , w e m a y so inscrib e the ite m and present, send, or forw ard it accord ingly; and the sen d er o f su ch item shall be d e e m e d to a ssu m e the risk of lo s s resulting from d elay ca u sed b y the act o f inscribing such am ou n t or su ch num ber, sy m b o l, or both. 11.10 D esig n a tio n o f p a y in g bank or nonbank payor T his B ank m a y present, send, or forw a rd any c a s h item , in accordance w ith the p r o v isio n s of S e c tio n 210.6 o f R egulation J, on the b a sis of: (1) A n y A B A transit num ber or routing sy m b ol appearing thereon at the tim e o f its receipt by us, w h e th e r in scrib ed by m agnetic in k or by other m eans, and w h e th e r or n o t su ch transit num ber or routing sy m b ol is c o n siste n t w ith e ach other form o f design ation o f the paying b a n k (or n o n b a n k p a y o r ) t h e n a p p e a r in g thereon; or (2) A n y other form o f d esign a tio n o f the paying bank (or n on b an k payor) then appearing thereon, BULLETIN 8 w h e th e r or n o t c o n s iste n t w it h any A B A transit num ber or routing sy m b o l then appearing thereon. 11.15 N on m ach in a b le item s A n y c a s h item w h ic h can n o t b e p r o c e ss e d on our MICR h ig h -sp e e d ch e c k -p r o c e ssin g eq u ip m e n t and w h ic h is r e c e iv e d b y this B ank on Friday or, if that day be a n o n b an k in g day, on Thursday, m a y be h e ld over and p r o c e ss e d on the fo llo w in g M onday, or, if that day b e a n o n banking day, on the n e x t s u c c e e d in g banking day. Section 12, MISSING OR DESTROYED GASH ITEMS: PHOTOGRAPHIC COPIES 12.00 C redit for m issin g or d e str o y e d cash item s Credit giv e n for cash item s d isc o v e r e d to be m issin g or d estr o y e d w ill b e charged b a c k to sen d ers as fo llo w s: (a) W e w ill charge ba ck the credit g iv e n for a cash item w h ic h (i) is d isc o v e r e d to be m issin g during the initial proving of an in com in g cash letter by this Bank, or by a su b se q u e n t collecting bank or b y the payin g bank, or (ii) is k n o w n to be m issin g or d e stro yed in transit to a s u b s e quent co llectin g ban k or to the pay in g bank, and w h ic h is reported to this Bank as m issin g or d estr o y e d in accordan ce w ith our “Instructions to C ollecting Banks and Paying B an k s.” (b) W e w ill requ est the sender to furnish us w ith a properly prepared photographic c o p y of a cash item d isc o v e r e d to b e m issin g or d e stro yed after the initial proving o f an incom ing cash letter b y this Bank or by a su b seq u en t co l lectin g bank w h ic h is reported to this Bank as m issin g or d estro yed in accordance w ith our “Instructions to C ollecting Banks and Paying B an k s.” W e w ill charge back the credit given for su ch item if su ch a copy, together w ith a co p y o f the request therefor, is not re c e iv e d by this Bank, or b y a prior collectin g Federal R eserve Bank w h ic h has m ade a similar request (and w h ic h sh o u ld forw ard su ch c o p y to us w h e n received), w ith in fifteen (15) calendar days from the date the requ est w a s se n t b y the first c o llectin g Federal R eserv e Bank. 12.05 H andling o f photograph ic c o p ie s W e w ill han d le as a cash item a properly pre pared photographic c o p y o f a cash item: FEDERAL RESERVE BANK OF DALLAS BULLETIN 8 (a) If (i) the credit giv en for the original cash item w a s charged back by this or a prior c o lle c t ing Federal R eserve Bank as p rov id ed in su b paragraph (a) or (b) o f paragraph 12.00, and (ii) su ch copy, together w ith a c o p y o f the a d v ice of chargeback, is re c e iv e d b y this Bank, or by a prior co llectin g Federal R eserve Bank w h ic h has charged su ch am ount ba ck (and w h ic h forw ards su c h c o p y and advice to us w h e n received), w ith in thirty (30) calendar days from the date the am ount of su ch cash item w a s charged back b y the first co llectin g Federal R eserve Bank, or its p a ym en t or rem ittance for a photographic c o p y of a cash item or w h e th e r the return o f the c o p y to it b y a su b se q u e n t co llectin g bank w a s tim ely. N or shall a Federal R