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What is a "local" check?
Answer by John Burnett and Ken Golliher, BOL Gurus

Question: Where does Appendix A of Reg CC define a local check? We were previously written up by auditors for treating checks with routing #'s within our Fed District as a non-local check. They consider a local check to be only checks processed through the local processing center.

Must I complete a new form if the customerís address changes, or can I note it in my own files and just update my exempt list?

Answer by John Burnett:
BIO AND CONTACT INFO

Appendix A can help you decide what MUST be included as local, based on where the branch of deposit is located. You must treat as local a check drawn on a bank in the same check processing region as your branch of deposit.

Some state laws expand the definition of "local." For example, Massachusetts banks have to include checks drawn on any Massachusetts bank, even if in another processing region.

Answer by Ken Golliher:
BIO AND CONTACT INFO

It takes two definitions to get you where you are going:

r) Local check means a check payable by or at a local paying bank, or a check payable by a nonbank payor and payable through a local paying bank.

(s) Local paying bank means a paying bank that is located in the same check-processing region as the physical location of the branch, contractual branch, or proprietary ATM of the depositary bank in which that check was deposited.

As John suggests, look at Appendix A and find your check processing region. All the numbers listed under that office (not the entire Federal Reserve district) are "local" checks.

First published on BankersOnline.com 07/14/03







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