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F e d e r a l R e s e r v e Ba n k o f N ew Yo r k
N e w Y o r k , N. Y. 10045
A R E A C ODE 2 12-791-5000
*
% ¥ '/ '
February 24, 1984
To All Second District Depository Institutions?
The Board of Governors of the Federal Reserve
System has approved for implementation on April 23, 1984,
the second phase of its program to accelerate the
collection of checks known as the High Dollar Group Sort
program.
This program provides for significant
improvements in deposit deadlines for checks drawn on
certain institutions outside Federal Reserve cities. The
System anticipates that on an average daily basis,
approximately $1 billion of checks will be collected one
day earlier under this new progranio
It is also anticipated
that the total costs incurred by financial institutions in
collecting checks drawn on these points will be reduced.
In May 1983, the Board published for comment a
proposed set of criteria for selecting endpoints outside
Federal Reserve cities to be included in the program.
The
original criteria have been modified in response to the
comments received.
Under the approved program, initial
presentment points are those points to which the Federal
Reserve presents, on an average daily basis, $10 million or
more of checks from out-of-zone depositors.
(A presentment
point is defined to include all routing/transit numbers of
affiliated institutions presented to a common location.)
Presentment points with daily average out-of-zone
presentments of less than $10 million may be added on a
case-by-case basis if the Reserve Ba n k 's periodic analyses
indicate that clear net public benefits exist and if revenue
is expected to recover the cost of collection within three
months.
A presentment point may be dropped from the program
if it appears that the costs of its inclusion outweigh the
public benefits or if revenue does not recover the costs of
collection.
Further, if it appears that an institution has
established arrangements that circumvent the existing
selection criteria of the High Dollar Group Sort program,
any bank participating in such arrangements may be included
in the program.
2
FEDERAL RESERVE BANK OF NEW YORK.
We recognize that the High Dollar Group Sort
program must be responsive to changes in disbursement and
presentment patterns in order to continue to fulfill its
objectives., Therefore, the Reserve Banks will regularly
review daily average presentments to determine whether to
add or delete presentment points„ In their analyses,
Reserve Banks also will consider information received from
financial institutions regarding changes in disbursement
patterns which could affect the points included in the
program.
We are attaching a copy of the Board's Press
Release on the High Dollar Group Sort program, a list of
initial presentment points included in the program, as well
as associated Reserve Bank fees and deposit deadlines. To
permit these institutions to continue to offer efficient
cash management services, Reserve Banks will make available
account total information on a timely basis„ As a System
policy no Reserve Bank office will provide account total
information for High Dollar Group Sort items earlier than
9s30 a.m. Eastern time or later than llsOO a„m0 local time,
including notification of all rejects greater than $50,000 „
This Bank provides state-of-the-art payor bank services
necessary for providing timely cash management programs to
customers of Second District depository institutionsQ These
services include account total, MICR line capture, and
account level sorting services„ We expect to issue a
Services Bulletin on our recently expanded payor bank
services soon.
In addition, the Board of Governors has issued a
policy statement concerning delayed disbursement practices,
which is attached„
Questions regarding the High Dollar Group Sort
program may be directed to James O. Aston, Vice President of
our Check Processing Operations at (212) 791-6334 or
Whitney R„ Irwin, Senior Bank Services Officer at (212)
791-6812 at our Head Office or to Robert J„ McDonnell,
Operations Officer at (716) 849-5022 at our Buffalo Branch*
Henry S. Fujarski
Senior Vice President
Attachments
•iiSs
FEDERAL RESERVE press release
RE'
(y U l
For
im m e d ia te
F e b r u a r y 22,
re le a se
The F e d e r a l
d e p o sito ry
to
D e ce m b er
the
1982,.
In
the
and a l a t e r
phase
of
in
De ce m b er
of
th e
cost
1982,
checks.
Federal
c a lle d
of
tim e
fo r
become e f f e c t i v e
c o lle c tin g
The s e l e c t i o n
of
phase p r o v id e d f o r
d isp a tc h
checks
tim e
o ffic e s
for
(c ity
changes
in
drawn on c e r t a i n
c itie s
(n o n -c ity
Group S o r t
23,
in
the program
a c c e le ra te
d e p o sit
d e a d lin e s
c h e c k s d raw n on i n s t i t u t i o n s
in stitu tio n s).
d e p o sit
d e a d lin e s
d e p o sito ry
and p re
in stitu tio n s
in stitu tio n s ).
T h is
The p u r p o s e
in stitu tio n s
Th e s e c o n d
as w e ll
phase
as
c r ite r ia
fo r
the H ig h D o l l a r
Group S o r t
p ro v id e
o
presentm ent p o in t s w ith d a i l y a v e ra ge o u t - o f - z o n e
p r e s e n t m e n t s l e s s t h a n $10 m i l l i o n may b e a d d e d t o
t h e p r o g r a m on a c a s e - b y - c a s e b a s i s w h e re c o s t j u s t i f i e d .
appears
t h e HDGS o u t w e i g h
that
the
costs
of any p resen tm e n t
the p u b l i c b e n e f i t s ,
The B o a r d ’ s n o t i c e
is
it
p o i n t ’s
th at:
in c lu sio n
in
may b e d r o p p e d f r o m t h e p r o g r a m .
attach ed .
_______________________________________________________________
-
0
-
l_/ A g r o u p s o r t i s a s e r v i c e e n a b l i n g a c o l l e c t i n g b a n k t o d e p o s i t c h e c k s drawn
on a l i m i t e d ,
p re se le c te d
group
of payor
in stitu tio n s.
the
to
to reduce
checks.
a l l presen tm ent p o i n t s w it h d a i l y a v e rage o u t - o f - z o n e
p r e s e n t m e n t s f r o m t h e F e d e r a l R e s e r v e o f $10 m i l l i o n
o r more w i l l be i n i t i a l l y i n c l u d e d .
it
of
o f HDGS i s
o
If
c e rta in
1984.
la te r
(H D G S ) £ / .
c h e c k s drawn on s u c h
these
A p ril
c itie s
adopte d a tw o -p h a se d p ro gram to
a d d itio n a l
the H ig h D o l l a r
c o lle c tio n
in c lu d in g
a d o p te d by th e B o a r d i n
t h a t was
Reserve
Reserve
for
checks
Th e f i r s t
for
c r ite r ia
Reserve
the B o a rd
w ith F e d e ral
program c a l l s
o u tsid e
s p e e d up t h e
the
of
approved
1984
o u tsid e Federal
u n ifo rm p resen tm ent or
c itie s
program i s
lo c a te d
c o lle c tio n
sentm ent or d is p a t c h
lo c a te d
Board has
The new c r i t e r i a
c o lle c tio n
lo c a te d
Reserve
in stitu tio n s
a c c e le ra te
'
FEDERAL RESERVE SYSTEM
(Docket Noo R-0464)
F E D ER A L R E SE RVE BANK CHECK C O L L E C T I O N S E R V I C E S
AGENCY §
Board of Governors of the Federal Reserve System,.
