The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Autumn 1996
News and Views
on
Eighth District
Financial Services
SEP 2 5 1996
Quarterly
The Nuts and Bolts of EFfPS
Since our story last spring on
the U.S. Treasury's Electronic
Federal Tax Payment System
(EFTPS) , which enables corporate taxpayers to pay federal
taxes electronically, we've
received many inquiries about
certain options. To assist you
in preparing to initiate el~ctronic tax payments for your
corporate customers, here are
answers to the most frequently
asked customer questions:
tion services, ask them if
they can process your
customers' electronic tax
payments.
If you choose not to provide EFTPS services for your
customers, they can use the
ACH Debit option, in which
the Treasury Financial
Agent (TFA) originates the
tax payments.
/fou·
w JI I lxrnme 1lll
I( If rm;~ill{tlor?
J)o I hare to /Je m1 101
rmp,iJ1alul' lo i111tiale elec/J·oJ/
ic let.\' jJ(~)'ll!eJIIS j()l' my COi'
/HJl'tlle Cl{\'/OllleJ'\'?
Yes, you must be able to originate ACH credits. If you use
Fedline to receive ACH items,
you are already able to originate. If you use a correspondent bank or third-party
processor for your ACH origina-
Payment
Cycling
Delayed
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Contact your account
executive or Andy
Lueckenhoff, the Eighth
District ACH account executive,
at (314) 444-8647.
1) value Fedwire, 2) non-value
Fedwire or 3) Direct Access .
through the Fed's Electronic
Tax Application (ETA) system
(via either the Fedline Taxpayer
Deposit application or a Computer Interface connection) .
Future-day payment mechanisms enable companies to pay
their taxes at least one day
before they' re due. The two
payment options for these
transactions are ACH Debit and
ACH Credit.
Taxpayers that can't report
their taxes before the due date
can use one of the same-day
payment mechanisms:
he Social Security
Administration (SSA)
recently announced that the
payment cycling initiative has
been postponed. Originally
planned to begin with Social
Security payments distributed
in January 1997, the initiative
is now tentatively scheduled to
start next spring.
To help keep up with the
increasing number of benefit
payments it disburses, SSA
established payment cycling
and created three additional
payment dates each month:
the second, third and fourth
Wednesdays.
We will let you know when we
learn of the exact date payment
cycling will start. For more
information, please contact
Cheryl McCarthy in St. Louis
at (314) 444-8459.
l! /J{{/ ,;,· !he d1j/l'1 c11cc'
/Jetu eel!juture mid S({JJll'
dar j}{(J'JJlelll ml!Cb{{msm,?
T
continued on page 2
Check Out Check Services
on the Internet
EFTPS
continuedfrom page I
I /011 du I gel the 'lhr fJli)()sil
0/1/nm ins/{l//ed on Jed/me?
The St. Louis Fed can supply
you with a disk that contains
this application. To obtain a
disk, contact Customer Access
Support at 1-800-333-0861
and press 1. This option is
only available for same-day
payments.
11
11
ll /J({/ i,' the d1f/ereuce /Je
/l('eell the,1CH JJebil am/AC!!
(red1I /Jt~J'IJU!lll mechm11:m1s?
With the ACH Debit application, taxpayers report their
taxes to their TFA, either
through personal computer or
telephone. The TFA then sends
an ACH debit to the taxpayers'
account at their financial
institution. In these transactions, the TFA is the originating depository financial
institution (ODFI) and the
taxpayers' financial institution
is the receiving depository
financial institution (RDFI).
With the ACH Credit applica
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If you've misplaced those
price cards and availability
schedules that your Federal
Reserve office sent you last
year, don't worry. They can
all be found on the St. Louis
Fed's web site. Just visit us at
http://www.stls.frb.org and
click on the Financial
Services heading.
The Fed's home page also
inch1des current information
on our check services. In the
future, we will add items
such as interactive worksheets,
which will allow you to calculate your approximate costs to
use various check services.
"Because more and more of
our customers are gaining
access to the Internet, we see it
as very important to provide as
much information as we can
on-line," said Bill Leslie, vice
president of Retail Operations
at the St. Louis Fed. "In the
coming months, we'll be providing details about our trun-
cation and image-enhanced
corporate cash management
products, plus much more."
You can bypass the Bank's
home page and connect to
Check Services directly at.
http://www.stls.frb.org/check/.
For more information, please
contact Frank Blacharczyk in
St. Louis at (314) 444-8960.
tion, taxpayers ask their financial institution to withdraw
funds from their account and
credit the Treasury for the
amount of the tax payment.