eserve Bank have any r e sp on sib ility for determ ining w h e th e r a report o f a m issin g or d e stroy ed cash item by a su b seq u en t co llectin g bank or the pay in g bank, or w h e th e r a statem en t w ith resp ect to the handling o f a photographic c o p y of a cash item by the payin g bank, is correct. (b) If su ch copy, together w ith a c o p y o f the request therefor, is re c e iv e d b y this or a prior co llectin g Federal R eserve Bank w ith in the time p ro vid ed in subparagraph (b) o f paragraph 12.00, but n e w credit w ill not be g iv e n for su ch copy, or A properly prepared photographic c o p y m ust bear a current e n d o r se m e n t o f the sender and the fo llo w in g legend, or one o f the equ ivalent effect, signed b y or in b e h a lf o f the sender: (c) If the original cash item is k n o w to be m is s ing or d estro yed in transit to the first collecting Federal R eserve Bank. 12.10 R eferen ce to B ulletin 11 The attention of senders is called to our “Instruc tions to C ollecting Banks and P aying B a n k s” to the effect that w e w ill present, send, or for w a rd a photographic c o p y su b ject to all the rules as to p a y m e n t or rem ittance for, and return of, cash item s, other than in structions regarding p rotest and w ire advice o f n onpaym ent, and su b ject also to the right o f a pay in g bank to return the photographic c o p y for credit or refund w ith in thirty (30) calendar d ays from the bank ing day of its receipt by su ch paying bank: (a) If the c o p y is a ccom p a n ied b y a statem ent, sign ed by an authorized representative of the paying bank, that the draw er o f the original cash item has re fu se d p a ym en t o f the photographic c o p y or that the paying bank has b e e n unable to con ta ct su ch drawer, or (b) If the co p y is accom p a n ied b y a p h o to graphic cop y o f b oth front and ba ck o f the orig inal p aid cash item together w ith a statem ent, sig n ed by an authorized rep resentative o f the paying bank, that such original has b e e n paid and giving inform ation as to the receipt o f such original b y the pay in g bank. 12.15 Federal R eserve Bank resp on sib ility N o Federal R eserve Bank shall h av e any r e sp o n sib ility for determ ining w h e th e r the paying bank to o k all a ction n e c e ssa r y to entitle it to recover 12.20 P h otograph ic c o p y legen d “This is a photographic facsim ile o f the original ch e c k w h ic h w a s e n d orsed b y the undersigned and reported m issin g or d e stroy ed w h ile in the regular course of bank collection. A ll prior and an y m issin g e n d o rsem en ts and the v alid ity o f this fa c sim ile are h e reb y guaranteed, and upon paym en t h e r e o f in lieu of the original check, the un d ersigned w ill h o ld each co llectin g bank and the pay or bank h a rm less from a n y lo ss suffered, provided the original ch eck is unpaid and p a y m en t is sto p p ed th ereon .” 12.25 P h otograph ic c o p ie s h a n d led w ith o u t entry (a) A sen d er m a y se n d to us w ith o u t entry a properly prepared photographic c o p y w h ic h it did n ot se n d on time as p ro vid ed in paragraph 12.05, w ith a requ est that w e ask the paying bank or a su b se q u e n t co llectin g bank to pay or remit therefor, in w h ic h e v e n t w e shall credit the sen d er and charge the payin g bank or su b s e quent co llectin g bank only if the letter specifi cally authorizes u s to do so. (b) If a returned photographic c o p y or a report o f a m issin g or d estr o y e d cash item is r e ceived w ith o u t entry from the pay in g hank or su b s e quent collectin g bank, w e w ill credit or m ake refund to the paying bank or su b seq u en t c o lle c t ing bank and charge the sender on ly if the latter specifically authorizes us to do so. (c) This Bank reserv es the right to m ake special arrangem ents in v o lv in g rev ised p rocedures to facilitate the han dling of photographic co p ies of large num bers of m issin g or destro yed cash item s. FEDERAL RESERVE BANK OF DALLAS BULLETIN 9 TABLE OF CONTENTS S e c tio n 1, GENERAL 1.00 C o llection contract 1.05 A uthority S e c tio n 2, DEFIN ITIO N S A N D REFERENCES 