Operating Circular No. 3 Revised
June 29, 2007
Circular No. 11877

Effective August 6, 2007, Operating Circular No. 3, Collection of Cash Items and Returned Checks, will be amended to include six technical changes:

  • Paragraph 3.1(f) is being changed to reflect the Reserve Banks’ policy that an item should not be sent to a Reserve Bank as a cash item if the item has been dishonored two or more times, regardless of whether the item was dishonored in paper form, as an electronic item, or as an automated clearing house (ACH) entry.

  • Paragraph 4 is being amended to clarify that a definitive security (or a coupon from such a security) may not be sent to a Reserve Bank, except as specifically permitted by the Federal Reserve Bank of New York, and that U.S. government securities may not be sent to a Reserve Bank but rather should be sent to the Bureau of the Public Debt.

  • Paragraph 20.1 is being changed to state specifically that a bank that seeks an adjustment from a Reserve Bank must send its adjustment requests to the Reserve Bank in accordance with the Reserve Bank’s instructions for submitting an adjustment request.

  • Paragraph 5.3 of appendix E1 and paragraph 4.3 of appendix E2 are being changed to clarify that Reserve Banks must receive an instruction to return no later than the hour and the day they specify as their cut-off for receiving such instructions.

  • Appendix D on the handling of Canadian items and foreign items has been rewritten to reflect the Reserve Banks’ current operational practices, under which Canadian items and foreign items are handled only by designated Reserve Bank processing offices. The new language also provides that these items are not deposited with a Reserve Bank until they reach an office designated to handle such items.

  • A new paragraph, 4.8, is being added to appendix G. The new paragraph provides that neither a Reserve Bank nor a paying bank may terminate an electronic receiver service on less than 20 banking days’ prior written notice. In addition, a paying bank may not request a significant change in such a service on less than 20 banking days’ prior written notice.

The amendments are effective August 6, 2007, and your continued use of Reserve Bank services on or after that date constitutes agreement to the new terms of the operating circular.

See the operating circulars page of the Federal Reserve Financial Services website for the official version of the amended operating circular. To request a paper copy of any operating circular, contact your Customer Contact Center.