In this case, the financial
institution is the ODFI and the
Treasury is the RDFI. The TFA
is the receiving point for the
information files; however, the
funds settle directly to the
Treasury's account at the
Federal Reserve.
(#9779) .. When customers
sign up for ACH Debit, they
will automatically be enrolled
for the ACH Credit option.
let distributed this past June.
Exhibit 4 in this booklet lists
helpful phone numbers for
you and your corporate
customers to call and speak to
a service representative.
In addition, you can attend
one of the half-day seminars
being conducted at the
St. Louis Fed and the Branches
(see Calendar) ;call the Fed's
EFTPS specialist, Nancy
Klages, at (314) 444-8707, or
visit the EFTPS web site at
http://woodrow.mp1s.frb.fed. us.
Can comj,allies smlch to
the ACH Credit 0/1/ion c(/ier
they a/re{{{(J' e11ro/ledjrJr
mulst({rted usi11p, the ,IC/I
!Jebil oj'lirm?
Yes, as long as their financial
institution is an ACH originator and offers EFTPS services.
!f wslomeJ'., choose the IC!!
Credit oplwn_/(;r HFm\·. m11
llll'.l' also ,,1/~ll 1t/1jr1r !Ir}!
!Jebi! {IS a baclw/1 melbod 1
Yes, but they must provide
the IRS with the information
requested in items #30
through #33 on the EFTPS
Business Enrollment Form
lfo11· l('i/1 HF'lP\ c(//ecl my
'lT&L ({CCOll!!I?
Electronic tax payments can
affect your TT&L account
several ways; depending on the
payment mechanism your
customers use and whether
you are a Remittance or Note
Option TT&L institution. See
pages 27-30 of the Electronic
Federal Tax Payments booklet for specific details.
For customers not using
EFTPS, the total number and
dollar value of all paper federal tax deposit (FTD) coupons
and checks should still be
reported through the IT&L
option on either EDITH or
Fedline. This balance will not
include funds sent via ACH or
Funds Transfer.
!l011· cm1 I team more
a/Jou I FFm\'?
Consult the Electronic
Federal Tax Payments book-
Cuba, Mo., Bank Makes
Its Mark with Check Image
t first glance,
Peoples Bank of
Cuba may appear
to be a small, traditional financial
institution sitting
90 miles southwest of St. Louis.·
But take another look, because
this bank of $85 million in
assets is at the forefront of one
of the banking industry's
hottest technologies-check
imaging.
Using the Federal Reserve
Bank of St. Louis to capture its
checks, Peoples Bank provides
image statements for both
individual and corporate customers. Instead of sending
customers their canceled
checks with their
statements, the bank
provides 8 1/2- by
11-inch sheets of
paper, each
banks were pleased with the
results: easier check reconcilement; quicker retrievals;
reduced postage tosts; and the
reduction of staff members
who were needed to file and
retrieve paper checks and
microfilm.
Although Peoples Bank was
sold on the idea of image,
installing its own system could
cost $500,000 or more.
"We realized that an inhouse solution was not feasible
because of costs," Dean said.
"But by using the Fed to capture our checks, we were able
to reduce our costs and offer
image to our customers.''
Dean expects the bank's
less-than-$100,000
investment-for two
servers, a scanner
and a laser
Bill Dear, of Peoples Bar,I, of Cuba duplays tbe cbecl, Image storage
blllder lbe ba,.,, gives to each CNSlonler.
containing up to 10 check
images.
Peoples Bank first considered
switching to image last fall,
said Bill Dean, vice president/
cashier at the bank. Dean and
other bank officials visited
banks that had already
installed their own image systems and found that these
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
printer-to pay for itself in
three to four years. And
customer reaction has been
almost unanimously positive,
he said.
"They like the product a lot,"
Dean said. "We gave each customer a three-ring binder with
monthly indexes and storage
envelopes, so they can keep a
neat file of their image sheets
and statements. We promoted
image as a financial recordkeeping system. It was great
PR for us. "
Peoples Bank also accommodates customers' special
requests, such as including the
backs of checks on an image
sheet. Angie Medwick, assistant vice president of customer
service at the bank, added that
image makes check retrievals
easier for the bank and less
costly for customers.
"Before, when we were
researching a particular check,
we would go through a whole
drawer-full to try to find the
right one," Medwick said.
"The customer was charged
$15 per hour of research. But
now, we can find the checks
right away on 8 millimeter
tapes, and the customer is
charged nothing."
With all of the positive
advantages of image, Dean
expects to see more financial
institutions converting in the
near future.
"A lot of banks think
image will cost them an
arm and a leg, but if they
do some research, they
will find that it is very
cost effective," he said.
