Full text of Federal Reserve Bank of New York Circulars : 9543. New Interterritory Return Item Procedures

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FEDERAL RESERVE BANK
OF NEW YORK

[

Circular No. 9543 "1
August 25, 1983
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NEW INTERTERRITORY RETURN ITEM PROCEDURES

To All Depository Institutions in the Second
Federal Reserve District, and Others Concerned:

In our Circular No. 9494, dated May 12, 1983, we advised depository institutions in this
District of the approval by the Board of Governors of the Federal Reserve System of procedures
designed to eliminate or price the remaining categories of Federal Reserve check float, as pre­
scribed by the Monetary Control Act of 1980. With regard to the Board’s action, institutions were
advised that Reserve Banks would revise the availability for interterritory return items, effective
August 1, 1983.
Enclosed is a copy of the Sixth Supplement to our Operating Circular No. 4, Revised effect­
ive November 13, 1980, reflecting appropriate changes to our agreements with respect to availa­
bility for return items, as required by the Board’s May 3 Order. Accordingly, credit for return
item cash letters deposited at the Head Office of this Bank, including our Cranford, Jericho, and
Utica Offices, and at our Buffalo Branch, are deferred for one day if in tra te rrito ry and
in te r te r r ito r y return items are deposited as a single return item cash letter. The one-day deferral of
credit on in tra te r r ito r y return items may be avoided by separately sorting all or some of those
items from in te r te r r ito r y returns.
Questions regarding these new return item procedures may be directed to the following:
At our Head Office

Donald R. Moore, Manager, Check Processing Department (Tel. No. 212-791-5346)
At our Cranford Office

Fred A. Denesevich, Regional Manager (Tel. No. 201-272-9000)
At our Jericho Office

Louis J. Brendel, Regional Manager (Tel. No. 516-997-4500)
At our Utica Office

Harry Curth, Regional Manager (Tel. No. 315-736-8321)
At our Buffalo Branch




David P. Schwarzmueller, Operations Officer (Tel. No. 716-849-5018)

A

nthony

M . Solom on,

P re s id e n t.

/

Federal Reserve Bank
of New York
Sixth Supplement to
Operating Circular No. 4

(Revised effective November 13, 1980)
Effective August 1, 1983

COLLECTION OF CASH ITEMS
Availability for Returned Items
To All Depository Institutions in the Second
Federal Reserve District, and Others Concerned:

Operating Circular No. 4 has been amended as follows:
1.
Paragraph B. 4. of Appendix D, entitled “Immediate Settlement
Agreement and Correspondent Authorization” is amended to read as follows:
B. Im mediate Settlem ent Agreem ent
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4 . (a) A ll unpaid cash item s returned by the p ay in g bank m ust be
a cco m p a n ied by a separate return item cash letter form for credit to the
p ayin g b a n k ’s, or its C o rresp on d en t’s, accou nt. T he p ayin g bank m ay sep a­
rately return interterritory and intraterritory return item s. T he p ayin g bank
m ay a lso return, w ith ou t entry, a cash item that it has paid hereunder, but
w h ich it has not returned w ith in the tim e lim its n ecessa ry to revok e a p rovi­
sio n a l settlem en t. T h is B ank han d les su ch an item under the term s o f its
operatin g circu lars. T he S eco n d Federal R eserve D istrict com prises: (1 ) the
territory serv ed by the H ead O ffic e o f this B an k , in clu d in g our C ranford,
J erich o, and U tica O ffices; and (2 ) the territory served b y our B u ffa lo
B ranch. A n intraterritory return item is an item to be returned by an o ffic e o f
R eserv e B ank to its send er lo ca ted anyw here in the sam e territory. A n item to
be returned anyw here e ls e is an interterritory return item .
(b )
Items returned to Head Office or to Cranford, Jericho, or
R eserv e B ank g iv e s credit on R eserve B a n k ’s n ext fo llo w in g ban k­
in g day for item s in a cash letter con tain in g o n ly intraterritory return item s, if
the item s are receiv ed prior to 12:00 m idnigh t o f a b an king day for R eserve
B ank . R eserv e B ank g iv e s credit on R eserve B a n k ’s seco n d banking day f o l­
lo w in g receip t for item s in a cash letter con tain in g any interterritory return
item s, i f the item s are r ec eiv e d prior to 12:00 m id n igh t o f a banking day for
R eserv e B ank . Item s in a cash letter con tain in g any interterritory return item s

Offices.