2.00 D efinitions, r e fe r e n c es to R egu lation J 2.05 R efe r e n c e s to Bulletin 1 S e c tio n 3, N O N C A S H ITEM S 3.00 Item s w h ic h w ill be h andled as n on cash item s 3.05 T im e item s 3.10 D em and item s 3.15 O ther dem and item s 3.20 Item s not r e c e iv e d from sender 3.25 Item s w h ic h w ill n o t be ha n d led as n o n c a sh item s 3.30 U nm atured tim e item s S e c tio n 4, DIRECT SEN D IN G 4.00 D irect se n d in g o f n o n c a sh ite m s to other Federal R ese r v e districts 4.05 Right to re fu se interdistrict item s authorized for direct sen d in g 4.10 D irect sen d in g o f n o n c a sh ite m s to other offices o f this Bank 4.15 Right to r efu se intradistrict ite m s authorized for direct sen d in g S e c tio n 5, TERM S A N D C O N D ITIO N S OF COLLECTION 5.00 5.05 5.10 5.15 5.20 R egulation J B ulletins Item s payable ou tside this District Right to c la ssify and require d ep osits Effect o f specia l instructions S e c tio n 6, H A N D L IN G BY THIS B A N K 6.00 6.05 6.10 6.15 6.20 P resen tm ent for p a ym en t P rocedure Tim e item s and m aturity date E ndorsem ents Item s w ith o u t end orsem en t S e c tio n 7, COLLECTION LETTERS 7.00 Preparation o f co lle c tio n letters by sender 7.05 S p ecia l instructions 7.10 D irect sen d in g urged 7.15 C oupons 7.20 C oupon e n v e lo p e s 7.25 C oupon o w n ersh ip certificates 7.30 O ther securities S e c tio n 8, PRO TEST A N D A D V IC E OF NONPAYM ENT 8.00 U niform in stru ctions 8.05 Item s w ith U.S. Treasury and similar en d o r se m e n ts 8.10 R e sp o n sib ility for protest 8.15 D eterm ination o f resp on sib ility 8.20 C om m u n ication s by w ire; c o s ts and charges 8.25 Interpretation o f term s req uesting w ire a dvice S ectio n 9, AVAILABILITY OF PROCEEDS OF N O N C A S H ITEMS 9.00 G eneral 9.05 B ankers’ a c c e p ta n ces 9.10 Late claim s for error adjustm ents Section 10, COLLECTION CHARGES 10.00 Charges on bonds, debentures, and cou p o n s 10.05 Charges on ch e c k s 10.10 Charges by Federal R eserve Banks S ectio n 11, RETU R N OF N O N C A S H ITEM S 11.00 General 11.05 N o n c a sh ite m s to be p r esen ted for a c cep ta n ce 11.10 Effect o f s e c tio n 11.05 S ectio n 12, PHO TO G R A PH IC COPIES 12.00 R equirem en ts for handling A PPE N D IX A , P a ym en t V ou ch ers on Letters o f Credit A -1.00 A -2.00 A -3.00 A -4.00 H an d led as n o n c a sh item E ffectuation of p a ym en t N onpaym ent Claim s for refund A PPE N D IX B, C o u p o n s R e c e iv e d for P aym ent B-1.00 B-2.00 B-3.00 B-4.00 B-5.00 General Procedure O w n ersh ip certificate form s C oupons n o t h an d led Im m ediate credit FEDERAL RESERVE BANK OF DALLAS (c) Postage, insurance, or e x p ress, or other trans portation charges incurred in forw ard ing items; (d) A ll telegraph, cable, and te lep h on e charges; and (e) Protest fees. Section 11, RETURN OF NONCASH ITEMS 11.00 G eneral A n o n c a sh item for w h ic h final p a y m e n t h a s b e e n re c e iv e d by a Federal R ese r v e Bank cannot be returned to a Federal R ese r v e Bank by a s u b se q u e n t co lle c tin g bank, a pay in g bank, or n o nbank p a y or fo r credit or refund. H o w e v e r , su ch an item m a y be returned to u s w ith o u t entry and w ith a requ est that w e a sk our sender to m a k e refu nd therefor, in w h ic h e v e n t w e w ill m ak e refu nd to the s u b se q u e n t c o llectin g bank, pay in g bank, or n on b an k payor, as the c a se m a y be, and charge our s e n d e r on ly if the latter specifically a u thorizes u s to do so. 11.05 N o n c a sh item s to b e p resen ted fo r a c c e p t an ce W e w ill re c e iv e from senders, for p r esen tm en t for accep ta n ce, any n o n a c c e p te d n o n c a s h item w h ic h p r o v id e s that it m u st be p re se n te d for a ccep tan ce, or w h ic h is p a y ab le e ls e w h e r e than at the r e sid e n c e or p la c e o f b u sin e ss o f the d raw ee, or the date o f p a y m e n t o f w h ic h d e p e n d s u p on p r esen tm en t for accep ta n ce, su b ject to the fo llo w in g term s and conditions: (1) N o n c a s h item s to be presen ted for a c cep t a n ce m ust be d e p o site d