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#215115 - 07/23/04 08:28 PM Defining Local Check Holds
Anonymous
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The definition of a "local paying bank" in Reg CC is any bank in the same "check processing region". What exactly does this mean? For example, according to Appendix A, the 4th Federal Reserve District has a "Head Office" in Cleveland, a "Branch Office" in Cincinnati, and an "Office" in Columbus. Is each one of these a separate "check processing region" so a bank in one would be nonlocal to a bank in either of the other two? Thanks!

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#215116 - 07/23/04 08:34 PM Re: Defining Local Check Holds
John Burnett Offline
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John Burnett
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Each of the three is a separate RCPC. Banks that are local to the Cincinnati office are not local to the Columbus office. Note that there are some 5th district banks in the Cincinnati RCPC.
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#215117 - 07/23/04 09:23 PM Re: Defining Local Check Holds
HappyGilmore Offline
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Pulling people out of the ditc...
It will also depend on teh R/T# in the MICR line. Many of the super regional and national banks intentionally do not retire old R/T#s, so they may take advantage of float. However, in this case, if each branch uses the same MICR line, they would all be local to Cleveland.
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#215118 - 07/26/04 02:19 PM Re: Defining Local Check Holds
Anonymous
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Quote:

It will also depend on teh R/T# in the MICR line. Many of the super regional and national banks intentionally do not retire old R/T#s, so they may take advantage of float. However, in this case, if each branch uses the same MICR line, they would all be local to Cleveland.




Could you please clarify that point? Do you mean that since all three regional offices of the 4th Fed District are nonlocal to eachother that when a bank in one of the regional offices (such as Cleveland) acquires a bank in another regional area in the same Fed District (such as Columbus) that they retain the acquired bank's routing number so those branches will continue to be treated as local in the Columbus region?

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#215119 - 07/27/04 04:11 PM Re: Defining Local Check Holds
HappyGilmore Offline
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Pulling people out of the ditc...
Use this as an example. Bank A (R/T 1111-1111-9) buys Bank B (R/T2222-2222-6). Bank A is located in Texas, and Bank B in New York, clearly not local. However, after the merger, the MICR line of Bnk B is changed to read 1111-1111-9, just like the acquiring bank. At this point, even though the Branch is located in New York, the checks are treated as local to the Texas bank. However, now the New York branch is treated as other Fed to other New York banks, due to the MICR line change.
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#215120 - 07/28/04 02:05 PM Re: Defining Local Check Holds
LoisLane Offline
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Wisteria Lane..
Quote:

...However, now the New York branch is treated as other Fed to other New York banks, due to the MICR line change.




You hve a few missing words in the above sentence. Are you saying ...treated as non-local to other NY banks?
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#215121 - 07/28/04 05:39 PM Re: Defining Local Check Holds
HappyGilmore Offline
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Pulling people out of the ditc...
yes, they would be treated as interterritory (we call that Other Fed down here) items, also known as Other Fed Group Sort.. They would be non-local due to the 11th district R/T#.
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