I work for a commercial bank in the 11th federal district and we recently had a meeting where our compliance officer informed us that our checks are now being routed to Dallas, instead of El Paso, where they have been going. Our C.O. gave us all of the new routing #s and informed us that we would now be accepting them as "local" checks, therefore changing any of those holds to LOCAL status. This sounds great to me, however, the only info I have been able to find shows that this change should take place in MAY of 2004! This is from a letter from the Dallas Fed Dated May 30 of this year. It does say that changes are a possibility but I have failed to find any updated announcements. Are there some legal or liability issues we may face if our bank implements this change 9 months before it takes place? (We will be holding funds availability on the new "local" checks for our standard 2 days when they would otherwise be held for a longer period so that they clear). If there has been a change, I would love to get the reference. I would appreciate any input.

I am trying to find an answer to the same issue. We are in the 8th district which is going to be moved to Cincinnati, but I cannot find an effective date of that either. Can anyone point me in the right direction, as well as what will be considered local routing numbers, when this change takes place.

We're in the 8th district also and I remember reading it won't convert until August, 2004.

Monitor how long it is taking for checks in Dallas processing region to return. If it is longer than 2 days, then you have a potential liability if you implement the change before it actually occurs.

I believe the Fed letters state that banks can implement it earlier if they want to, but I cannot figure out why a bank would want to. We are being switched to Cincinnati, and we aren't changing until the actual date in 2004.

If you implement early, you won't incur liability except for the possibility that you will be making funds available sooner than required and you might have to eat a bad check here and there. But you won't get into other legal hassles.

One caution: When you implement (early or when required), your bank will need to notify consumer depositors of the change within 30 days after you make the change, if you place holds to statutory limits on all deposits. The table from Model Disclosure Form C-4 will have to be updated.

Here's a link to the projected implementation schedules. I agree with John, the principal effect of being an early adopter is that you would be voluntarily reducing holds as if the checks were clearing much faster than they actually are today.

The risk is tangible and I see no reward.