ACTION?
Approval
institutions
of
criteria
for
including
depository
in a program to accelerate the collection of
check s 0
SUMMARY?
The Board has approved the selection criteria for
including depository institutions located outside of Federal
Reserve office cities
collection of checkSo
in
the program
to
accelerate
the
This program was adopted by the Board in
December 1982„
EFFECTIVE DATE?
April 23, 1984,
FOR FURTHER INFORMATION CONTACT:
Elliott C Q McEntee, Associate
Director (202/452-2231), or John F„ Sobala, Assistant Director
(202/452-2738),
Division of Federal Reserve Bank Operations;
Gilbert T„ Schwartz, Associate General Counsel (202/452-3625),
or
Elaine
Division,
M„
Boutilier,
Attorney
(202/452-2418),
Legal
Board of Governors of the Federal Reserve System,
Washington, D oc o 20551„
SUPPLEMENTARY INFORMATION?
Background„
In December 1982, the
Board adopted a program to accelerate the collection of checks
and thereby improve the efficiency of the payments mechanism,,
48 FoRo 79 (January 3, 1983)0
The first phase of the program,
initiated in February and completed in May 1983, provided for
-2“
later deposit deadlines and a later uniform presentment or
dispatch time for checks drawn on institutions
located
in
cities with Federal Reserve offices ("city institutions")„
In
connection with this phase, later deposit deadlines were also
implemented to improve the credit availability for checks drawn
on institutions located in areas outside of cities with Federal
Reserve offices ("non-city institutions")„
As a result of the
first phase of the program to accelerate the collection of
checks,
checks
with
a
total
daily
average
value
of
approximately &2 billion are now being collected
one day
earlier than they were being collected previously,,
The second
phase of the Board's program, called the High Dollar Group Sort
("HDGS"),— ^
provides
for
additional
changes
in
deposit
deadlines and presentment or dispatch time for checks drawn on
certain non-city institutions,,
On May 2,
1983,
the Board
published for public comment proposed criteria for selecting
non-city institutions for inclusion in HDGS.
(May 5, 1983).
48 F.R.
20283
The primary purpose of the HDGS is to speed up
by one day the collection of checks drawn on certain noncity
institutions,,
It is anticipated that an additional $1 billion
of checks could be collected one day earlier than they are now
collected by implementing the HDGS«
i/ A group sort is a service enabling a collecting bank to
deposit checks drawn on a limited, preselected group of payor
institutions*
-3-
The proposed criteria for the HDGS were designed to
encompass in a flexible and efficient way only those payor
institutions whose inclusion would
benefits to society,,
result
in positive net
The Board believed that any criteria for
selecting non-city institutions
for
inclusion
should serve the following objectives?
service to collecting
institution*
in the HDGS
(1) the value of the
»n.1.?
•y , ..
,7
.• >st
incurred in providing the service;
(2) the total benefits from
accelerated collection
gerater
should be
than
the
costs,
including the costs to payor institutions and their customers;
and (3) sufficient flexibility should be provided to Reserve
Banks to enable them to respond in a timely fashion to changing
disbursement patterns.
Given these objectives,
the Board requested public
comment on the following selection criteria;
Initially include all non-city institutions
in the HDGS program whose daily average
presentments by the Federal Reserve amount
to $20 million or more.
Select additional non-city institutions with
daily average presentments from the Federal
Reserve less than $20 million for inclusion
in the program based on criteria such as,
average check size, or the number of large
dollar checks, or analyses of requests
received from depository institutions.
In addition,
the public was requested
to suggest
alternatives to the proposed selection criteria and to comment
on methods for administering the overall program.
Analysis of Comments -- A total of 188 comments were
received on the proposed selection criteria.
A majority of the
-4-
commenters (117) expressed concern about the program in general
and did
not
specifically
discuss
the
proposed
selection
criteria as requestedo
Eighty-two of these comments were from
corporations
cash
that
use
management
virtually identical in content.
services
and
were
The principal issues raised in
response to certain aspects of the HDGS program related to its
potential impact on cash management services,
its impact on
competitive equity among those depository institutions offering
cash management services, and its cost-effectiveness.
Of the 77 respondents commenting on the selection
criteria,
nearly half
supported
the
proposal
to
include
initially all institutions with daily average presentments of
&20 million or more.
the
selection
Thirty commenters favored one or more of
criteria
proposed
for
including
additional
institutions, while thirty-one commenters favored limiting the
program to the initial group of institutions.
Requests from
depository institutions was considered the best of the criteria
proposed for adding institutions to the HDGS.
commenters
offered
alternatives
to
Only a few
the proposed
selection
criteria.
Competitive Impact -- Fifty-eight commenters suggested
that
the HDGS
could
create
depository institutions.
competitive
inequities
among
Some commenters believed that the
proposed selection criteria were arbitrary and would create
competitive
included
inequities between
those non-city
in the HDGS and those excluded.
institutions
Commenters also
-5 "
maintained that with respect to institutions included in the
HDGS,
deposit deadline and price variations among
Federal
Reserve offices would give a competitive advantage to those
institutions located in areas with earlier deposit deadlines or
higher prices,,
territories with
Depository
the higher
institutions
in Reserve office
fees would have an advantage
because demand for the service would be lower.
Similarly/
institutions offering cash management services located in areas
with
earlier
deposit
deadlines
would
have
a
competitive
advantage over institutions offering similar services located
in areas with later deposit deadlines since they would be
receiving their HDGS checks or account information earlier.
The Federal Reserve does not believe that the proposed
selection criteria were arbitrary.
The criterion for including
all institutions with daily average presentments by the Federal
Reserve of $20 million or more was designed to encompass a
manageable number of
institutions while at
the same time
increasing the funds availability for a significant
value of checks.
dollar
Analysis of the concern that the $20 million
cut-off was inappropriate indicated,
however,
that in some
situations this criterion would include institutions for which
there would not be a corresponding gain in improved check
collection.
Such instances arise when the preponderance of
checks presented by the Federal Reserve to an institution are
received from local depositors.
The HDGS would not improve the
availability of funds for these checks.
Consequently,
the
-6-
Board believes it appropriate to modify this criterion to not
cover these circumstances^
In doing so, however, it is clear
that significant benefits could be achieved by lowering the
cut-off pointc
Adjusting the criterion to include institutions
/ by the Federal
with daily average out-of-zone presentments—2 7
Reserve of $10 million or more would provide significant gains
in availability of funds without excessive cost.
With
regard
to
variations
among
offices of HDGS deposit deadlines, such
Federal
Reserve
variations exist for
nearly all deposit options offered by Reserve officesD
deadlines vary as a result of volume differences,
geographic
area
served
and
number
of
particular Reserve office's territory.
consistent with
size of
institutions
in
a
The HDGS deadlines are
existing patterns and variations
deadlines among Reserve offices.
Deposit
in other
In some instances, there is a
reduction in the range of variation.