[Enc. Cir. No. 9543]




Utica

r eceiv ed at the H ead O ffic e on Friday prior to 12:00 n o o n , h o w ev e r, are c red ­
ited o n R eserve B a n k ’s n ext fo llo w in g ban king d ay.
(c )
Items returned to the Buffalo Branch. R eserv e B ank g iv e s credit
for item s in a cash letter c o n tain in g o n ly intraterritory return item s on the d ay
o f receipt if the item s are r ec eiv e d prior to 12:00 n oon o f a ban king day for
R eserv e B ank . R eserve B ank g iv e s credit for item s in a ca sh letter con tain in g
any interterritory return item s on R eserve B a n k ’s n ext fo llo w in g b an king day
if the item s are receiv ed prior to 12:00 noon o f a ban k in g d ay for R eserve
B ank .

2.
Appendix F, entitled “Manhattan, Bronx and Brooklyn (“MB&B”)
Collection Arrangement, ” is amended by revising paragraphs 4, 5 and 6 of the
Paying Bank Agreement to read as follows:
4 . Item s p resented to the p ayin g bank hereunder m ay be returned unpaid
o n ly i f they h ave b een sorted , p a ck aged , and listed as h ereinafter provided
and are returned to R eserve B ank w ith in the p eriod s p rescrib ed by this para­
graph.
(a) M issen t or in e lig ib le item s and dem and n o tes m ay be returned not
later than 12:00 m id n igh t o f the day o f presen tm en t, p rovid ed that as to
dem an d notes the p ayin g bank has ad vised R eserve B ank b y telep h on e not
later than 3:0 0 p .m . o f that d ay that su ch item s are to be returned.
(b) A cash item drawn b y the payin g bank on its e lf to R eserve B a n k ’s
order m ay be returned not later than 3 :00 p .m . o f the day o f p resen tm en t, or
not later than 12:00 m id n igh t if, in the latter e v en t, the p ay in g bank n o tifies
R eserv e B ank in w riting b y 3 :0 0 p .m ., or n o tifies R eserve B an k by telep h on e
at 3 :0 0 p .m . con firm ed in w ritin g by 5 :00 p .m . o f that d a y , o f its intention to
return the item .
(c ) A ll other unpaid cash item s m ay be returned not later than 12:00
m id n igh t o f the ban king day n ext fo llo w in g the d ay o f presentm en t. T he
p a y in g bank m ay also return a cash item to R eserv e B ank b y 12:00 m id n igh t
on the day o f presentm en t.
(d ) A n item o f $ 5 ,0 0 0 or o v er that w a s r ec eiv e d b y the p ayin g bank
from a N e w Y ork C learing H ou se bank and that is returned by the p ayin g
bank to R eserve B ank for e n d orsem en t (in clu d in g bank stam p ) sh all b e certi­
fied by the p ayin g bank pricr to its return.
5 . T h e p ayin g bank sh all return to R eserve B an k unpaid item s that the
R eserv e B ank receiv ed from (a) N e w Y ork C learin g H o u se b an k s, and (b) the
d ep o sitory institution s participating in the M B & B C o llec tio n A rran gem ent,
sorted , p ack aged , and listed and e n c lo sed in sea led e n v e lo p e s bearin g the
n am es o f the resp ectiv e d ep ository institutions from w h ic h R eserv e B ank
receiv ed the item s therein co n tain ed . A ll other unpaid return item s m ay be
returned in a sin g le return item cash letter, or in tw o return item cash letters
— o n e con tain in g o n ly intraterritory return item s and the oth er con tain in g all
other return item s. T h e S eco n d Federal R eserve D istrict com p rises: (1 ) the
territory served by the H ead O ffic e o f this B an k , in clu d in g our C ranford,
Jerich o, and U tica O ffic e s , and (2 ) the territory served b y our B u ffa lo
B ranch. A n intraterritory return item is an item to b e returned by an o ffic e o f
R eserv e B ank to its sen d er lo cated anyw here in the sam e territory. A n item to
be returned anyw here e ls e is an interterritory return item .




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6 . Item s not returned as p rovid ed in paragraph 4 sh all be d eem ed to be
fin a lly paid . For unpaid item s (and protest fe e s) returned as p rovided in para­
graph 4 , R eserv e B an k g iv e s credit on the appropriate b o o k s o f accou n t as
fo llo w s:
(a ) For an item co v er ed by paragraph 4 (b ), on the day o f its return to
R eserv e B ank provid ed it has b een returned not later than 3 :0 0 p .m .; su ch an
item returned after 3:0 0 p .m . is cred ited on the R eserv e B a n k ’s next fo llo w ­
in g ban k in g day.
(b ) For item s in a ca sh letter con tain in g o n ly intraterritory return
item s, o n the R eserve B a n k ’s ban k in g day n ext fo llo w in g the day R eserve
B ank r e c e iv e s the return item .
(c ) For item s in a cash letter con tain in g any interterritory return
item s, o n the R eserve B a n k ’s se c o n d banking day fo llo w in g the day R eserve
B ank r e c e iv e s the return item s. Interterritory return item s rec eiv e d o n Friday
prior to 1 2 :0 0 n o o n , h o w ev e r, are credited on R eserv e B a n k ’s n ext fo llo w in g
b an king day.

