Presentment and Settlement of Checks
December 30, 1998
Circular No. 11124

No Reduction to be Made in Legal Disparities Between Federal Reserve Banks and Private-Sector Banks

To All Depository Institutions, and Others Concerned, in the Second Federal Reserve District:

In March 1998, the Board of Governors of the Federal Reserve System requested comments on the implications of potential rule changes to reduce or eliminate legal disparities between the Federal Reserve Banks and private-sector banks in the presentment and settlement of checks (see Circular No. 11040). Based upon its analysis of the comments received, the Board has decided not to make regulatory changes with respect to the remaining legal disparities. The Board concluded that the costs associated with further reducing these legal disparities would outweigh any payments system efficiency gains.

The Board's official notice, as published in the Federal Register of December 14, is available as a file (pdf - 40kb). Any questions on this matter may be directed, at this Bank, to John F. Sobala, Senior Vice President.