Financial Update (October-December 1997)

Fed Standardizes Operating
Circulars for Institutions

T o accommodate interstate branching and the Fed's new account structure, the Federal Reserve issued an entirely new set of operating circulars to depository institutions in mid-October. The new circulars, which will become effective Jan. 2, 1998, provide uniformity across all Reserve Banks, making it easier for institutions to conduct business in multiple Federal Reserve districts.

The new circulars are designed to simplify the application of each Reserve Bank's operating requirements and standardize service agreements with customers across the nation. Several banking industry developments, including consolidation, new technological advances and interstate banking, prompted the move to standardize the circulars.

New Operating Circulars
  1. Account Relationships
  2. Cash Services
  3. Collection of Cash Items and Returned Checks
  4. Automated Clearinghouse Items
  5. Electronic Access
  6. Funds Transfer Through Fedwire
  7. Book Entry Securities Account Maintenance and Transfer Services
  8. Collateral
  9. Federal Tax Payments and Treasury Tax and Loan Depositoriesa
  10. Lending
  11. Net Settlement Arrangementsb
aThe effective date may be later than Jan. 2, depending on the date the U.S. Treasury adopts some pending revisions
bTo be issued in 1998
The Sixth District currently has 21 operating circulars. These are being replaced by 11 circulars that are uniform among all 12 Reserve Banks.

The new circulars reflect the fact that many of the financial services offered by the Reserve Banks are now national in scope, with fewer District-unique services. For the majority of institutions without interstate branches, the new circulars will not represent a significant change. In most cases, any existing agreements executed between a depository institution and the Atlanta Fed will remain valid. Banks must execute new agreements, however, for both the account relationships and lending circulars and submit them to their local Reserve Bank by Jan. 2.

For questions, contact the business development officer at the local Federal Reserve branch.

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