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FEDERAL RESERVE BANK OF N EW YORK Circular No. 87081 December 18, 1979 J PROCEDURES FOR REDEEMING FOOD COUPONS T o A l l C o m m e r c ia l B a n k s , a n d O t h e r s C o n c e r n e d , in th e S e c o n d F e d e r a l R e s e r v e D i s t r i c t : The purpose of this circular is to supplement the procedures provided for in Operating Circular No. 4, Revised September 18, 1979, for the handling of food coupons by this Bank. The instructions set forth in this circular supersede those in Circular No. 6551, dated May 29, 1970. 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 made by the Secretary of Agriculture, on behalf of the United States, and by the Federal Reserve Banks as depositaries and fiscal agents of the United States pursuant to the authorization o f 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 only from member banks, other senders that maintain accounts with us, and nonmember banks that have arranged with us to send coupons to us for collection for credit to the account of a member bank on our books. Food coupons in denominations of $1 (brow n), $5 (purple), and $10 (blue-green) deposited with and cancelled by commercial banks may be forwarded to this Bank or its 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 member and nonmember banks and credit the appropriate reserve accounts. Any nonmember bank that elects to deposit food coupons directly with us should notify us by letter of its intention to do so, and designate the member bank to whose account credit is to be given. In addition, the correspondent member bank must provide us with authorization, in writing, of its willingness 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 maintains the reserve account to which the proceeds of the coupons are to be credited. However, any bank 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 overages or shortages will be made after final verification, and the appropriate advice will be sent to the depositing bank. C a n c e lla tio n o f c o u p o n s In accordance with the procedures of the United States Department of Agriculture, the first bank receiving food coupons for redemption must cancel them by indelibly stamping “ P A ID ” or “ C A N C E L L E D ” and the name of the receiving bank, or its nine-digit routing number, on the face o f the coupons. The endorsement stamp that a bank uses to cancel checks may not be used for can celling food coupons. As an alternative, banks may also arrange to have their customers precancel the coupons. Under such an arrangement the retailer or wholesaler, in lieu of marking or stamping his store or identi fication number on the back of each coupon, is permitted to cancel the face o f each coupon using a stamp not larger than \y2 inches by 2 inches, which contains the following information: 1. The Food Stamp Program Authorization Number or the name of the store, 2. The word “ P A ID ” in letters approximately ^ inch in height, and 3. The routing number o f the depositing bank. Proper bank cancellations on each coupon are extremely important for control purposes. A c cordingly, depositing banks have the responsibility to ascertain that all food coupons presented for redemption are cancelled properly. Packaging Redeemed food coupons should be separately sorted according to denomination and arranged, face and top up, in standard packages of 100 coupons each; under no circumstances should the denominations be mixed. Banks that do not deposit coupons on a daily basis and, therefore, would encounter substantial delays in obtaining credit by holding over odd amounts of coupons may include in their deposit one odd-lot package (less than 100 coupons) of each denomination. 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 bank. If volume warrants, standard packages of food coupons should be arranged according to de nomination, in bundles consisting of 10 packages; under no circumstances should packages of dif ferent denominations be mixed in a bundle. Each bundle of 10 packages should be well secured, preferably by no more than three heavy rubber bands. Pins, clips or staples should not be used to bind packages or bundles, nor should the food coupon packages or bundles be included in with deposits o f checks or with deposits of cash items. D o not enclose Food Stamp Redemption Certificate cards (F N S-278) in with your food coupon deposit. Deposit tickets In forwarding redeemed food coupons to us for payment, banks are requested to use our deposit tickets (Form COL 10). These deposit tickets provide space for indicating the total number and the total dollar amount of each denomination, as well as the dollar total of the deposit. Space is also provided on the ticket to indicate the office where the deposit was prepared, the name of the person who prepared the deposit, and the telephone number where this person may be reached should we need to inform the depositor of a difference or other deposit problem. The last copy of the deposit ticket (green copy) should be retained by the depositing bank. Deposit envelopes Deposit envelopes (gray) should be used to enclose the deposit ticket that must accompany each food coupon deposit. Banks forwarding food coupon deposits to the Head Office of this Bank should use envelope COL 11; banks forwarding food coupon deposits to our Buffalo Branch should use envelope COUP C74B. For first class mail, courier, or messenger deliveries, the envelope (with the deposit ticket enclosed) should be affixed securely to the outside of the package or bundle con taining 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 out side of the coupon deposit. For registered mail shipments, the deposit envelope must be enclosed inside the package. Consolidation Any bank that has more than one office in a city should consolidate the food coupons received at all of its offices within the city before depositing the coupons with this Bank. 2 Partial coupons Banks may accept for redemption at face value a portion of a coupon that consists of at least three-fifths of a whole coupon. Less than three-fifths of a whole coupon will not he accepted by this Bank for redemption. Such coupons should be returned to the retailer or wholesaler, 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 bank and its account will be debited accordingly. Old series food coupons Old series food coupons in the 50 cent, $2, and old style $5 denominations should not be included in deposits sent to this Bank. Such coupons can only be redeemed by direct presentment to the local Food and Nutrition Service Field Office. Ordering supplies Supplies of food coupon deposit tickets and deposit envelopes may be obtained from this Bank by calling or writing to the appropriate area as follow s: Banks that deposit food coupons with our Head Office should contact: Federal Reserve Bank of New York Post Office Division Federal Reserve P.O. Station New York, N.Y. 10045 (Tel. No. 212-791-5404) Banks that deposit food coupons with our Buffalo Branch should contact: Buffalo Branch Federal Reserve Bank of New York Cash Division P.O. Box 961 Buffalo, New York 14240 (Tel. No. 716-849-5041) It is important that the information contained in this circular be brought to the attention of those persons who have responsibility for your bank’s food coupon operations, and, in particular, anyone who prepares food coupon deposits; additional copies of this circular will be furnished upon request. Questions regarding any of the foregoing should be directed to the Food Coupon Section, Cash Division, of the Buffalo Branch (Tel. No. 716-849-5060). T M. T i m l e n , First Vice President. homas 3 j.
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