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Federal Reserve announces final rule amending Regulation D

July 15, 2015

On June 18, 2015, the Federal Reserve Board announced in a press release (Off-site Link) the approval of a final rule amending Regulation D (Reserve Requirements of Depository Institutions) to make changes to the calculation of interest payments on excess balances maintained by depository institutions at Federal Reserve Banks. The final rule is a matter of prudent planning and has no implications for the near-term conduct of monetary policy. 

The final rule bases interest payments to depository institutions with excess balances on the interest on excess reserves (IOER) rate in effect each day and the level of balances held each day, rather than on the average IOER rate and average level of excess balances over the maintenance period. The changes are intended to enhance the effectiveness of changes in the IOER rate in moving the federal funds rate into the target range established by the Federal Open Market Committee when changes in those rates do not coincide with the beginning of a maintenance period. The final rule is the same as the proposal that was published on April 13. It will become effective on July 23, 2015. 

For more information on the final rule, please see the corresponding notice in the Federal Register (80 FR 35565) (Off-site Link). For more information on interest on reserves, please see the Reserve Maintenance Manual (Off-site Link) or the Reserves Central—Reserve Account Administration Application Frequently Asked Questions. If you have questions, please contact your local Reserves Central District Contact.

Announcement

On June 18, 2015, the Federal Reserve Board announced (Off-site Link) the approval of a final rule amending Regulation D (Reserve Requirements of Depository Institutions) to make changes to the calculation of interest payments on excess balances maintained by depository institutions at Federal Reserve Banks.

 

Check/Check 21 Services

Check Adjustments Tip: Did you know the case submission requirements for the PAID ITYP changed?

July 15, 2015

Reminder - Case submission requirements for the Paid Item (PAID) investigation type (ITYP) have changed. New requirements include four new fields on the CA1000 (case open) message screen in the FedLine® access solutions and the Check Adjustments request form (PDF) . To help financial institutions comply with these changes, the Federal Reserve Banks have prepared a series of case scenarios (PDF) to illustrate how the changes apply to the submission process for a PAID ITYP adjustment request.

Please contact Customer Support at (877) 372-2457 if you have any questions.

Announcement

Case submission requirements for the Paid Item (PAID) investigation type (ITYP) have changed. To help financial institutions comply with these changes, the Federal Reserve Banks have prepared a series of case scenarios (PDF) to illustrate how the changes apply to the submission process for a PAID ITYP adjustment request. Please contact Customer Support at (877) 372-2457 if you have any questions.

 

Commercial check and ACH posting rule changes

July 15, 2015

On December 1, 2014 (Off-site Link), the Board of Governors of the Federal Reserve System announced changes to Part II of the Federal Reserve Policy on Payment System Risk. These changes are designed to enhance the efficiency of the payment system, to align posting times with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement. These changes will become effective July 23, 2015.  Below are a few changes that could impact your organization. Review the summary of changes (PDF) for more information.

Changes in posting times
FedACH® transactions

  • The morning posting time for FedACH debit transactions will change from 11:00 a.m. to 8:30 a.m. ET

Commercial Check transactions

  • Credits for deposits or returns of electronic items will post at 8:30 a.m., 1:00 p.m. and 5:30 p.m. ET. Items will post at the next posting time that is at least 30 minutes after deposit. Today these items post hourly beginning at 11:00 a.m. ET.
  • Debits for items presented or returned electronically will post at 8:30 a.m., 1:00 p.m. and 5:30 p.m. ET. Items will post at the next posting time that is at least 30 minutes after presentment. These items currently post on the clock hour one hour after presentment, but not before 11:00 a.m. ET
  • Credits for deposits or returns of Paper Checks will post at 8:30 a.m. ET and debits for checks presented or returns delivered as paper will post at 5:30 p.m. ET
  • A freeze period for customer changes will be in place from July 20 through July 28, 2015.

Changes to the daily Statement of Account
There will be a number of changes to the descriptions, definitions and posting times for many ACH and Check transaction codes. An updated Account Management Guide with the changes will be posted on June 23, 2015.

Managing your Master Account
If you have a Master Account, it is important that you monitor your intraday daylight overdraft balance to ensure that the Federal Reserve Policy on Payment System Risk changes do not result in unanticipated overdrafts. There are a number of tools available via the Account Management Information (AMI) application available through the FedLine® access solutions. Through AMI, you can view your real-time Daylight Overdraft Balance, view when transaction totals will be applied to your account in accordance with Payments System Risk posting rules and view daylight overdraft posting times associated with individual transactions.

