The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BAMK OF !MEW YORK [ Circular No. 10229 1 March 16, 1988 PROCEDURES FOR REDEEMING FOOD COUPONS To All Depository Institutions, and Others Concerned, in the Second Federal Reserve District: The purpose of this circular is to supplement the procedures provided for in Operating Circular No. 4 for the handling of food coupons by this Bank. The instructions set forth in this circular super sede those in Circular No. 8708, dated December 18, 1979. As specified in Appendix C of Operating Circular No. 4, food coupons will be handled by this Bank as cash items in accordance with an agreement between the Secretary of Agriculture, on behalf of the United States, and the Federal Reserve Banks as depositaries and fiscal agents of the United States pursuant to the authorization of the Secretary of the Treasury. With respect to matters not covered by this agreement, the terms and conditions of Regulation J, applicable to cash items, and of our time schedules shall be applicable to such coupons. This Bank will receive food coupons from depository institutions that are insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation and that maintain an account with us or that have arranged to deposit food coupons for credit through a correspondent having an account with us. Food coupons in denominations of $1 (brown), $5 (purple), and $10 (blue-green) deposited with and cancelled by depository institutions may be forwarded to this Bank or its Buffalo Branch following verification. This Bank, as fiscal agent of the United States, will receive at its Head Office and Buffalo Branch any such food coupons forwarded to us by Second District depository institu tions and credit the appropriate reserve accounts. Any depository institution that elects to deposit food coupons with us through another depository institution should notify us by letter of its intention to do so and designate the depository institution to whose account credit is to be given. In addition, the correspondent depository institution must provide us with authorization in writing of its willing ness to accept such credit, as well as any resultant debit or credit adjustment entries. Redeemed food coupons should ordinarily be forwarded to the office of this Bank that main tains the reserve account to which the proceeds of the coupons are to be credited. However, any depository institution in the Head Office territory of this Bank may send its redeemed food coupons to our Buffalo Branch, where the District processing takes place, if by doing so it can save time or expense. Immediate credit will be given for redeemed food coupons received at our Head Office prior to 2:00 p.m ., or at our Buffalo Branch prior to 3:00 p.m. Any necessary adjustments for over ages or shortages will be made after final verification, and the appropriate advice will be sent to the depository institution. Cancellation of coupons In accordance with the procedures of the United States Department of Agriculture, the first depository institution receiving food coupons for redemption m u st ca n cel them by indelibly stamping “PAID” or “CANCELLED” and the name of the receiving depository institution, or its nine-digit routing number, on the fa c e o f the coupons. The endorsement stamp that a depository institution uses to cancel checks may not be used for cancelling food coupons. As an alternative, depository institutions may also arrange to have their customers pre-cancel the coupons. Under such an arrangement the retailer or wholesaler, in lieu of marking or stamping his store or identification number on the back of each coupon, is permitted to ca n cel the fa c e o f each cou p o n using a stamp not larger than 1V i inches by 2 inches that contains the following information: 1. The Food Stamp Program Authorization Number or the name of the store; 2. The word “PAID” in letters approximately 3A inch in height; and 3. The routing number of the depository institution. Proper depositing institution cancellations on each coupon are extremely important for control purposes. Accordingly, depositing institutions have the responsibility to ascertain that all food cou pons presented for redemption are cancelled properly. U nder U nited S ta tes D e p a rtm e n t o f A g ric u l ture reg u la tio n s, co u p o n s su b m itted to depo sito ry institu tio n s f o r cred it or cash m u st be p ro p e rly e n d o rsed by the d ep o sitin g a u th o rized retail fo o d store o r w holesale f o o d concern a n d m u st be a c c o m p a n ied by a p ro p e rly co m p leted a n d sig n ed redem ption certificate. Packaging Redeemed food coupons should be separately sorted according to denomination and arranged, face and top up, in standard packages of 100 co upons each; under no circumstances should the de nominations be mixed. D e p o sits m ay include only one o d d -lo t p a c k a g e (less than 100 coupons) o f each d en o m in a tio n . All packages of coupons (standard and odd-lot) must be bound with a paper strap, and the dollar amount of the coupons enclosed in the package must be indicated on the strap, together with the name and address of the depositing institution. If volume warrants, standard packages of food coupons must be arranged according to denomi nation, in bundles consisting of 10 packages; under no circumstances should packages of different denominations