For more information
on image, call your Federal
Reserve account executive.
One Company's
Viewpoint
One of Peoples Bank's business accounts is Jim's Motors
of Cuba. Here is what owner
Darlene Cape had to say about
receiving imaged checks.
"It's wonderful. We write
about 180 checks per month
here, and now we receive the
images of these checks in order
every month with our statements. I used to take the canceled checks home with me
and sort them while I watched
TV I would say that this new
system saves me up to four
hours per month. Plus, if
some kind of disaster struck
and all of our paper images
were destroyed, Peoples Bank
could reproduce them for us
within a day."
Recipe for Image
1 Each day, the Federal
Reserve Bank of St. Louis captures images for all of Peoples
Bank of Cuba's checks and
provides them on a 3480 magnetic tape.
2 Peoples Bank loads the
tape onto a tape reader and
copies the file of checks onto
the bank's hard drive.
3 From the hard drive,
Peoples Bank produces statements and imaged sheets for
its customers.
4 Finally, the check images
are transferred to an 8 millimeter tape for permanent
storage. These tapes can hold
one month's worth of checks.
Branchii\gOut
New Memphis Account Executive Brings Experience
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ecause her new job entails
servicing about 300 financial institutions, it helps that
Susan Bivens has worked for
banks of varying sizes during
her 20 years in the industry.
"My background and experience will make it easier for me
to relate to my customers'
goals and service issues," said
Bivens, who was hired in June
as the Eighth District's new
account executive at the
Memphis Branch. Her most
recent position was as assistant
vice president/branch manager
at Victory Bank and Trust Co.
in Cordova, Tenn., where she
directed the daily branch operations of the bank's first
branch and was instrumental
in helping the bank grow from
$70 million in assets to $100
million in just two years.
B
"Building trust is the
most important factor in developing
relationships and
ensuring loyalty."
-Susan Bivens
Previously, Bivens spent several years in a similar position
at NationsBank of Tennessee,
where she directed all aspects
of day-to-day operations.
Before that, she worked at First
Tennessee Bank in Memphis,
where she supported business
development efforts within the
upscale consumer market
using bank depository and
credit products and services
as sales vehicles.
Now, she will spend about
half her time on the road,
visiting financial institutions
in Tennessee, Mississippi and
Arkansas. Bivens said working
at the Fed is a challenge she
looks forward to.
"I like communicating with
people and helping them find
solutions to their concerns,"
she said.
Among the services the Fed
currently is providing, Bivens
says she notices a great deal of
interest in check imaging. She
said financial institutions will
be making greater advances
toward using and promoting
electronic payment methods
to remain competitive and
increase their efficiency.
"There definitely will be a
greater push for electronic
banking in the future, "
Bivens said.
As for her philosophy in servicing customers, Bivens relies
on a tried and true principle"Do what's best for the cus-
tamers, be honest with them,
listen and respond. Building
trust is the most important
factor in developing relationships and ensuring loyalty."
ReserveNotes
New NACHA Rule
Changes Affect
Two SEC Codes
1\vo ACH Standard Entry
Class (SEC) codes will change
Sept. 20 as part of the 1996
NACHA operating rules update.
Corporate Trade Payment
(CTP) no longer will be considered a valid SEC code.
These payments must be converted to another format, such
as CCD or CTX.
Automated Enrollment
(ENR), a new SEC code, has
been created to simplify the
process of signing up consumers for the direct deposit of
some federal benefit payments.
Instead of mailing a form or
making a phone call, you can
use the ACH network (through
your Fedline or Bulk Data
connection) to send federal
agencies enrollment information for the following benefit
payments: Social Security,
Supplementary Security
Income, Railroad Retirement
payments, Veterans compensation and pension, and Civil
Service annuity and survivor
payments.
For details on these or any of
the other NACHA rule changes,
please consult the 1996 ACH
NACHA Rule Book, which can
be purchased from your local
ACH Association. If you have
any questions, contact Andy
Lueckenhoff in St. Louis at
(314) 444-864 7 or your local
ACH association.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
New Position Created
to Promote ACH
To help support the Federal
Reserve's goal of increasing the
use of the Automated Clearing
House (ACH) network, the St.
Louis Fed has appointed Andy
Lueckenhoff to the new position of Eighth District ACH
account executive.
In this role, Andy is available
to help you with your ACH
marketing efforts, as well as
meet with you and your corporate customers to provide
training and educational assistance.
Andy brings to this position
an extensive financial services
background. He has been with
the St. Louis Fed for more than
20 years and has worked in
many areas, including ACH,
Check, Wire, Support Services,
Reserve Accounting and, most
recently, Customer Support as
the account executive for
southern Illinois.