by sen d ers in a separate c o lle c tio n letter w h ic h sta te s that su ch item s are to be so p r esen ted and sets forth any other in stru ctio n s o f the sender, n o t in c o n siste n t w ith the p r o v isio n s o f this se c tio n and se c tio n 11.10 h ereof, regarding such item s. (2) A Federal R eserve Bank or a subseq u en t co lle c tin g bank m ay p resent any su ch item for a c cep ta n ce in an y m anner authorized b y law . (3) A n y su b seq u en t collectin g bank to w h ic h this Bank fo rw a rd s any su ch item for p r e se n t m ent for accep ta n ce w ill give us prom pt notice o f a ccep tance or refusal o f the item. (4) N o Federal R eserve Bank or su b seq u en t co lle c tin g bank shall, u p o n the a c cep ta n ce of any such item , d e liv e r to the draw ee th e r e o f any a c c o m p an yin g d o c u m e n ts u n le ss specifically in structed b y the sen d e r to do so. BULLETIN 9 11.10 E ffect o f se c tio n 11.05 A n o n c a s h item r e c e iv e d b y u s u nd er se ctio n 11.05 h e r e o f w ill b e p r e se n te d for accep tan ce by u s or b y a su b se q u e n t co lle c tin g bank se le c te d by us. If the ite m is n o t accep ted , it w ill be returned to the sender; if a c c e p te d and: [1J If the item is p a ya b le 30 d ay s or le s s after sight or by its term s m atures 30 d a y s or le s s after the receipt th e r e o f b y us, the item w ill be held for p r e se n tm e n t for p a y m e n t by us, by the su b se q u e n t c o llectin g bank, or by the dra w ee bank; or if the se n d e r so requests, the item w ill be returned to th e sender; or (2) If the item is payable m ore than 30 days after sight or b y its term s m atures m ore than 30 d ays after the receipt th e r e o f by us, the item w ill b e returned to the sender. Section 12, PHOTOGRAPHIC COPIES 1 2.00 R equ irem en ts fo r handling In the e v e n t w e receive, as a n o n c a sh item, a properly prepared photographic co p y of a lost or d estr o y e d item w h ic h w a s a ch e c k or other dem and item w ith o u t securities, bills o f lading, or other d o cu m en ts attached and w h ic h w a s eligible for handling as a n o n c a s h item and the c o p y bears a current en d o r se m e n t o f the sender and the fo llo w in g legend, or on e of equivalent effect, signed by or in b e h a lf of the sender: “T h is is a photographic fa c sim ile o f the original item w h ic h w a s e n d o rsed b y the u n d ersigned and reported lost, stolen, or d estro y ed w h ile in the regular co urse o f bank collection. A ll prior and a n y m iss in g en d o r se m e n ts and the va lid ity o f th is fa c sim ile are hereby guaranteed, and u p on p ay m en t h e r e o f in lieu o f the original item , the u n d ersig n ed w ill h old e ach co lle c tin g bank and the payo r bank h a rm less from any lo s s s u f fered, p ro v id ed th e original item is unpaid and p a y m e n t is sto p p ed th e r e o n .” W e w ill han dle the cop y as fo llo w s: (1) W e w ill presen t or sen d the copy, as a n o n cash item , to the payin g bank (or nonbank payor) n a m ed o n the original item , subject to all the term s and co n d itio n s o f this bulletin; or (2) If such pay in g ban k (or n on b an k payor) re f u s e s to h an d le the copy, w e w ill return the copy to the sender. BULLETIN 11 Instructions to Collecting and Paying Banks FEDERAL RESERVE BANK OF DALLAS SCOPE This b u lletin sets forth the in stru ctio n s to be fo llo w e d in the h an dling of, and pay m en t or rem ittance for, c h e c k s and other ca sh ite m s c on ta in ed in ca sh letters r e c e iv e d from this Bank. TABLE OF CONTENTS S e c tio n 1, DEFIN ITIO N S A N D GENERAL PR O V ISIO N S 5.30 5.35 5.40 1.00 C o llectio n contract 1.05 A u th o rity 1.10 D efinitions, reference to R egulation J 1.15 R e fe r e n c e to B ulletin 1 1.20 U s e o f term “w ir e ” 1.25 A p p lic a b ility o f this b u lletin S ectio n 6, U N IFO RM IN STR U C T IO N S REG ARDING PR O TEST A N D A DVICE OF N O N P A Y M E N T 6.00 6.05 6.10 6.15 S e c tio n 2, PR ESENTM ENT FOR PA Y M EN T 7.00 Standardization, sorting, routing, and m e c h a n iz e d p r o c e ssin g 7.05 R e feren ce to