Further,
in order to
avoid expensive air transportation, some Reserve Banks proposed
earlier deposit deadlines that enable them to use lower cost
ground transportation for the presentment of HDGS checks.
HDGS fee variations are the direct result of Reserve
offices explicitly setting fees to recover the costs of
An out-of-zone presentment is composed of items which
originate for collection at an institution located outside the
local Reserve office territory of the payor institution.
2/
-7 -
accelerating collection of checks drawn on HDGS institutions in
their respective territories.,
equipment costs,
These costs include labor and
direct transportation costs associated with
the HDGS presentment, and the potential float that may result
from the necessity of processing
shortened timeframes.
of
these
costs
large dollar
checks
in
There are significant variations in each
among
Reserve
offices,
particularly
transportation costs, which contribute to the variations in the
fees.
Therefore, pricing uniformity would not be appropriate.
Once experience is gained and volume and deposit information is
more certain, prices will be reviewed and may be adjusted as
appropriate to reflect market conditions.
Some commenters stated their belief that the Federal
Reserve has a competitive advantage due to its exemption from
presentment fees and its ability to set the time and manner of
presentment.
These same issues were raised when the program
. .
was originally
adopted by the Board m
Board has
carefully
evaluated
December 19820—3/
these comments.
believes that the HDGS does not represent
The
The Board
an exercise of
regulatory authority and does not result in a competitive
advantage for Reserve Banks.
The move to later presentment
represents the exercise of the same rights that all presenting
banks possess under the Uniform Commercial Code.,
—/
See 48 F 0R0 79 (January 3, 1983)0
With regard
-8-
to the issue of presentment fees, the Federal Reserve Act (12
U.SoC0 § 342) prohibits the imposition of such fees on Reserve
BankSo
In any event,
there is a question as to whether a
paying bank is performing a service for which a fee may be
assessed when it pays checks drawn on it in the ordinary course
of businesso
In addition, the Board does not believe that the
ability to charge an institution's account at the Reserve Bank
represents
a
significant
advantage
since
correspondent
relationships between depository institutions may also provide
for such arrangements.
It should be noted that this program
should not result in any increase in Federal Reserve volume.
Rather, it will result in an acceleration of the checks already
being collected by the Federal Reserve.
Impact on Cash Management Services -- Concern was
expressed by 105 commenters that later presentment of checks
would disrupt the ability of institutions to offer effective
cash management services to corporations
timing of
their
information
used
investment
in
making
decisions
those
and
in two ways;
the
the quality of
investment
decisions.
Currently, many non-city institutions offering these services
are able
to provide
final
account
total
information
to
corporate customers by mid-morning, thus allowing corporations
to participate in the money market in the morning.
With later
presentment under the HDGS, the commenters stated that those
institutions included in the HDGS will be unable to provide
complete account total information sufficiently early in the
day to meet their corporate customers' needs.
-9 -
Commenters also argued
that
the payor bank
services
being offered by the Reserve Banks to minimize the impact of
later
presentment
are
inadequate..
The
commenters
that customer account total information,
indicated
in order to be useful,
must be available by mid-morning and include fine-sort deposits
and checks
stream.
that have been rejected
in
the normal
processing
Concern was also expressed by some commenters over the
wide variation in the quality of payor bank services offered by
Reserve
offices.
Reserve
offices
The
offer
commenters
payor
stated
bank
that
because
some
information
earlier
than
others or in a form more readily usable,
Reserve office
territories
may have
institutions in those
a competitive
advantage
over institutions in other Reserve office territories.
A change
in the
could cause some delays
timing
of check presentment
in depository
institutions
account total information to corporate customers.
policy
providing
These delays
may result in cash managers executing some trades in afternoon
markets.
affect
However,
only
a
the necessity to shift trading times should
small
proportion
of
corporate
investments.
Currently, a large percentage of investment decisions are based
on estimates of daily clearings.
Changes in presentment times
should not detrimentally affect
the trading
that
undertaken before final account
totals are known.
is already
Therefore,
the actual amount of trading shifted to later in the day should
only be a small fraction of average daily clearings and this
effect
program.
is
significantly
outweighed
by
the benefits
of
the
-1 0 -
The impact of later presentment can be significantlyminimized through the Reserve offices'
services,
provided
that
the
provision of payor bank
information
is
accurate and delivered on a timely basis,
differences
in
time-zones.
In view of
sufficiently
taking into account
the need
to provide
account total information on a timely basis, all
Reserve Banks will provide account total information no earlier
than 9:30 a.m.
time.
Also
greater than
eastern time and no later than 11:00 a.m.
included
is
£50,000 and
notification
of
all
reject
items
fine-sort deposits at those offices
where only one institution is in the HDGS.
Delivery of payor
bank information by telecommunications will be provided,
request,
cannot
if physical
be
delivery
accomplished
local
by
of
the
account
11:00
total
a.m.
upon
information
deadline.
These
procedures should also mitigate any perceived equity concerns
over nonuniform deposit deadlines at Reserve offices.
Cost-Effectiveness
of
the
HDGS
--
Thirty-five
commenters suggested that the HDGS would not be cost-effective
for three principal reasons.
First,
use of the HDGS would be
minimal since the value of improved availability would not be
greater than the costs of collection to individual collecting
institutions.
Therefore,
recover costs.
revenue
would
be
insufficient
to
Second, disbursement patterns would change as
institutions and corporations attempt to circumvent the program
and,
consequently,
extremely costly
administration
if not
of
impossible.
the
program
Third,
would
the program
be
is
-1 1 -
redundant because of other recent measures undertaken by the
Federal Reserve to reduce float»
The costs and benefits of the HDGS have been analyzed
for each participant!
the collecting bank,
the Federal Reserve.
benefits of about
the payor bank, and
The HDGS has the potential to convey net
$128 million annually to collecting banks.
This is composed of $111 million in increased earnings due to
improved availability and $17 million in lower net collection
costs.
These benefits should provide adequate
collecting
HDGS,
it
institutions
is
estimated
to use
that
the
the
HDGS.
Federal
and
To
implement
Reserve
annual processing costs of $11.7 million,
of $2.7 million,
incentives
will
to the Federal
the
incur
transportation costs
float costs of $1.4 million.
projected annual costs
for
Reserve,
Of these
less
than
$5
million are incremental costs.
The program results
$23 million.
in net public benefits of about
This calculation takes into account the benefits
and costs to all participants,
including approximately $604.4
million in the value of lost float
approximately $1
This
estimate
disbursement
million
does
not
patterns
yields
consider
potential
that
might
For example,
resulting
from the HDGS program,
to move
occur
to
in
cash
managers.
changes
response
in
to
the
in light of the reduced float advantage
corporate cash managers may
their disbursement
located in less remote locations,
institutions and
in lower
program.
decide
to payor
accounts
to
institutions
thereby reducing collection
-1 2 -
costs.
On the other hand,
flexible
to
adjust
to
if the program is not sufficiently
changes
in
disbursement
patterns,
additional costs may be incurred as disbursements are shifted
to
more
remote
institutions
selection criteria.
in
order
to
circumvent
the
The selection criteria and administrative
procedures should provide the level of responsiveness needed to
ensure the program's success.