We encourage you to share this information with others in your organization who may be impacted by these changes. This could include Accounting, Treasury Management, and Risk Monitoring staff, among others. If you use a processor, we encourage you to share this with them as well.

If you have any questions, please contact the following:

  • Accounting questions can be directed to your District’s Account Services contact
  • ACH questions can be directed to FedACH Customer Support at (866) 234-5681
  • Check questions can be directed to Check Customer Support at (877) 372-2457
  • Federal Reserve Policy on Payment System Risk changes can be directed to your local Credit and Risk Management contact

Announcement

On December 1, 2014 (Off-site Link), the Board of Governors of the Federal Reserve System announced changes to Part II of the Federal Reserve Policy on Payment System Risk. These changes are designed to enhance the efficiency of the payment system, to align posting times with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement. These changes will become effective July 23, 2015. Review the summary of changes (PDF) for more information.

 

Effective September 1, 2015, change in process for handling items drawn on retired routing numbers

July 15, 2015

The Federal Reserve Banks continually look for opportunities to improve the speed and reduce the risk associated with our FedForward® and FedReturn® services. Over the last 18 months we have instituted later deposit deadlines for forward and return items in an effort to move items through the collection and return cycle more quickly. We are now planning to change the way that we handle forward collection items drawn on officially retired routing transit numbers (RTNs).

Effective September 1,  2015, the Reserve Banks will return items drawn on retired RTNs directly to the bank of first deposit (BOFD) (or the depositing financial institution if there is no BOFD routing number in the 26 record) rather than flowing these items to the paying bank for subsequent return. This change will align our process with the industry, and will also result in these items usually being returned to the BOFD the same day that they are deposited with the Reserve Banks.

Once we make the change, we will begin using the industry standard return reason code 6: Retired/Ineligible RTN. We encourage you to verify that your systems will accept items using that reason code. We also encourage you to contact Accuity to obtain a quote to purchase a list of retired routing numbers or if you have a retired RTN that you would like to reactivate.

If you have questions, please contact Customer Support at (877) 372-2457 or your account executive.

Announcement

Effective September 1, 2015, the Reserve Banks will return items drawn on retired RTNs directly to the bank of first deposit (BOFD) (or the depositing financial institution if there is no BOFD routing number in the 26 record). Once we make the change, we will begin using the industry standard return reason code 6: Retired/Ineligible RTN. If you have questions, please contact Customer Support at (877) 372-2457 or your account executive.

 

Freeze period for Check Services

July 15, 2015

The Federal Reserve Banks will implement a freeze period for Check Services from July 20 through July 28, 2015. This freeze period is necessary to prepare for the upcoming posting rules changes effective July 23, 2015.

Key dates are:

July 17, 2015
Last day for implementations and changes

July 29, 2015
Window re-opens for implementations as well as all other changes

If you have questions, please contact Customer Support at (877) 372-2457.

 

New Check Adjustments informational webinar

July 15, 2015

Check Adjustments webinars are regularly updated to reflect the new enhancements, information and options available to your institution. New sessions, which build upon the previously available sessions, are also added on a regular basis.

Beginning this month, we will introduce a new complimentary webinar, Check Adjustments Informational Webinar – Paper Cash Letter Completion and Adjustment Resources. This one-hour webinar is intended to help you prepare paper cash letters correctly and familiarize you with the available resources for Check Adjustments, including detailed information on our current webinar offerings.

The Check Adjustments Informational WebinarPaper Cash Letter Completion and Adjustment Resources webinar will be available at 10:00 a.m. or 2:00 p.m. ET on the following dates:

  • July 30, 2015
  • August 27, 2015
  • September 3, 2015
  • September 29, 2015

Whether you are new to adjustments or have several years of experience, you can benefit from this session. It is always a good idea to consider taking a session again to refresh your knowledge, especially if it has been awhile since you originally participated. For more information about all of our webinars visit Federal Reserve Bank Events.

Announcement

Beginning this month, we will introduce a new complimentary webinar, Check Adjustments Informational Webinar – Paper Cash Letter Completion and Adjustment Resources. For more information about all of our webinars visit Federal Reserve Bank Events.

 

Check availability posted on fee schedules

July 15, 2015

Beginning July 23, 2015, all routing transit numbers (RTNs) are immediate at all deadlines unless deposited in a Deferred Mixed, Deferred Fine Sort or Dollar Cut deposit option. Availability can be found on the 2015 Check Service Fees.

 

Federal Reserve Banks to publish new FedReceipt® RTNs

July 15, 2015

New FedReceipt RTNs for FedForward® and FedReturn® Services deposits will be published the week of August 3, 2015. These lists will reflect changes to the FedReceipt lists that have occurred between July 1 and July 31, 2015. For more information, please visit the Check 21-Enabled Services Endpoint Tier Listings, where you can review the June 30, 2015 Summary of Changes to FedReceipt Routing Numbers (XLS).