B ulletin 8 7.10 C ash letters r e c e iv e d in m utila ted con d itio n 3.00 C ash item w ith o u t e n d o rsem en t 3.05 W arranties S e c tio n 4, PA Y M E N T FOR C A SH LETTERS T im e o f p ay m en t Form o f p a ym en t A d ju stm e n t for reserve com putation C ollecting banks D ifferences and adjustm ents Late claim s for error adjustm ents S ectio n 8, M ISSIN G OR DESTROYED C A SH ITEMS: PHO TO G R A PH IC COPIES 8.00 Credit for m issin g or d estr o y e d cash item s 8.05 H andling o f p hotographic copies S e c tio n 5, RETU R N ITEMS 8.10 Tim e limits 5.00 R e c o v e r y 5.05 T im e for return b y collectin g banks 5.10 W arranty o f c o llectin g banks 5.15 W arranty o f payin g hanks 5.20 Return w ith o u t entry 5.25 R ea so n for n o n p a y m e n t on item 8.15 Federal R eserve Bank responsibility 8:20 Photographic c o p y legend 8.25 Photographic co p ies h an d le d w ith o u t entry SUPPLEM ENT A, Return o f C ash Item s i 4-1-77 General U nited States o bligation s R esp on sib ility o f paying bank R e sp o n sib ility o f this Bank S ectio n 7, PROCEDURES S e c tio n 3, EN D O R SEM E N T S 4.00 4.05 4.10 4.15 4.20 4.25 Federal R eserv e resp on sib ility M ainten a n ce o f records P ro vision a l credits * A FEDERAL RESERVE BANK OF DALLAS BULLETIN 11 le s s o f am ount, e n d o r se d by the U n ite d States Treasury, or en d o r se d fo r credit to the U nited S ta te s Treasury, or b earing o n its fa c e or in an en d o r se m e n t the legen d , “This c h e c k is in p a y m en t o f an obligation to the U nited S ta tes and m u st be paid at par. N.P. D o not w ire n o n p a y m e n t.” or w o r d s o f sim ilar import. 6.10 R esp o n sib ility o f p a y in g bank T he p a y in g bank shall b e r esp o n sib le for m aking or p r o vid in g for a n y p ro te st of a ca sh item prote sta b le u nder the p r o v is io n s o f this bulletin and for g iving any w ire a d v ice o f n o n p a y m e n t required b y the p r o v isio n s h ereof, e x c e p t as m ay be o th e r w is e p ro v id e d by the rules or p ractices o f any clearing h o u s e through w h ic h the item w a s p r e se n te d or by agreem ent b e t w e e n th is Bank and th e payin g bank. 6.15 R e sp o n sib ility o f this Bank T his Bank shall h a v e no r e sp on sib ility for deter m ining w h e th e r any other bank r esp o n sib le th erefor h a s [a] m ade or p ro v id ed for the protest o f any cash item p rotestab le hereunder, or (b) g iv e n any w ir e a d v ic e o f n o n p a y m e n t required hereunder. Section 7, PROCEDURES 7.00 S t a n d a r d iz a t io n , m ec h a n iz e d p r o c e ssin g s o r t in g , r o u t in g and To facilitate the sorting, routing, and m e ch an ized p r o c e ssin g o f c a sh item s, and th ereb y prom ote earlier p r e se n tm e n t and return o f u npaid item s, pay in g b a nks are urged: (1] In c o n fo r m ity w ith the A B A M agnetic Ink Character R e cog n itio n Program, to preprint the routing s y m b o l and the suffix o f the transit num ber on all c a s h ite m s in m ag n etic ink in E-13B type in the m anner prescribed, and at the lo c a tion a ssigned, by the A B A . (2] To clearly im print the appropriate transit num ber-routing sy m b o l in fractional form in the upper right corner o f all ca sh ite m s p a y ab le by or through su c h p ay in g banks, preferably in Gothic type, and the fa c e of w h ic h m e a su r e s at le a st 8 p oin ts v ertically or 1 / 9 o f an inch from the top to the b ottom of the in d ividual characters. (3] To co n form cash ite m s to the standards pre scribed by th e A B A , in c lu d in g a m inim um w id th of 2 3A in ch es, a m a x im u m w id th o f 32/3 in ch es, a m in im um len g th o f 6 in c h e s, and a m a xim um le n g th o f 83/4 in c h e s, and to restrict ca sh ite m s to a single th ic k n e ss o f card or paper. (4) C ash item s returned b y collecting b a n k s and pay in g banks sh o u ld n o t bear on the back of the en d orsem ent, paid or other id e n tify in g stam p of the p ayin g bank u n le ss that stam p ha s b een can celled. T his Bank or another R eserve Bank w h ic h has h an d le d an item , sh all not a ssu m e any r e sp