With regard to the comments that the HDGS is redundant
in view of recent measures undertaken
to reduce float,
these
recent actions involved the elimination only of Federal Reserve
float.
The HDGS,
on
the other hand,
by accelerating
check
collection addresses float generated in the payments mechanism
in general.
indicated
For example,
that
approximately
commercial
$58
billion
a recent survey of total check float
bank
per
float
day.
nationwide
The
HDGS
amounted
addresses
to
a
portion of this non-Federal Reserve check float by providing a
mechanism to increase the efficiency of the payments mechanism.
Board Action -- The Board believes that the selection
criteria,
as modified
raised by commenters,
HDGS.
in response to analysis
of
the issues
maximize the net social benefits of the
The Board has therefore approved the following specific
criteria for including non-city depository institutions in the
HDGS s
A.
All presentment points with daily average out-of-zone
presentments
from the Federal Reserve of
&10 million
-1 3 -
or more will be initially included.
point
is
numbers
defined
of
to
include
affiliated
common location,,
all
(A presentment
routing/transit
institutions
presented
Presentment points
located
to
a
outside
of the 48 contiguous states will be excluded.)
Be
Presentment
points
with
daily
average
out-of-zone
presentments less than $10 million may be added to the
program
Bank's
on
a case-by-case
periodic
public benefits
where
revenue
basis
analyses
indicate
of accelerated
is
where
expected
to
the
that
clear
collection
recover
Reserve
the
net
exist
cost
and
of
collection within three months.
Co
Any presentment point may be dropped
from the program
if it appears that the costs of its inclusion outweigh
the public benefits or where revenue does not recover
the costs of collection.
If it appears that depository institutions are participating in
arrangements to circumvent the HDGS,
included
in
the
program,
although
these institutions may be
they
may
not
meet
the
specific tests for inclusion in the HDGS0
The
Reserve
Banks
will
notify
the
individual
institutions in their Districts that are to be included in the
HDGS
and
will
announce
the
HDGS
presentment
procedures to all depository institutions
Reserve
Banks
will
also
consider
points
and
in their Districts,,
requests
from
depository
-1 4 -
institutions
regarding
presentment
points
that
Governors
of
should
be
considered for inclusion in the HDGSo
By Order of
the
Board
of
the
Federal
Reserve System# February 21, 1984.
(signed) William W. Wiles
William W. Wiles
Secretary of the Board
HIGH DOLLAR GROUP SORT (HDGS) PRESENTMENT POINTS
HIGH DOLLAR GROUP SORT (HDGS) PRESENTMENT POINTS
First Federal Reserve District
Office
Presentment Point
Institutions
Transit
lumbers
Boston
Bank of Boston°Bristol
Bank of Boston-Brfstol
01130142
BayBank Norfolk County
Trust COo
BayBank Norfolk County
Trust Co.
BayBank Harvard Trust Co.
BayBank MerrimackValley
BayBank Middlesex
BayBank N 0A.
Additional Transit Numbers
Fleet National Bank
Fleet National Bank
Additional Transit Numbers
01150001
01150059
01150080
01150090
01150100
01150108
01150128
01150131
Rhode Island Hospital
Trust m
Rhode Island Hospital
Trust NB
Additional Transit Numbers
01150033
01130243
01130060
01130164
01130235
01130203
01130033
01130068
01130084
01130127
01130187
01130209
01130228
01130239
01130240
01130355
01130398
01130609
01130663
01130664
01130665
01130666
01130667
01130668
01130669
01130670
01130685
01130688
01150052
01150070
01150077
F irs t Federal Reserve D is tric t
Office
Presentment Point
Institutions
Boston
Shaymut Worcester County
ShaMmut Worcester County
Bank
Additional Transit timbers
( e @ n t 8d)
Windsor Locks
Bank
Union National Bank-to^ell
Union National Bank-Lowell
Additional Transit Numbers
Bank of Boston-Western
Bank of Boston-Western
Mass
Bank of Boston-Berkshire
Bank of Boston-Franklin
Additional Transit Numbers
Mass
Transit
lumbers
01130001
01130191
01130319
01130350
01130455
01130623
01130045
01130546
01130566
01130596
01180137
01180228
01180557
01180119
01180132
01180558
Colonial Bank-Waterbury
Colonial Bank-Waterbury
Additional Transit Numbers
01110080
01110007
01110017
01110023
01110076
01110103
01110141
01110183
01110223
01110242
01110252
01110283
01110370
01190151
01190366
02110392
Connecticut Bank
Connecticut Bank <1 Trust
Additional Transit Numbers
01190057
01110155
01110216
01110272
01190008
01190045
01190097
01190100
01190116
01190131
&
Trust
First Federal Reserve District
Office
Presentment Point
kindsor Locks
(cont8d)
Institutions
Connecticut Bank & Trust
(cont'd)
Additonal Transit Numbers
Transit
Numbers
011901 57
01190167
01190173
01190180
01190193
01190198
01190201
01190220
01190247
01190253
01190270
01190288
01190296
01190329
01190332
01190338
01190345
01190356
01190360
01190362
01190363
02110123
02110208
02110212
Connecticut National Bank
Connecticut National Bank
Additional Transit Numbers
01190044
01110259
01190025
01190047
01190113
01190117
01190135
01190140
01190165
01190214
01190222
01190256
01190299
01190305
01190322
01190331
01190355
01190367
01190368
01190369
01190374
02110032
First Federal Reserve District
Office
Presentment Point
Windsor Locks
(cont8d)
Institutions
Connecticut National Bank
(eont'd)
Additional Transit lumbers
O O
O O
Union Trust COo-Stamford
Additional Transit lumbers
02110082
02110104
02110188
02110291
02110349
02110353
02110358
02110361
CM F—
o o
Union Trust Coe-Stamford
Transit
lumbers
02110125
02110137
02110148
02110149
02110179
02110206
02110240
02110246
02110294
02110298
02110317
02110321
02110395
Lewiston
Bank of ^aines
Augusta
Bank of Maine9 M 0A 0“
Augusta
Additional Transit lumbers
01120057
01120056
01120105
01120107
01120108
Second Federal Reserve District
Office
Presentment Point
Institutions
Transit
lumbers
Buffalo
Citibank (MYS)-Buffalo
Citibank (NYS)-Buffalo
Additional Transit Hmtber
02200086
02231042
Lincoln First SankRochester
Lincoln First BankRochester
Additional Transit Humber
02230017
02230126
Manufacturers HanoverRochester
Manufacturers HanoverRochester
02230936
Bank of Hew York-County
Trust Region
Bank of
Trust
Bank of
Mhite
Bank of
White
Jericho
Cranford
Hew York-County
Region
Hew YorkPlains
