OCC Bulletin 2003-26| June 19, 2003

Expedited Funds Availability Act: Revisions to Routing Numbers and Check Processing Regions


Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, and All Examining Personnel

The Board of Governors of the Federal Reserve System (Board) has revised Regulation CC (12 CFR 229), the implementing regulation for the Expedited Funds Availability Act, 12 USC 4001 et seq. Specifically, the Board amended Appendix A to Regulation CC, the Routing Number Guide to Next-Day Availability Checks and Local Checks. The final rule becomes effective on July 28, 2003.

Under Regulation CC, items generally subject to next- or second-day availability include checks drawn on the U.S. Treasury; U.S. Postal Service money orders; checks drawn on a Federal Reserve Bank (FRB) or a Federal Home Loan Bank (FHLB); checks drawn by a state or unit of general local government; cashier's, certified, or teller's checks; and checks drawn on the same branch or another branch of the depositary bank if both branches are located within the same Federal Reserve check processing region. The Board's final rule updates Regulation CC's list of FRB and FHLB routing numbers as of the effective date.

For checks that are not subject to the next- or second-day availability rules, banks generally must provide faster availability for funds deposited by a "local check" than for funds deposited by a "nonlocal check." A check drawn on a bank is considered local if it is payable by or at a bank located in the same Federal Reserve check processing region as the depositary bank. The Board's final rule advises banks about future amendments to Regulation CC (to be published in the Federal Register at least 60 days before the effective date) that will reduce the number of check processing regions from 44 to 32. The result of these changes will be that more checks in the affected regions will be considered "local" when deposited, and thus subject to the rules for faster funds availability. These amendments will take effect on a staggered basis beginning in the second half of 2003 and ending in late 2004. The Board notes, however, that affected banks may prefer to make all of their processing and availability changes prior to the effective dates of these amendments.

A copy of the Board's final rule is attached. You may direct any questions to your supervisory office or OCC Compliance Division (202) 649-5470.

David G. Hammaker
Deputy Comptroller for Compliance

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