 

FedACH® Services

Effective September 1, 2015, FedACH® Services to change process for pended files

July 15, 2015

As a means of improving operational efficiency, effective September 1, 2015, FedACH® Services will discontinue its practice of calling customers when their files pend. 

Each sending point has the ability to monitor its file status throughout the day and to contact FedACH Central Operations Support with instructions to either release or reject a pended file. 

As is the case today, any pended files remaining at the end of the processing day will automatically reject. Additionally, customers subscribing to the FedACH Risk® Origination Monitoring Service will continue to receive e-mail notifications of files pended by that service.

Customers using FedLine Advantage®, FedLine Direct® or FedLine Command® access solution can view file status via the FedLine Web® access solution. FedLine Command and FedLine Direct customers can also use electronic file acknowledgements. 

Instructions for viewing FedACH file status via the FedLine Web access solution

  1. Log in to FedLine® and proceed to the FedACH Services page.
  2. Select the Processing Summary link within the File Information category.
  3. Once on the Processing Summary screen, enter a process date (it defaults to the current date) and sending point ABA (if applicable), and click View List for the processing summary.
  4. At this point, you will see the status of your ACH files. If you have a Pended File or Pended Batch you will have to call the FedACH Central Operations Support line at (866) 234-5681 to instruct FedACH Services to either release or reject the pended file.  As is the case today, any pended files remaining at the end of the processing day will automatically reject. 

Receiving electronic file acknowledgements (APPLID)

  • If you are a FedLine Command or FedLine Direct customer and have not added electronic file acknowledgments, you can contact the Customer Contact Center (CCC) for the required syntax (command) to add to your backend system.

To prepare for the September change, we encourage FedACH customers not already doing so to begin monitoring file status as soon as they can reasonably incorporate this process into their daily operations. 

Additional questions can be directed to FedACH Central Operations Support or to your account executive.  Use the My FedDirectory® service to locate all of your institution’s Federal Reserve Financial Services contacts.

Announcement

As a means of improving operational efficiency, effective September 1, 2015, FedACH® Services will discontinue its practice of calling customers when their files pend. If you have any questions visit FedACH Central Operations Support or contact your account executive. Use the My FedDirectory® service to locate all of your institution’s Federal Reserve Financial Services contacts.

 

FedACH Feature: July ACH posting rule change and the FedACH Risk RDFI Alert Service

July 15, 2015

When the change to Automated Clearing House (ACH) posting times goes into effect on July 23, 2015, FedACH debits and credits will both post at 8:30 a.m. ET. 

No longer will there be a two-and-a-half -hour window to evaluate the funding needs of your institution’s Fed account between the posting of credits and debits. It will be more important than ever to keep watch for events that could negatively impact the account balance.

For the purposes of account management, there can be value in knowing that a large-dollar ACH debit is coming your way. Some very large-dollar ACH debits may simply be mistakes, caused for instance, by the originator keying the routing transit number into the dollar amount field or adding too many zeros at the end of the entry.

Although rare, large debit errors can be especially troublesome when processed in the overnight ACH cycles with debits posting simultaneously with credits in the morning. These errors may cause daylight, and even overnight, overdrafts if not addressed in a timely manner. 

The FedACH RDFI Alert Service can send email alerts to your staff whenever a debit of a designated size is sent in any of the four FedACH Services distribution files.

If the debit dollar value you specified in the RDFI Alert Service is met, the email alert is sent immediately following distribution of the file, meaning staff you designate will be alerted as early as possible, even if you use a processor or do not pick up or process files until later in the day. 

This alert timing could provide you with valuable time to return the item or to make important funding decisions. Both accounting staff and ACH operations staff may benefit from these early notifications of large debit amounts.

For more information on tools for managing your master account, please see the June 2015 FedFlash article "Commercial check and ACH posting rule changes". For more information on how the RDFI Alert Service can help, review the FedACH RDFI Alert Service page.

Announcement

When the change to Automated Clearing House (ACH) posting times goes into effect on July 23, 2015, FedACH debits and credits will both post at 8:30 a.m. ET. The FedACH RDFI Alert Service can send email alerts to your staff whenever a debit of a designated size is sent in any of the four FedACH Services distribution files. For more information on how the RDFI Alert Service can help, review the FedACH RDFI Alert Service page.