Hew YorkPlains
02190235
02190244
02190828
Chase Manhattan lankArthursburg and Conroe
Chase Manhattan BankArthursburg and Monroe
02190947
Lincoln First BankHew Rochelle
Lincoln First BankHew Rochelle
Additional Transit Humber
021901 57
02190798
Long Island Trust Co0Carden City
Long Island Trust Co38arden City
02141063
Federal Home Loan Bank
of Hew York-Cranford
Federal Home Loan Bank
of Hew York-Cranford
02120639
Fidelity Union Bank-Hewark
Fidelity Union Bank-Hewark
Fidelity Union Bank,, H,A„Morristown
02120009
First Jersey national Bank
First Jersey national Bank
02120033
first national State BankHewark
First national State BankHewark
First national State BankCounty-Tenafly
Additional Transit Humber
Hid!antic National BankHewark
United Jersey BankHackensack
02120357
02120002
02120217
02120103
Midi antic national lankHewark
Midi antic National BankCranbury
Midi antic national lankSussex 1 Merchants
Additional Transit Humber
02120386
United Jersey BankHackensack
United Jersey Bank-Mid State
United Jersey Bank-Horthwest
02120216
02120339
02120264
02120001
02120329
02120316
Second Federal Reserve D is tric t
Office
Presentment Point
Institutions
Transit
Numbers
Utica
Chase Manhattan BankSyracuse
Chase Manhattan BankSyracuse
02130937
Chemical Bank-Syracuse
Chemical Bank-Syracuse
02130943
Citibank (NYS) M.A.-Troy
Citibank (NYS) NoAo-Troy
02130682
Irving Bank Corp-Syracuse
Irving Bank Corp-Syracuse
Endicott Trust Co0-Endicott
First M OB 0-Hancock
First N.B0-Moravia
Hayes M„B0-C1inton
Merchants National BankSyracuse
02131003
02130752
02130593
02130697
02130033
Key Bank9 iO„-Albany
Key Bank9 N 0A S-Albany
Additional Transit Numbers
Key Bank of Central
Mew York-Syracuse
Key Bank of Central
New York-Syracuse
02130038
Manufacturers Hanover-latham
Manufacturers Hanover-Latham
02130145
Marine Midi and-Syracuse
Marine Midi and-Syracuse
02130042
State Bank of Albany
State Bank of Albany
Additional Transit Numbers
02130001
02130056
02130057
02130007
02130063
02130066
02130067
02130068
02130070
Third Federal Reserve District
Office
Presentment Point
Institutions
Transit
Numbers
Philadelphia
Citibank (DE)-Newcastle
Citibank (DE)—Newcastle
03110020
Sirard Bank-Del aware
Girard Bank-Del aware
03110004
Hamilton Bank-Lancaster
Hamilton Bank-lancaster
Additional Transit Numbers
03130154
03130279
03130888
Morgan Bank-Wilmington
Morgan Bank-Mil mington
03110023
Philadelphia National BankChester
Philadelphia National BankChester
03190156
Fourth Federal Reserve D is tric t
Transit
Numbers
Office
Presentment Point
Institutions
Cleveland
Ameritrust of Northeastern
Ohio
A m e n trust of Northeastern
Ohio
Additional Transit Number
Bank One of Akron
Bank One of Akron
Additional Transit Numbers
04120066
04120555
First National Bank of
Ashland-Ohio
First National Bank of
Ashland-Ohio
04120389
Bank One-Dayton
Bank One-Dayton
04220030
First Bank and TrustAshland* KY
First Bank and TrustAsh] and* KY
04210080
First National Bank of SW
Ohio
First National Bank of SW
Ohio
Additional Transit Number
04220091
04220226
First Security National Bank
First Security National Bank
Additional Transit Number
04210002
04210009
Third National Bank-Dayton
Third National Bank-Dayton
Additional Transit Numbers
04220029
04220314
04221162
04221234
04230432
04230544
04231308
Mellon Bank N 0A 0°Pittsburgh
M l on Bank N 0A„-Pitt$burgh
04330160
Pittsburgh National BankJeannette
Pittsburgh National BankJeannette
04330162
Banc Ohio
lane Ohio
04410304
Huntington National BankWashing ton
Huntington National BankWashingtort
04420366
Huntington National BankWesterville
Huntington National BankWestern0H e
04411512
Cincinnati
*
Pittsburgh
Columbus
04120170
04120328
04120591
Fifth Federal Reserve District
Office
Presentment Point
Institutions
Transit
lumbers
Richmond
Bank of Virginia
Bank of Virginia
05140589
Dominion National BankRichmond
Dominion National BankRichmond
Additional Transit Numbers
Sovran Bank9 N oA 0 - Norfolk
Sovran 8anks N.A. - Norfolk
Additional Transit Numbers
05140054
05140066
05140132
05140140
05140156
05140161
05140176
05140182
05140185
05140189
05140197
05140233
05140245
05140260
05140329
05140352
05140387
05140389
05140415
05140422
05140435
05140467
05140487
05140500
05140542
05140558
05140618
05140624
05140715
05140755
05140765
05140036
05140124
05140147
05140187
05140192
05140199
05140234
05140273
05140286
05140327
05140392
05140417
05140609
05140692
Fifth Federal Reserve District
Office
Presentment Point
Institutions
Transit
lumbers
Richmond
(cont5d)
Sovran Bank, N 0A 0 Roanoke
Sovran Bank, N 0A 0 Roanoke
Additional Transit Number
05140064
05140713
United Virginia BankRichmond
United Virginia BankRichmond
Additional Transit lumbers
American Security BankWashington
American Security BankWashington
05400055
Bank of Del mar
Bank of Belmar
05210306
Maryland National BankCollege Parka SO
Maryland National BankCollege Park, MD
Additional Transit Number
05500327
05500302
Riggs National BankWashington
Riggs National BankUashington
05400003
United National BankWashington
United National BankWashington
05400150
Baltimore
05140186
05140034
05140091
05140123
05140193
05140303
05140382
05140402
05140412
05140566
05140704
Fifth Federal Reserve District
Office
Presentment Point
Institotions
Charlotte
Branch Banking 1 Tryst
C©0 - H i Ison
Branch Banking & Tryst
COo = Hi Ison
Additional Transit numbers
Transit
lumbers
05310112
05310105
05310106
05310129
05310169
05310171
05310175
05310185
05310227
05310244
05310261
05310275
05310285
05310349
05310355
05310357
05310367
05310392
05310399
05310443
05310577
05310767
05310768
05310816
05310820
05310823
05310832
05310911
05310924
05310941
05310968
05310972
05310975
05310976
05310990
05310993
05311014
05311019
05311039
05311051
05311053
05311075
05311077
05311092
05311125
08311126
05311149
05311155
F ifth Federal Reserve D is tric t
Office
Presentment Point
Chariotte
Ccont!d)
First Citizens Bank
Trust-Charlotte
In s titu tio n s
&
First Citizens Bank 1
Trust-Chariotte
Additional Transit lumbers
Transit
lumbers
05310589
05310013
05310030
05310110
05310113
05310128
05310131
05310155
05310160
05310190
05310200
05310202
05310221
05310223
05310249
05310250
05310286
05310288
05310290
05310317
05310318
05310321
