To All Depository Institutions and Others Concerned
in the Second Federal Reserve District:
The Federal Reserve Board has announced the approval of policy changes that seek to reduce the overuse of Federal Reserve Bank cash-processing services by providing incentives for depository institutions to recirculate currency among their customers.
The Reserve Banks estimate that the changes to the cash services policy could affect approximately 150 to 225 depository institutions with high-volume currency operations.
The changes are intended to reverse a shift by depository institutions away from traditional patterns of currency activity toward greater reliance on Reserve Bank cash processing. The Federal Reserve expects depository institutions to recirculate to their customers fit currency deposited with them and to deposit only excess or unfit currency with Federal Reserve Banks.
Additional information about implementation of the policy changes will be published soon on the Federal Reserve Financial Services website.