o n sib ility to the sender, to any other o w n e r or h older of the item , or to any other per son, for a n y dela y resulting from action taken b y a R eserve Bank in returning an item on the basis of the u n c a n c e lle d endorsem ent, paid or other id en tify in g stam p o f the pay in g bank on the ba ck o f the item. 7.05 R efe r e n c e to B u lletin 8 The attention o f payin g banks and collecting banks is called to our B ulletin 8, to the effect that: (1) T his Bank m a y present, send, or forw a rd any c ash item , in acco rdance w ith se c tio n 210.6 o f R egulation J, on the b asis of: (a) A n y A B A transit num ber or routing sy m b o l appearing thereon at the tim e o f its receipt by us, w h e th e r in scrib ed by m ag n etic in k or b y any other m ea n s, and w h e th e r or n o t su ch transit num ber or routing s y m b o l is c o n s iste n t w ith each other form o f d e sig n a tio n o f th e pay in g bank (or n on b a n k payor) then appearing thereon; or (b) A n y other fo rm o f d e sig n a tio n o f the paying bank (or no n b a n k payor) then appearing thereon, w h e th e r or n o t c o n siste n t w ith an y A B A transit num ber or routing sy m b o l then appearing th ere on; and (2) If, in our judgm ent, the p r o c e ssin g o f any ca sh item by u s requires the inscrip tio n th ere on in m ag n etic ink, or o th erw ise, o f the A B A transit num ber, th e routing sym bol, or both, of the p a yin g ban k (or n on b a n k payor) or requires the in scription thereon in m agn etic ink o f the am ount o f su ch item , w e m a y so inscribe the item and present, send, or forw ard it a cco rd ingly; and the sen d er of su ch item shall be d eem ed to a ssu m e the risk o f lo s s resulting from delay ca u sed by the act o f in scribin g such am ount or su ch num ber, sym bol, or both. 7.10 C ash le tte r s r e c e iv e d in m utilated con d ition In the e v e n t that our cash letter is re c e iv e d in a m u tilated condition, p le a se te le p h o n e this Bank b e fo re attem ptin g to fu n c tio n any portion th ere FEDERAL RESERVE BANK OF DALLAS of. U n d er certain co n d itio n s w h e n the cash letter is returned intact, tracing and identification of m utila ted or d estr o y e d ca sh ite m s is expedited. Section 8, MISSING OR DESTROYED CASH ITEMS; PHOTOGRAPHIC COPIES 8.00 Credit for m issin g or d estro y ed ca sh item s The am ount paid or rem itted for cash item s dis co v e r e d to be m issin g or d estro yed w ill be credited or refu n d ed to su b seq u en t collecting banks or payin g banks as fo llo w s: (a) W e w ill credit or refund the am ount paid or rem itted for a cash item w h ic h is d isc o v e r e d to be m issin g during the initial proving of an in co m ing cash letter b y a su b se q u e n t collecting bank or the pay in g bank, or w h ic h is k n o w n to be m issin g or d estr o y e d in transit to a su b se quent collectin g bank or the paying bank, and con cern in g w h ic h a report is r e ceiv ed by this Bank, or by a su b se q u e n t collectin g Federal R eserve Bank (w hich sen d s such report to us w h e n received) w ith in five (5) b u sin e ss days of su ch su b se q u e n t co llectin g or payin g bank from the date of the cash letter w h ic h listed the m is s ing or d estroy ed item. (b) W e w ill credit or refund the am ount paid or rem itted for a cash item (i) w h ic h is d isco vered to be m issin g or d estr o y e d after the initial p ro v ing o f an in co m in g cash letter by a subseq u en t co lle c tin g bank, (ii) concerning w h ic h a report is re c e iv e d b y this Bank, or by a su b seq u en t c o l lecting Federal R eserve Bank (w hich sen d s such report to us w h e n received), w ith in five (5) b u si n e ss days o f su ch su b seq u en t collecting bank from the date o f the cash letter w h ic h listed the m issin g or d estroy ed item and (iii) the am ount o f w h ic h w e h a v e charged ba ck to the sender after the fifteen day period p rovided in su b paragraph (b) of paragraph 12.00 of our Bulletin 8 entitled “C ollection o f Cash Item s.” 8.05 H andling o f photograp h ic co p ies In the ev e n t w e r eceive a properly prepared photograhic c o