05310322
05310334
05310356
05310362
05310365
05310375
05310376
05310377
05310386
05310401
05310404
05310405
05310406
05310429
05310432
05310435
05310436
05310437
05310438
05310546
05310644
05310652
05310819
05310831
05310833
05310841
05310870
05310893
05310894
05310896
05310897
Fifth Federal Reserve District
Office
Presentment Point
First Citizens Bank &
Trust-Charlotte (corst8d)
Additional Transit Numbers
Charlotte
(cont'd)
Institutions
First Union National BankGastonia
First Union National lankGastonia
Additional Transit Numbers
Transit
Numbers
05310902
05310903
05310904
05310922
05310926
05310931
05310942
05310945
05310946
05310963
05310971
05310979
05310998
05310999
05311002
05311013
05311017
05311045
05311060
05311062
05311068
05311076
05311078
05311079
05311080
05311106
05311107
05311108
05311113
05311127
05311128
05311129
05311130
05311143
05310127
05310090
05310143
05310156
05310166
05310201
05310210
05310224
05310228
05310276
05310294
05310311
05310327
F ifth Federal Reserve D is tric t
Office
Presentment Point
First Union national BankGastonia (cent8d)
Additonal Transit lumbers
Charlotte
(coot5d)
In s titu tio n s
First Union National BankRaleigh
First Union National BankRaleigh
Additional Transit Numbers
Transit
lumbers
05310336
05310452
05310514
05310611
05310616
05310765
05310872
05310925
05310969
05311005
05311030
05311088
05311118
05311145
05311040
05310078
05310111
05310182
05310183
05310230
05310232
05310254
05310255
05310266
05310272
05310280
05310361
05310424
05310439
05310468
05310520
05310547
05310742
05310796
05310813
05310834
05310858
05310892
05310898
05310918
05310932
05310940
05310961
05310965
05311032
05311034
05311035
05311049
05311054
05311073
05311119
Fifth Federal Reserve District
Office
Presentment Point
Institutions
Charlotte
(cont'd)
North Carolina National
Bank - Greensboro
North Carolina National
Bank - Greensboro
Additional Trar§sit A m b e r s
Transi t
lumbers
05310055
05310052
05310069
05310101
05310102
05310139
05310159
05310164
05310173
05310176
05310186
05310209
05310215
05310240
05310263
05310270
05310307
05310341
05310343
05310408
05310447
05310471
05310561
05310669
05310798
05310818
05310866
05310920
05310943
05310954
05310994
05311012
05311072
05311109
05311132
'Fifth Federal Reserve District
Office
Presentment Point
Institutions
Charlotte
(cont'd)
Worth Carolina National
Bank - Raleigh
Worth Carolina National
Bank - Raleigh
Additional Transit lumbers
Transit
Numbers
05310025
05310002
05310040
05310055
05310117
05310119
05310122
05310123
05310125
05310141
05310144
05310145
05310150
05310153
05310206
05310213
05310229
05310246
05310265
05310267
05310274
05310287
05310292
05310308
05310374
05310396
05310400
05310409
05310413
05310434
05310474
05310899
05310950
05310977
05310988
05311004
05311038
05311048
05311070
05311084
05311085
05311086
05311093
05311115
I
Fifth Federal Reserve District
Office
Presentment Point
Institutions
Charlotte
Ccont'd)
Northwestern BankNo Milkesboro
Northwestern BankNo Wilkesboro
Additional Transit Numbers
Transit
Numbers
05310216
05310091
05310116
05310124
05310135
05310140
05310163
05310194
05310199
05310214
05310243
05310245
05310253
05310260
05310264
05310284
05310298
05310306
05310313
05310316
05310320
05310324
05310329
05310330
05310332
05310342
05310345
05310369
05310370
05310388
05310398
05310410
05310440
05310441
05310476
05310550
05310586
05310622
05310655
05310754
05310824
05310837
05310865
05310871
05310890
05310895
05310916
05310928
05310933
05310949
Fifth Federal Reserve District
Office
Presentment Point
Northwestern BankN. Wilkesboro (cont'd)
Additional Transit Numbers
Charlotte
(cont'd)
Institutions
Wachovia Bank & Trust Co,
N 0A 0-Asheville
Wachovia Bank & Trust Co,
N„A0-Ashevil1e
Additional Transit lumbers
Transit
Numbers
05310959
05310982
05310983
05310984
05311008
05311018
05311025
05311028
05311050
05311069
05311082
05311083
05311090
05311095
05311099
05311100
05311101
05311102
05311103
05311110
05311112
05311136
05311139
05311140
05311141
05311142
05311147
05311148
05310035
05310092
05310147
05310205
05310277
05310309
05310338
05310394
05310808
05310917
05310938
05310939
05311081
05311146
F ifth Federal Reserve D is tric t
O ffic e
Presentment Point
In s titu tio n s
C h a rlo tte
Wachovia Bank 1 T ry s t Co0
N.A.-R aleigh
Wachovia Bank I T ry s t C©0
H0A0-R aleigh
A d d itio n a l T ra n s it Humbers
Machovia Bank & T rust Coe
1M0A0 - Winston-Salem
Machovia Bank I T rust Co0
M„A. - Minston-Salem
A d d itio n a l T ra n s it lumbers
(cont'd)
Transit
lumbers
05310763
05310003
05310041
05310121
05310126
05310152
05310301
05310304
05310312
05310348
05310350
05310351
05310352
05310421
05310427
05310608
05310874
05310875
05310908
05310912
05310914
05310934
05310937
05310992
05311011
05311015
05311021
05310049
05310067
05310132
05310136
05310158
05310167
05310170
05310179
05310196
05310218
05310248
05310384
05310395
05310397
05310952
F ifth Federal Reserve D is tric t
Transit
Office
Presentment Point
In s titu tio n s
Colombia
Bankers Trust of South
Carolina
Bankers Trust ©f South
Carolina
Additional Transit lumbers
Citizens and Southern
National Bank
Citizens and Southern
National Bank
Additional Transit lumbers
Numbers
05390448
05320044
05320084
05320097
05320100
05320104
05320114
05320120
05320143
05320151
05320156
05320159
05320225
05320455
05320457
05320527
05320618
05320654
05320657
05320659
05320662
05320670
05320677
05320734
05320736
05320743
05320744
05320745
05320746
05320751
05320754
05320756
05320757
05320759
05320760
05320764
05320765
05320777
05390037
05320006
05320073
05320107
05320111
05320117
05320123
05320144
05320152
05320169
F ifth Federal Reserve D is tric t
Office
Presentment Point
Citizens and Southern
National Bank (cont8d)
Additional Transit Numbers
Columbia
(e@nt8d)
In st*tu tio n s
First National Bank of
South Carolina - Columbia
First National Bank of
South Carolina = Columbia
Additional Transit Numbers
Transit
lumbers
05320175
05320378
05320454
05320547
05320654
05320582
05320691
05320700
05320713
05320750
05320767
05320759
05320772
05390688
05320005
05320062
05320125
05320127
05320137
05320142
05320153
05320158
05320162
05320163
05320166
05320246
05320326
05320475
