Birmingham Branch to Convert to Cash Depot

Financial Update
Vol. 19, No. 3,
Third Quarter 2006


Guynn Retiring
on Oct. 1

Booklet Imparts
Katrina's Lessons

Fed Holds Hearings on
Mortgage Practices

Atlanta Fed Conference
Spotlights Hedge Funds

New Brochure Touts
Bank Account Benefits

Birmingham Branch to
Convert to Cash Depot

Fed Reduces Exposure
to Daylight Credit

Fed Chair Speaks on
Energy Costs' Effects

Schools Gather to Discuss
Community Development

Bills Seek Tougher
Data Security

Fed Gov. Bies Addresses
Mortgage Markets

Olson Resigns Fed to
Lead Pension Board


Data Bank

Circular Letters


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Birmingham Cash Depot On Track for October Opening

Loomis Fargo Truck
The Atlanta Fed is on schedule to initiate a cash depot in Birmingham. As previously announced, the Birmingham Branch's cash processing operation will be discontinued after the close of business on Sept. 29 and converted to a cash depot arrangement beginning Oct. 2. The transition should have minimal impact on depository institutions that now process currency and coin through the Birmingham Branch.

Depot to heighten efficiency
A cash depot is an alternative market presence for Federal Reserve currency services. With a cash depot, the Federal Reserve contracts with a company—Loomis Fargo, in this case—that acts as a secure collection point for currency deposits and a secure distribution center for currency orders that depository institutions place with a Reserve Bank, which is Atlanta in this instance.

Birmingham cash depot announcement

The Federal Reserve pays for the transportation between the Birmingham depot and Atlanta. Credit for deposits is passed to depository institutions upon receipt and bulk verification at the depot, and the charge for orders does not occur until the day that orders are picked up from the depot. Depository institutions are assessed no additional fees for using the depot.

Atlanta cash office to count deposits, prepare orders
Loomis Fargo, a privately held company, will operate the depot under a contract with the Atlanta Fed. The Bank's Atlanta cash operations will assume the duties of counting deposits and preparing orders for Birmingham-area customers, which include depository institutions throughout Alabama, except for the southern counties that are served by the New Orleans Branch.

One of the only changes resulting from the transition to a depot is an adjustment in the time by which currency and coin orders must be placed. Financial institutions served by the Birmingham Branch have received information describing those changes.

In June 2005, the Reserve Banks' Financial Services Policy Committee approved the plan to convert the Birmingham cash operation to a third-party depot arrangement serviced out of Atlanta. The Federal Reserve already uses several cash depots in other parts of the country.