p y o f a cash item in accordance w ith our Bulletin 8 entitled “C ollection o f Cash Item s,” w e w ill present, send, or forw ard such co p y as a cash item subject to all the rules as to p a y m e n t or rem ittance for, and return of, cash item s, other than the in structions regarding pro te st and w ire advice o f n onpaym en t, but n e w BULLETIN 11 p ay m en t or rem ittance sh all n o t be required for a photographic cop y w h e r e p a y m e n t or rem it tance for the original cash item has n o t been credited or refunded. S uch a photographic cop y w ill also be presented, sent, or forw a rd ed su b ject to the right o f a pay in g bank to return the co p y for credit or refund w ith in thirty (30) cal endar days from the banking day of its receipt by such paying bank, provided: (a) The c o p y is a ccom p a n ied b y a statem ent, signed by an authorized represen tative of the paying bank, that the drawer o f the original cash item has r efu sed p a y m en t of the photographic copy or that the paying bank has b een unable to contact su ch drawer, or (b) The co p y is a ccom p a n ied by a photographic copy o f b oth front and back of the paid original cash item together w ith a statem ent, sig n ed by an authorized representative o f the paying bank, that su ch original has b e e n paid and giving (i) the nam e and routing number, if any, o f the bank or other person from w h ic h such original w a s r eceiv ed and (ii) the date on w h ic h such original w a s r eceiv ed b y the pay in g bank or, in the ev en t such original w a s re c e iv e d from this Bank, the date of the cash letter that contain ed su ch orig inal and the dollar am ounts of the item s listed prior and su b seq u en t to su ch original in such cash letter, together w ith the total am ount of the cash letter, the batch or package therein w h ic h contained the original cash item , and the s e quence num ber of the original cash item , if any. 8.10 T im e lim its A n y su b seq u en t collecting bank w h ic h re c e iv e s an unpaid photographic copy from a payin g bank for return to us sh ou ld forw ard the return copy to us befo re m idnight o f its n e x t banking day fo llo w in g the banking day of its receipt o f the return copy. 8.15 Federal R eserv e Bank resp o n sib ility N o Federal R eserve Bank shall have any r e sp o n sib ility for determ ining w h e th e r the p ayin g bank took all action n e c e s sa r y to entitle it to recover its pay m en t or rem ittance for a photographic co p y of a cash item w ith in the tim es lim ited therefor, by the p ro vision s of paragraph 8.05 or w h eth er any su b seq u en t collecting bank returned the copy to it w ith in the time lim ited therefor by paragraph 8.10. N or shall a Federal R eserve Bank h a v e any responsibility for determ ining FEDERAL RESERVE BANK OF DALLAS w h e th e r a report of a m issin g or d estr o y e d cash item b y a su b se q u e n t collectin g bank or the p ay ing bank, or w h e th e r a statem en t w ith respect to the handlin g of a photographic c o p y of a cash item by the payin g bank, is correct. 8.20 Photographic copy legend A properly prepared photographic c o p y w ill bear a current e n d o rsem en t o f the sen d er and the fo llo w in g legend, or one of the eq uivalent effect, sig n ed by or in b e h a lf o f the sender: “T his is a photographic fa c sim ile of the original ch e c k w h ic h w a s end orsed b y the undersigned and reported m issin g or d estr o y e d w h ile in the regular course of bank collection. A ll prior and a n y m issin g e n d o rsem en ts and the v alid ity of this facsim ile are h ereb y guaranteed, and upon p a y m e n t h e r e o f in lieu o f the original check, the u n d ersigned w ill h o ld each co llectin g bank and the payor bank harm less from any lo s s suffered, p ro vid ed the original ch e c k is unpaid and p a y m en t is stop p ed th ereon .” 