05320525
05320532
05320592
05320660
05320675
05320688
05320690
05320697
05320698
05320699
05320707
05320708
05320735
05320738
05320762
05320774
F ifth Federal Reserve D is tric t
Transit
Office
Presentment Point
In s titu tio n s
Columbia
leont'd)
South Carolina National
Bank
South Carolina ^stional
Bank
Additional Transit lumbers
lumbers
05390022
05320001
05320050
05320060
05320063
05320110
05320113
05320115
05320136
05320145
05320157
05320171
05320202
05320218
05320242
05320250
05320639
05320641
05320645
05320650
05320717
05320723
05320727
05320740
05320749
05320755
05320758
05320775
05320787
Sixth Federal Reserve D is tric t
Office
Presentment Point
Institutions
Transit
Numbers
Atlanta
Citizens 1 Southern National
Bank
Citizens 1 Southern National
Bank
06111278
H r s t National Bank-Roue
First National Bank-Roue
06110079
First Stations! Bank of
Atlanta, Augusta
First National Bank of
Atlanta, Augusta
06111327
Trust Company of Cobb
County-Smyrna
Trust Company of Cobb
County-Smyrna
06110124
Jacksonville
Sun Bank of Orlando
Sun Bank of Orlando
Additional Transit Numbers
Nashville
First Tennessee BankKnoxville
First Tennessee BankKooxville
Additional Transit Number
06420777
06420719
Union Bank-Pulaski
Union Bank-Pulaski
06410136
06310215
06310133
06310479
06310590
06310638
06310649
06310665
06310675
06310710
06310733
06310832
06310838
06311002
Seventh Federal Reserve D is tric t
Transit
Office
Presentment Point
In stitu tio n s
Numbers
Chicago
Continental Bioic-Qak Brook
Continental Bank-Oak Brook
07192369
Detroit
Mi chi gan National Bank of
Lansing
Michigan National Bank of
Lansing
07241174
National Bank of DetroitDearborn
National Bank of DetroitDearborn
072 4 1 2 9 2
First Wisconsin BankBrook field
First Wisconsin BankBrookfield
07590954
First Wisconsin BankWaukesha
First Wisconsin BankWaukesha
07591208
Milwaukee
Eighth Federal Reserve District
Office
Presentment Point
Institutions
Transit
Wumbers
St. Louis
Mercantile Bank-Macon
Mercantile Bank-Macon
08150140
Memphis
CoMeree Union Bank-Ca.'den
Cofranerce Union Bank-Camden
08430272
Little Rock
Stephens Security Bank
Stephens Security Bank
08290755
Mi nth Federal Reserve D is tric t
O f f ic e
P re se n tm e n t P o in t
In s t it u t io n s
T r a n s it
lu m b e rs
M in n e a p o lis
F i r s t B a n k - H o r t h f ie ld
F i r s t B a o k - H o r t h f ie ld
09190148
F i r s t B a n k -S t *
F i r s t B a n k - $ t 0 C lou d
09190532
M orw est B a n k - F a r i b s u l t
W orw est B a n k - F a r ib a u lt
09190053
N o rw e st Ban k-R e d Wing
H o rw e st B a n k-R e d Wing
09190046
W orw est B a n k -G re a t F a 1 1 s s Iff
M orw est
W orw est
M orw est
H o rw e st
H o rw e st
09290017
09290034
09290002
09290047
09290516
S e c u r i t y B a n k -C o l s t r i p s MT
S e c u r i t y B a n k -C o l s t r i p , MT
B ig H orn B a n k -H a rd in
P io n e e r B a n k - B i l l i n g s
S e c u r it y B a n k - B illin g s
H elena
C lo u d
B a n k -G re a t F a l 1 s s MT
Bank-A naconda
B a n k -B u tte
B a n k - K a li s p e ll
B a n k -le w isto w n
09290142
09290525
09290153
09290041
Tenth Federal Reserve D is tric t
Office
P re se n tm e n t P o in t
In s t it u t io n s
T r a n s it
lu m b e rs
Denver
ffesa U n ite d Bank o f
Grand J u n c t io n
Mesa U n ite d Bank ©f
G rand J u n c t io n
10210091
U n ite d Bank o f M o n tro se
U n it e d Bank ©~ M o n tro se
10210072
Com m ercial Bank and T r u s t
Co .-M u sk o ge e
Com m ercial Bank and T r u s t
£© 0°M uskogee
10310002
Oklahoma City
Eleventh Federal Reserve D is tric t
O f f ic e
P re se n tm e n t P o in t
In s t it u t io n s
T r a n s it
lum bers
D a lla s
A b ile n e N a t io n a l Bank
A b ile n e n a t io n a l Bank
11130181
I n t e r F i r s t B a n k - C a r r o llt o n
I n t e r F i r s t B a n k - C a r r o llt o n
A d d it io n a l T r a n s i t Mumbe-
11192230
11132230
R e p u b lie b an k-B ro w n w o o d
R e p u b]icb a n k-B row n w ood
A d d it io n a l T r a n s i t Humber
11190155
11130155
F i r s t C it y N a t io n a l Bank o f
El P a so
Bank o f S i e r r a B la n c a
C o w e r c i a l S t a t e Bank
F i r s t n a t io n a l B a n k -F a b e n s
F i r s t n a t io n a l Bank in A lp in e
F i r s t n a t io n a l Bank o f Andrew s
F i r s t N a t io n a l Bank o f S ta n t o n
F i r s t S t a t e Bank^M onahans
M a rfa n a t io n a l Bank
n a t io n a l Bank o f Andrew s
Van Horn S t a t e Bank
11230681
11232308
11231952
11230467
11232225
11230722
11232183
11230473
11231171
11231334
T e x a s Commerce B a n k -O d e ssa
T e x a s Commerce B a n k -O d e ssa
11632293
T e x a s Commerce Bank-Corsroe
T e x a s Commerce B a n k -C o n ro e
11310667
E l Paso
H o u sto n
Twelfth Federal Reserve D is tric t
Transit
O ffice
Presentment Point
In s titu tio n s
lum bers
San Francisco
lank of the West-San dose
lank ©f the West-San J®se
12110078
Portland
F i r s t National Bank of
Oregon-Canby
F i r s t national lank of
Oregon-Canby
12320651
Idaho F i r s t National SankBoise
Idaho F i r s t national lankBoise
Idaho F i r s t National Bank30 Branches
S a lt Lake C ity
12410001
12410007
12410010
12410012
12410039
12410051
12410104
12410106
124] 0130
12410134
12410143
12410148
12410152
12410163
12410168
12410177
12410178
124] 0192
12410198
12410202
12410224
12410255
12410274
12410277
12410285
12410293
12410299
12410300
12410305
12410318
12410339
HIGH DOLLAR GROUP SORT (HDGS) FEES
Item
Fee (i)
Tice
HDGS
Cash Letter
Surcharge
Total HDGS Cash Letter Fee*
Intert@rri tor>/
Intr&terHtory
1ne
oston
ewiston
indsor Locks
6.0
5.5
6o0
$ 9.00
9.00
5.00
11.25
11.25
7.25
9.75
9.75
5.75
0830
0830
0830
ew York
uffalo
ericho
ranford
tica
N/A
8.0
8.0
8.0
8.0
3.25
8.00
9.00
16.00
5.25
10.00
11.00
18.00
3.25
8.00
9.00
16.00
0830
0830
0830
0830
hiladelphia
14.0
7.00
9.50
8.50
0815
leveland
incinnati
ittsburgh
olumbus
10.0
10.0
10.0
10.0
3.50
8.00
5.50
5.50
7.00
11.50
9.00
9.00
5.00
9.50
7.00
7.00
0930
0930
0930
0800
ichmond
altimore
harlotte
olumbia
harleston
11.0
8.0
12.0
14.0
N/A
20.00
14.00
18.50
12.50
22.50
16.50
21.00
15.00
21.50
16.00
20.00
14.00
0900
0830
0800
0900
\tlanta
Birmingham
Jacksonville
Nashville
lew Orleans
Miami
10.0
N/A
15.0
15.0
N/A
N/A
3.00
5.00
3.00
0800
35.00
50.00
