Compliance Blog

Posted by Anthony Demangone

On Monday, the Federal Reserve posted a final rule to announce what appears to be the final consolidation of its check processing centers.  As of February 27, 2010 - the non-local check will go the way of the dodo bird and short-shorts on NBA players.  

On February 27, 2010, the Reserve Banks will transfer the check-processing operations of the head office of the Federal Reserve Bank of Atlanta to the head office of the Federal Reserve Bank of Cleveland. As a result of this change, some checks that are drawn on and deposited at banks located in the Atlanta and Cleveland check-processing regions and that currently are nonlocal checks will become local checks subject to faster availability schedules. To assist banks in identifying local and nonlocal checks and making funds availability decisions, the Board is amending the lists of routing symbols in appendix A associated with the Federal Reserve Banks of Atlanta and Cleveland to reflect the transfer of check-processing operations from the head office of the Federal Reserve Bank of Atlanta to the head office of the Federal Reserve Bank of Cleveland. To coincide with the effective date of the underlying check-processing changes, the amendments to appendix A are effective February 27, 2010. At that time, there will only be a single check-processing region for purposes of Regulation CC and there will no longer be any checks that are nonlocal. The Board is providing notice of the amendments at this time to give affected banks ample time to make any needed processing changes. Early notice also will enable affected banks to amend their availability schedules and related disclosures if necessary and provide their customers with notice of these changes.

So, take a look at your check hold policy, disclosures and check processing practices in light of these changes.

(Technically, short-shorts could make a comeback.  But I wouldn't hold your breath.)