8.25 P hotograp hic c o p ie s h a n d led w ith o u t entry (a) (i) A payin g bank, or a su b se q u e n t collecting bank, m ay return w ith o u t entry, w ith appro priate docum entation, a photograph ic c o p y w h ic h the paying bank or su b se q u e n t collectin g bank did n ot return w ith in the time p rovided in para graph 8.05, p rov id ed su ch return is m ade w ith in nine (9) calendar m o n th s from the ban king day o f its receip t by su ch pay in g bank, and (ii) a p ayin g bank, su b seq u en t collectin g bank, or this Bank m ay report w ith o u t entry as m issin g or d estr o y e d a cash item w h ic h it d isc o v e r e d to be m issin g or d estroy ed either after the time p rovided in paragraph 8.00 or after the initial proving of the in com in g cash letter. In the ev e n t w e receive such a w ith o u t entry return p h o to graphic co p y or such a w ith o u t entry report of a m issin g or d estr o y e d cash item w ith a request that w e ask our sender to m ake refund therefor, w e shall credit or m ake refund to the paying bank or su b seq u en t collectin g bank and charge our sen d er o n ly if the latter specfically author iz e s u s to do so. (b) If a properly prepared photographic cop y is re c e iv e d w ith o u t entry from a sender, w e w ill credit the sen d er and charge the paying bank or a su b seq u en t collecting bank only if the latter specifically authorizes us to do so. (c) This Bank reserv es the right to m ake special arrangem ents in v o lv in g rev ised procedures to facilitate the h a ndling of photographic copies o f large num bers of m issin g or d e stroy ed cash item s. BULLETIN 11 Supplement A RETURN OF CASH ITEMS S e c tio n 210.12 of R egulation J, c a p tio n ed “Return o f C ash Ite m s,” p r o v id e s as fo llo w s : “ (a) A p a y in g bank that r e c e iv e s a cash item from or through a Federal R ese r v e Bank, other w i s e than for im m ed ia te p a y m e n t over the counter, and that p a y s or rem its for su ch item as p ro v id ed in § 210.9(a) o f this Part sh all h a v e the right to reco ver an y p a y m e n t or rem ittance so m a d e if, before it has finally paid the item , it returns th e ite m b e fo re m id n ig h t o f its bank ing day n e x t f o llo w in g the banking day o f re ceipt or takes su ch other action to reco v er such p a y m e n t or rem ittance w ith in su ch tim e and by su c h m e a n s as m a y be p ro v id e d b y applicable State la w : P r o v id e d , that the fo rego in g p ro v is io n s shall n o t exte n d , nor shall the tim e h erein p r o v id e d for return b e e x te n d e d by, the tim e for return o f u n paid ite m s fixed by the r u le s a n d p r a c t i c e s o f a n y c l e a r i n g h o u s e through w h ic h th e item w a s p r e se n te d or fixed by th e p r o v isio n s o f any sp ecia l co lle c tio n a greem ent pursuant to w h ic h it w a s presen ted. (b) A n y p a yin g bank w h ic h ta k es or re c e iv e s a credit or obtains a refund fo r the am ount o f any p a y m e n t or rem ittance m ade by it in respect o f a ca sh ite m r e c e iv e d by it from or through a Federal R ese r v e B ank shall b e d e e m e d (1) to w arrant to su c h Federal R eserv e Bank, to a su b se q u e n t co lle c tin g bank, and to the sen d er and all prior parties that it took all a ction n e c e ssa r y to entitle it to recov er su ch p ay m en t or rem ittance w ith in the tim e or tim es lim ited there for b y the p r o v isio n s o f this part, by the appli cab le rules and p ractices o f any clearing h o u se through w h ic h the item w a s presented, b y the a pplicable p ro v isio n s o f any sp e c ia l collection a g reem ent pursuant to w h ic h it w a s presented, and, e x c e p t as a longer tim e m ay be afforded b y the p r o v isio n s o f this part, b y applicable S tate law ; and (2) to agree to in d e m n ify su ch Federal R eserve Bank for any lo s s or e x p e n s e su sta in e d (including but not lim ited to a tto r n e y s’ fe e s and e x p e n s e s o f litigation) resulting from its a ction in g iving su ch credit or m aking such refund, or in m aking any charge to, or obtaining an y refund from, the sender. N o Federal R eserv e Bank shall h a v e any r e sp on sib ility to such p a y ing bank or any su b se q u e n t co lle c tin g bank or to the sen d e r o f the item or a n y other prior party thereon for determ ining w h e th e r the action h e r e in a b o v e referred to w a s tim e ly .”