37.00
52.00
35.00
50.00
0800
0800
Chicago
)etroi t
3es Moines
Indianapolis
MiIwaukee
9.0
10.0
N/A
N/A
10.0
5.00
5.00
7.00
7.00
7.00
5.00
0830
0900
5.00
7.00
7.00
0830
it. Louis
.ittle Rock
.ouisvi1le
Memphis
12.0
12.0
7.0
13.0
5.75
14.50
12.50
34.00
8.25
16.75
14.50
36.75
7.25
15.00
12.50
35.75
0900
1030
0930
0930
Minneapolis
lelena
6.0
10.0
7.00
18.00
8.50
20.00
7.00
18.00
0800
0900
*Includes HDGS Cash Letter Surcharge listed under third column.
(Over)
HDGS
Item
Fee (t)
Office
Kansas City
Denver
Oklahoma City
Omaha
N/A
20o0
10,0
N/A
Dallas
El Paso
Houston
San Antonio
San Francisco
Los Angeles
Portland
Salt Lake City
Seattle
Cask Letter
Surcharge
Total HDGS Cash Letter Fee*
Interierri tory
IntratirHtory
Dead!1me
50,00
30,00
52,00
32,00
50,00
30,00
0900
0900
15,0
15,0
15,0
N/A
25,00
12,50
8,00
27,00
14,50
10,00
25,00
12,50
8,00
0830
0915
0900
0,0
N/A
8,0
0,0
N/A
5,00
8,00
6,00
0800
5,00
18,00
8,00
21,00
6,00
19,00
0900
0730
*Includes HDGS Cash Letter Surcharge listed under third column.
7
RESERVE press release
iiA <q
For immediate release
’C ' i f t j
February 23, 1984
The Federal Reserve Board today issued a policy statement regarding
delayed disbursement practices.
Delayed disbursement consists of arrangements offered by depository
institutions that are designed to delay the collection and final settlement of
checks*,
Users of delayed disbursement arrangements draw checks on institutions
located substantial distances from the payee or on institutions located outside
of Federal Reserve cities when alternate and more efficient payment arrangemants are avail able*.
The Board expressed concern over delayed disbursement practices because they deny prompt access to funds and increase the risk of loss to consumers,
businesses and otherso
In addition, the increase in delayed disbursement practices
has reduced the efficiency of the check collection system because of the higher
processing and transportation costs to collect items, increased incidence of de=
layed funds availability and higher processing and transportation costs for return
itemso
The Board is therefore encouraging and requesting the banking industry to
seek further improvements in check collection and funds availability and not to
offer delayed disbursement arrangements«
The Board's policy statement is attached*,
~Q~
Attachment
Policy Statement on Delayed Disbursement Practices
The Federal Reserve Board is concerned that the practice of delayed
disbursement has become increasingly prevalent,,
Delayed disbursement consists
of arrangements designed to delay the collection and final settlement of checks
by drawing checks on institutions located substantial distances from the payee,
or on institutions located outside of Federal Reserve cities when alternate and
more efficient payment arrangements are-available0
The increase in delayed disbursement practices has reduced the
efficiency of the check collection system0
The concerns expressed by the Board
in its 1979 policy statement on delayed disbursements are still valid today,,
Recipients are denied availability of funds to the extent that funds would be
available earlier if the transaction had been consummated using a check dis
bursement point where collection could be more readily accomplished.
A check
drawn on an institution remote from the payee often increases the costs of
handling the checko
First, more institutions are likely to handle the check
before it is finally paid, increasing processing costs0
Second9 higher
transportation costs are incurred to move checks greater distances0
It has
been estimated that the incremental cost for handling checks drawn on delayed
disbursement accounts is approximately 7 cents per item„
practice delays the return of unpaid checksD
In addition, the
These disbursement practices
result in increased possibilities for check fraud and other losses, higher
processing and transportation costs, increased incidence of delayed funds
availability, and higher processing and transportation costs for return
items o
-2-
The remote location of institutions offering delayed disbursement
arrangements often increases the collection time for checks by at least a daye
Recipients of delayed disbursement payments, moreover, are exposed to increased
risk of loss,,
The extended collection time for checks drawn on such accounts
increases the chances that the checks will not be paid when presented for
payment due to reasons such as insolvency of the payor„
Finally, delayed disbursement arrangements could give rise to
supervisory concerns since a bank may unknowingly incur significant credit
risk through such arrangements,,
The primary risk is payment against uncol
lected funds9 which could be a method of extending unsecured credit to a
depositor and lead to violations of legal lending limits,,
Absent proper and
complete documentation regarding the credit worthiness of the depositor,,
paying items against uncollected funds could be considered an unsafe or
unsound banking practice,,
Furthers even if properly documenteds such loans
might exceed the bank's legal lending limit for loans to one customer,,
Examiners are instructed to to review routinely a bank's practices in this
area during the course of examinations to ensure that such practices are
conducted prudently,,
If undue or undocumented credit risk is disclosed
or if lending limits are exceeded, examiners will continue to take appro
priate corrective action,,
The Board believes that the banking industry has a responsibility
not to offer or otherwise encourage the use of arrangements that result in a
delay in the collection and final settlement of checks,,
The Board has
implemented a program designed to accelerate the collection of checks and
encourages the banking industry to seek further improvements in check collection
-3-
and funds availability.
The Board intends to monitor the success of volun
tary efforts to reduce and eliminate the use of delayed disbursement arrange
ments.
In instances where delayed disbursement abuses continue8 the Board
intends to pursue appropriate action.
This may include Federal Reserve
operational changes to speed up the collection of checks drawn on these
institutions.
@FedFRASER