If you would like to schedule
a visit with Andy, please call
(314) 444-8647.
Treasury Payment
Changes: Are You
Ready? .
Confused by mandatory EFT
legislation, EBT and other
recent government payment
initiatives? If you would like to
better understand how to prepare your organization for
these programs and take
advantage of the new business
opportunities they present, you
can attend a free seminar enti-
tled Electronic Government
Payments: The Key to
&panding Your Business
Opportunities Oct. 16 at the
St. Louis Fed.
Along with the above topics,
the sem_inar also wi11 address
EFTPS, SSA Payment Cycling,
Automated Enrollment (ENR)
and the Vendor Payments
Program. Presenters from the
St. Louis Fed, the U.S. Treasury's Financial Management
Service and Mid-America
Payment Exchange will
provide an overview of these
initiatives and discuss opportunities for you to increase your
volume of electronic payments.
For more seminar details,
contact Jenna.Martin in
St. Louis at (314) 444-8946.
Out With the
Old $ 100 Bills
You can help play an impor-tant role in replacing old $100
bills with the redesigned currency. When you receive the
old-style bills from customers,
deposit them with your local
Federal Reserve Bank. Only
the redesigned $100 bills
should be distributed to the
public. Although the old notes
are legal currency, it's important to begin using the new
ones to help deter counterfeiting. If you have any questions
or would like to order the new
currency, contact your account
executive or the Cash
Department at your local
Reserve Bank.
Calendar
EFTPS Seminars
Oct. 28 & 29
Nov. 5 & 6
Nov. 13 & 14
Nov. 18 & 19
St. Louis
Little Rock
Louisville
Memphis
These half-day seminars
will include a brief overview
of EFTPS and a Fedline
demonstration. For more
information, call Susan
Hackney in St. Louis at
(314) 444-8485.
Answers to Consumer
Questions on
Direct Deposit
The Federal Reserve Bank
has developed a new pamphlet
for consumers that answers, in
plain language, some common questions about direct
deposit. The pamphlet, A
Consumers Guide to Direct
Deposit, addresses issues such
as how consumers know their
money was deposited, confidentiality of account information, and more.
For more information, call
Cheryl McCarthy in St. Louis at
(314) 444-8459 or at our toll
free number listed on the back.
Fed ACH
Update:
New
Features
Available
This Fall
I
n August, all Reserve Banks
completed their conversion to
Fed ACH, the new centralized
ACH software that offers expanded processing options and
more on-line capabilities.
Because all 12 Districts are now
using this software, several
additional features will be
available that enable you to:
• Use a later premium
processing deadline
•Enjoy a more flexible
operating schedule
• Sort items by type and
settlement date
• Deliver files to separate
locations at d(/ferent
frequencies
• Perform more functions
on-line: Through Fedline,
you will be able to make
file and item trace more
requests, and also file and
advice remake requests.
Watch your mailbox for more
information on when these features will be available. Before
the features are implemented,
you will receive a user guide
that describes the new Fed ACH
features and file processing
capabilities in greater detail.
For more information, contact
Langston Scott in St. Louis
at (314) 444-8461.
Our Goal: All ACH items will be available to receivers by
5:_30 p.m. EST for the day cycle ang 5:30 a.m. EST for the
mght cycle 99.9 percent of the time.
100 percent
95 percent
100 percent
■
I
I
I
Post Office Box 442
St. Louis, Missouri 63166
Volume 1, Number 3
Payments Quarterly is published quarterly by the
Financial Services Office of the Federal Reserve Bank of
St. Louis. If you wish to obtain additional copies or would
like others at your organization to receive Pavments
Quarler(J', contact Cheryl McCarthy at (314). 444-8459.
Payments Quarterly is also avai lable on the Internet at
http://www.s~s.frb.org.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
printed mz recycled U.S. currency
V
If you have questions or
comments about any of the
Federal Reserve's products
or services, let us pay for the
call. Our toll-free phone
numbers are listed below.
St. Louis Office
1-800-333-0810
Little Rock Office
(in Arkansas)
1-800-:4~2-9463 (outside Arkansas)
1-800-332-0813
Louisville Office
(in Kentucky)
1-800-292-3596
(outside Kentucky)
1-800-626-4507
An update of the Eighth District's quality measure goals
Measure: Timely Availability of ACH Items
Current Performance:
January 1996 -June 1996
July 1996
August 1996
It's On Us
Memphis Office
(in Tennessee)
1-800-552-5132
(outside Tennessee)
1-800-238-5293
@FedFRASER