 

Commercial check and ACH posting rule changes

July 15, 2015

On December 1, 2014 (Off-site Link), the Board of Governors of the Federal Reserve System announced changes to Part II of the Federal Reserve Policy on Payment System Risk. These changes are designed to enhance the efficiency of the payment system, to align posting times with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement. These changes will become effective July 23, 2015.  Below are a few changes that could impact your organization. Review the summary of changes (PDF) for more information.

Changes in posting times
FedACH® transactions

  • The morning posting time for FedACH debit transactions will change from 11:00 a.m. to 8:30 a.m. ET

Commercial Check transactions

  • Credits for deposits or returns of electronic items will post at 8:30 a.m., 1:00 p.m. and 5:30 p.m. ET. Items will post at the next posting time that is at least 30 minutes after deposit. Today these items post hourly beginning at 11:00 a.m. ET.
  • Debits for items presented or returned electronically will post at 8:30 a.m., 1:00 p.m. and 5:30 p.m. ET. Items will post at the next posting time that is at least 30 minutes after presentment. These items currently post on the clock hour one hour after presentment, but not before 11:00 a.m. ET
  • Credits for deposits or returns of Paper Checks will post at 8:30 a.m. ET and debits for checks presented or returns delivered as paper will post at 5:30 p.m. ET
  • A freeze period for customer changes will be in place from July 20 through July 28, 2015.

Changes to the daily Statement of Account
There will be a number of changes to the descriptions, definitions and posting times for many ACH and Check transaction codes. An updated Account Management Guide with the changes will be posted on June 23, 2015.

Managing your Master Account
If you have a Master Account, it is important that you monitor your intraday daylight overdraft balance to ensure that the Federal Reserve Policy on Payment System Risk changes do not result in unanticipated overdrafts. There are a number of tools available via the Account Management Information (AMI) application available through the FedLine® access solutions. Through AMI, you can view your real-time Daylight Overdraft Balance, view when transaction totals will be applied to your account in accordance with Payments System Risk posting rules and view daylight overdraft posting times associated with individual transactions.

We encourage you to share this information with others in your organization who may be impacted by these changes. This could include Accounting, Treasury Management, and Risk Monitoring staff, among others. If you use a processor, we encourage you to share this with them as well.

If you have any questions, please contact the following:

  • Accounting questions can be directed to your District’s Account Services contact
  • ACH questions can be directed to FedACH Customer Support at (866) 234-5681
  • Check questions can be directed to Check Customer Support at (877) 372-2457
  • Federal Reserve Policy on Payment System Risk changes can be directed to your local Credit and Risk Management contact

Announcement

On December 1, 2014 (Off-site Link), the Board of Governors of the Federal Reserve System announced changes to Part II of the Federal Reserve Policy on Payment System Risk. These changes are designed to enhance the efficiency of the payment system, to align posting times with current operations and processing times and to strategically position the rules for future advancements in the speed of clearing and settlement. These changes will become effective July 23, 2015. Review the summary of changes (PDF) for more information.

 

FedLine® Access Solutions

Submit Subscriber requests via the EUAC Center

July 15, 2015

Effective August 16, 2015, the Federal Reserve Bank External Subscriber Request Form and the Subscriber Request Form for Armored Carriers will no longer be available on FRBservices.org. All Subscriber requests should be submitted via the End User Authorization Contact (EUAC) Center in FedLine® Home. Self-Service EUACs already have the ability to submit Subscriber requests via the EUAC Center. 

The EUAC Center is a FedLine application designed to streamline EUAC responsibilities and provide time-saving, self-service functionality to help make managing your EUAC duties easier. Features of the EUAC Center include the ability to:

  • Submit Subscriber requests (create, modify, renew, revoke/reissue and delete). Benefits of submitting Subscriber requests via the EUAC Center include:
    • Prepopulated profile information and access levels for existing Subscribers, reducing the amount of data you need to enter
    • The ability to create and save templates for Subscriber requests, which are especially useful for Subscribers with similar job responsibilities
  • Reset Subscribers' passwords
  • Access FedLine documentation, such as EUAC Access Management Guides, Subscriber Guides and Technical Setup Guides
  • Access Subscriber reports online, including the Event Tracker Report and the Subscriber and Roles Report

Additional benefits include:

  • Reduced calls to and from the Customer Contact Center (CCC)
  • Reduced turn-around time for Subscriber requests

If you have questions about the EUAC Center, please call the CCC.

Effective Date

August 16, 2015
After this date, the Federal Reserve Bank External Subscriber Request Form and the Subscriber Request Form for Armored Carriers will no longer be available on FRBservices.org. All Subscriber requests should be submitted via the End User Authorization Contact (EUAC) Center in FedLine® Home. Self-Service EUACs already have the ability to submit Subscriber requests via the EUAC Center. 

