To the Chief Executive Officers of Depository Institutions and Others Concerned in the Second Federal Reserve District:
The Federal Reserve Banks are amending their Operating Circular 3 ("OC3"), Collection of Cash Items and Returned Checks. In addition to several minor, technical changes, the amendments include three substantive additions to the coverage of OC3:
- FedImageSM Informational Services
- Electronic Adjustments and the Documents to Follow Archive
- Settlement and Adjustment Services for same day settlement
These services are not new. However, the amendments standardize the terms under which the Reserve Banks offer the services.
The following contains a brief summary of the revisions to OC3. This does not describe all of the provisions of the circular or provide complete detail on the revisions.
Changes in the body of OC3:
- In sections 2.1 and 6.1, new language prevents a sending
bank from sending any items to a branch of a Reserve Bank
that no longer processes checks.
- New sections 12.2 and 12.3 permit depository institutions
to make adjustment requests electronically (12.2) and to
submit copies of documents for storage in and retrieval
from the DTF Archive (12.3). These services are described
in greater detail in new Appendix H.
- New section 16.3(d) adds FedLine® for
the Web-Check to the permissible methods by which a payor
bank may request a Reserve Bank to send a notification of
non payment to a bank of first deposit.
- New language in section 19.8 makes it clear that the
sending bank, and not the Reserve Bank is responsible for
the proper preparation of a photocopy in lieu of a missing
or destroyed item.
- In section 19.9(c) reference to the former section 19.6(b)
has been deleted because that section was deleted from OC3
in a previous amendment.
Changes in Appendix F:
- Former section 4.0 has been deleted. This section described
the terms of our image services. Image services are now
covered by Appendix I, FedImageSM Informational
- A new section 4.8 has been added to provide for settlement
and adjustment services for SDS items. Some Reserve Banks
have been providing this service under separate agreements.
- A new sentence at the end of section 5.1 clarifies that
a Reserve Bank that provides SDS and adjustment services
does not thereby become a collecting bank with respect to
the SDS items.
- Under new language in section 6.1 a payor bank that obtains
settlement and adjustment services with respect to SDS items
indemnifies a Reserve Bank against the risk that a sending
bank might make a claim against the Reserve Bank as a result
of the settlement and adjustment services provided to the
- New language in section 1.1 of Appendix G expands the
coverage of FedLine® for the Web-Check to
include electronic adjustments and the DTF Archive.
- New Appendix H sets forth terms and conditions governing
the use of electronic adjustment services and the DTF Archive.
- New Appendix I sets forth terms and conditions governing
the FedImageSMInformational Service. Appendix
I supersedes any existing agreements for FedImageSM
The amendments will go into effect February 27, 2004. Please refer to the official current version of OC3 at www.frbservices.org/OperatingCirculars/index.html. From this website, you may read, download, and print the operating circular. To request a paper copy of an operating circular or for additional information about the revision to OC3, please contact your local Business Development representative at (888) 596-5471.
Business Development Representatives