3.
Appendix G, entitled “Thrift Institution Collection Arrangement
(“TICA”),” is amended by revising paragraphs 4, 5 and 6 of the Paying Bank
Agreement to read as follows:
4 . Item s presented to the p a y in g bank hereunder m ay be returned unpaid
o n ly i f th ey have b een sorted , p ack aged , and listed as hereinafter p rovided
and are returned to R eserv e B ank w ith in the period s p rescribed b y this para­
graph.
(a) A m issen t or in e lig ib le item m ay be returned not later than 12:00
m id n igh t o f the day o f presentm en t.
(b ) A cash item draw n b y the payin g bank on its e lf to R eserve
B a n k ’s order m ay b e returned not later than 3 :00 p .m . o f the day o f
p resen tm en t, or not later than 12:00 m idnigh t if, in the latter e v en t, the
p a y in g bank n o tifies R eserve B ank in w riting b y 3 :0 0 p .m ., or n o tifies
R eserv e B ank by telep h on e at 3 :0 0 p .m . con firm ed in w ritin g b y 5 :0 0 p .m . o f
that d a y , o f its intention to return the item .
(c ) A ll other unpaid cash item s m ay be returned not later than 12:00
m id n igh t o f the ban king day n ex t fo llo w in g the day o f presentm ent. T he
p a y in g bank m ay also return a cash item to R eserve B ank b y 12:00 m idnigh t
on the d ay o f presentm en t.
(d) A n item o f $ 5 ,0 0 0 or o v er that w a s r ec eiv e d by the payin g bank
from a N e w Y ork C learing H ou se bank and that is returned by the p ayin g
bank to R eserv e B ank for en d orsem en t (in clu d in g bank stam p) shall b e certi­
fied b y the payin g bank prior to its return.
5 . T h e p a yin g bank sh all return to R eserve B ank unpaid item s that the
R eserv e B ank receiv ed from (a) N e w Y ork C learing H o u se b an ks, and (b) the
d ep o sito ry institution s participating in the T IC A C o llec tio n A rrangem ent,
sorted , p a ck a ged , and listed and e n c lo sed in sea led e n v e lo p es bearing the
n am es o f the resp ective d ep ository institutions from w h ich R eserve B ank
r eceiv ed the item s therein con tain ed . A ll other unpaid return item s m ay be
returned in a sin g le return item ca sh letter, or in tw o return item cash letters
— o n e co n ta in in g o n ly intraterritory return item s and the other con tain in g all
other return item s. T h e S e c o n d Federal R eserve D istrict com p rises: (1 ) the
territory serv ed b y the H ead O ffic e o f this B an k , in clu d in g our C ranford,




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Jerich o , and U tica O ffic e s , and (2 ) the territory served b y our B u ffa lo
B ranch. A n intraterritory return item is an item to be returned by an o ffic e o f
R eserv e B ank to its sen d er lo cated anyw here in the sam e territory. A n item to
be returned anyw here e ls e is an interterritory return item .
6.
Item s not returned as p rovid ed in paragraph 4 sh all be d eem ed to be
fin a lly paid. For unpaid item s (and protest fe e s) returned as p rovid ed in para­
graph 4 , R eserve B ank g iv e s credit on the appropriate b o o k s o f accou n t as
fo llo w s:
(a) For an item co v ered by paragraph 4 (b ), on the day o f its return to
R eserv e B ank provided it has b een returned not later than 3 :0 0 p m .; su ch an
item returned after 3 :0 0 p .m . is credited on the R eserve B a n k ’s n ext f o llo w ­
ing b an king day.
(b) For item s in a ca sh letter con tain in g o n ly intraterritory return
item s, o n the R eserve B a n k ’s b an king day n ext fo llo w in g the day R eserv e
B ank r ec eiv e s the return item .
(c) For item s in a cash letter con tain in g any interterritory return
item s, o n the R eserve B a n k ’s seco n d banking day fo llo w in g the day R eserv e
B ank r ec eiv e s the return item s for item s. Interterritory return item s receiv ed
o n Friday prior to 12:00 n o o n , h o w ev e r, are cred ited o n R eserv e B a n k ’s n ext
fo llo w in g ban king day.




A

nthony

M . Solom on,

P resident.

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