 

Treasury Services

The U.S. Treasury introduces myRA - A new starter retirement savings option

July 15, 2015

Financial institutions may see an increase in business customers who request split payroll direct deposits to fund myRA accounts, which are administered by Comerica Bank® on behalf of the U.S. Department of the Treasury. In December 2014, the U.S. Treasury introduced myRA, a Roth Individual Retirement Account (IRA) for people who lack access to employer-sponsored retirement savings plans. Individuals can now make after-tax contributions to their myRA accounts via regular payroll deductions. Additional funding mechanisms will become available in the future.

myRA accounts allow individuals to contribute from multiple jobs and are portable when individuals switch jobs. Contributions are invested in a U.S. Treasury savings bond that carries no risk of losing money and earns interest at the same rate as investments in the government securities fund available to federal employees. As with all Roth IRAs, the maximum annual contribution is $5,500 ($6,500 for those 50 and older), income limits apply and the after-tax contributions made to the account can be withdrawn at any time without a tax or penalty. Savers can contribute to their myRAs for 30 years or until their account balance reaches $15,000. When either of those limits is reached, savings will be transferred or rolled over to a private-sector Roth IRA, where individuals can continue to grow their savings.

For additional information and resources, please visit myRA.gov (Off-site Link).

myRA” is a service mark of the U.S. Department of the Treasury.

"Comerica Bank" is a trademark of Comerica Incorporated and its affiliates and subsidiaries.

Announcement

Financial institutions may see an increase in business customers who request split payroll direct deposits to fund myRA accounts, which are administered by Comerica Bank on behalf of the U.S. Department of the Treasury. For additional information and resources, please visit myRA.gov (Off-site Link).

 

Fifth District

Potential to receive alternative packaging on $1 and $5 notes from the Charlotte Office

July 15, 2015

Effective July 13, 2015, the Federal Reserve Bank of Richmond’s Charlotte Office began a limited duration field test of a currency processing machine that uses a new type of paper strap to secure 100 notes and clear bundle banding material to secure the 10 straps within the bundle.

You may receive bundles of $1 and $5 notes with this new type of paper strap around each 100 notes and a clear bundle band made of heavy weight plastic polymer. The paper straps will contain the same information as our current strap.

Below are images of the new strap and bundle material. We have also included an image of the information contained on the new strap for your reference.

Sample of New Bundles

Sample: New plastic polymer bundle material

Sample of New Strap

Sample: Strap image

Although you may receive bundles of $1 and $5 notes that utilize the new strap and bundle material, you do not need to take any action, but if you have any questions or comments, please contact the Charlotte Cash Services Department at (866) 418-5832.

Announcement

Effective July 13, 2015, the Federal Reserve Bank of Richmond’s Charlotte Office began a limited duration field test of a currency processing machine that uses a new type of paper strap to secure 100 notes and clear bundle banding material to secure the 10 straps within the bundle. If you have any questions or comments, please contact the Charlotte Cash Services Department at (866) 418-5832.

 

Eleventh District

Potential to receive alternative packaging on $1 and $5 notes from the Federal Reserve Bank of Dallas

July 15, 2015

Effective July 13, 2015, the Dallas Office of the Federal Reserve Bank of Dallas began a limited duration field test of a currency processing machine that uses a new type of paper strap to secure 100 notes and clear bundle banding material to secure the 10 straps within the bundle.

You may receive bundles of $1 and $5 notes with this new type of paper strap around each 100 notes and a clear bundle band made of heavy weight plastic polymer. The paper straps will contain the same information as our current strap.

Below are images of the new strap and bundle material. We have also included an image of the information contained on the new strap for your reference.

Sample of New Bundles

Sample: Two bands of plastic polymer bundle material

Sample of New Strap

Sample: Strap image

No action is required if you receive bundles of $1 and $5 notes that utilize the new strap and bundle material. However, if you have any questions or comments, please contact the Dallas Cash Services department at (214) 922-6815.

Announcement

Effective July 13, 2015, the Dallas Office of the Federal Reserve Bank of Dallas began a limited duration field test of a currency processing machine that uses a new type of paper strap to secure 100 notes and clear bundle banding material to secure the 10 straps within the bundle. If you have any questions or comments, please contact the Dallas Cash Services department at (214) 922-6815.

 

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FedFlash is your source for the latest Federal Reserve Financial Services operational news. Each bulletin keeps you informed of issues critical to your day-to-day operations, providing you with National and District updates regarding our products and services, processes, technical protocols and contact information.