be mixed in a bundle. Each bundle of 10 packages should be well secured, preferably by no more than three heavy rubber bands, w hich sh o u ld be p la c e d a ro u n d each en d o f the sh o rt axis a n d on ce a ro u n d the long a xis o f the bundle. Pins, clips, or staples should not be used to bind pack ages or bundles, nor should the food coupon packages or bundles be included in deposits of checks or in deposits of cash. Deposit tickets In forwarding redeemed food coupons to us for payment, depositing institutions are requested to use Food Coupon Deposit Document Form F N S-521 as the deposit ticket. That form provides space for indicating the total number of tickets and the total dollar amount for each denomination, as well as the dollar total of the deposit. Space is also provided on the ticket to indicate the office where 2 the deposit was prepared, the nine-digit check routing number, and the total amount of Food Stamp Redemption Certificates shipped. Instructions for completing the ticket are printed on the back of the form. The last copy of the deposit ticket (green copy) should be retained by the depository insti tution. It is im p o rta n t th a t the tic k et be p ro p e rly a n d accu ra tely p re p a re d in o rd er to insure th a t the a p p ro p ria te d ep o sito ry in stitu tio n receives the p ro p e r credit. Preprinted deposit tickets may be ob tained from the Buffalo Branch (See section headed “Ordering supplies”). Deposit envelopes Deposit envelopes (gray) should be used to enclose the deposit ticket that must accompany each food coupon deposit. Depository institutions forwarding food coupon deposits to the Head Office of this Bank should use envelope C O U P C 7 4 N \ institutions forwarding food coupon deposits to our Buffalo Branch should use envelope C O U P C 7 4 B . For first class mail, courier, or messenger deliveries, the envelope (with deposit ticket enclosed) should be affixed securely to the o utside of the package or bundle containing the redeemed coupons; if a canvas bag is used for shipment, the envelope should be tied to the neck of the bag. A delay in credit may result if the envelope is not fastened properly to the o u tsid e of the coupon deposit. For registered mail shipments, the deposit envelope must be enclosed inside the package. Consolidation Any depositing institution that has more than one office in a city or municipality should consol idate the food coupons received from all of its offices within the city or municipality before depos iting the coupons with this Bank. Food coupons totaling $100 or less should be held and consolidated into one aggregate deposit and forwarded for redemption weekly. Liability Under revised Federal Regulations effective September 14,1984, the Food and Nutrition Serv ice of the Department of Agriculture is not liable for food coupons lost in the custody of a financial institution or in transit to a Federal Reserve Bank (7 C.F.R. § 278.5(c)(1987)). Partial coupons Depository institutions may accept for redemption at face value a portion of a coupon that consists of at least three-fifths of a whole coupon. L e ss than three-fifths o f a w hole coupon w ill not be a cc ep te d by this B a n k f o r red em p tio n . Such coupons should be returned to the retailer or whole saler, together with instructions to contact the local Food and Nutrition Service Field Office of the Department of Agriculture for a determination as to their redemption value. Any partial coupons received by this Bank that do not meet the three-fifths requirement will be returned to the sending institution and its account will be debited accordingly. Old series food coupons Old series food coupons in the $.50, $2, and old style $5 denominations should not be included in deposits sent to this Bank. Such coupons can be redeemed only by direct presentment to the local Food and Nutrition Service Field Office. 3 Ordering seppSnes Supplies of food coupon deposit documents (tickets), deposit envelopes, $1, $5, and $10 front pieces, and reorder forms may be obtained from this Bank by calling Tel. No. 716-849-5060 or 5160 or writing to: Buffalo Branch Federal Reserve Bank of New York Cash Division P.O. Box 961 Buffalo, New York 14240 General This Bank maintains an address file of the depository institutions that are served in the Second Federal Reserve District. All of the pre-printed deposit documents are obtained from this file, so it is very important that any changes of address or name, additions or deletions of offices, and similar information be reported immediately. Write to or call the Buffalo Branch to report any such changes. It is also important that the information contained in this circular be brought to the attention of those persons who have responsibility for your food coupon operations, and, in particular, anyone who prepares food coupon deposits. Additional copies of this circular will be furnished upon re quest. Food coupon deposits received in a condition that does not comply with the provisions of this circular will be returned to the depository institution at its expense for proper deposit preparation. If you have any questions about our food coupon operations or the provisions of this circular, please contact the Food Coupon Section of the Cash Division at the Buffalo Branch (Tel. No. 716-849-5160). E. G e r a l d C o r r ig a n , P resid en t.
@FedFRASER