Fed Announces Current and Future Routing Changes
The Federal Reserve Board has issued a final amendment effective July 22 to Regulation CC that updates routing numbers for Federal Reserve and Federal Home Loan Banks. The agency also announced routing number changes that will be made in the future to accommodate its actions in closing down 13 of the Federal Reserve check processing centers.
The current changes delete retired routing numbers from Appendix A. Future changes will be made to the appendix to accommodate trimming the number of Fed check processing locations from 44 to 32, a process that will begin in the second half of 2003 and end in late 2004.The Fed says it is cutting down on locations to account for a drop in the number of checks written from about 50 billion annually in the mid-1990s to about 40 billion in 2002.
Because of the decrease in numbers of locations, the funds availability schedules for many banks will also change since "local" checks will encompass greater areas. Banks generally must provide next-day or second-day availability for certain low-risk types of checks and checks drawn on local banks. Items generally subject to next or second-day availability include Treasury checks; U.S. Postal Service money orders; cashiers, certified or tellers checks; checks drawn by a state or local government; and checks drawn on the same branch or another branch of the depositary bank when both branches are in the same Fed processing region. For checks not subject to next or same-day availability, banks also must provide faster availability for funds deposited by a "local check" than by a nonlocal check. Appendix A is the routing number guide that assists banks in determining permissible hold periods.
The changes to Appendix A also mean that banks in affected check processing areas will need to realign their internal operating systems and give related disclosures to customers.
The future changes to Appendix A will be published in the Federal Register as they occur and banks will have at least 60 days to make processing changes and notify customers.
To see which processing centers will be closing, go to www.federalreserve.gov/boarddocs/press/bcreg/2003/20030520/attachment.pdf.
Copyright © 2003 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 13, No. 4, 6/24
First published on 06/24/2003