Regional Roundup

Fed To Use Strap Imaging for Currency Processing

The St. Louis Fed will begin transitioning to currency strap imaging Aug. 18 for currency processing.

Currently, when a difference is found in a depository institution’s (DI) deposits, the Fed returns the straps that were wrapped around the bundles of 100 notes. Soon, the Fed will begin using image capturing to send pictures of the straps back to DIs along with advices when a difference is found.

All Reserve banks are transitioning to currency strap imaging. During this period, you could see a day's delay in receiving cash difference advices for a short period of time, and may receive combinations of original currency straps and printed images until our systems are fully converted.

The depositor information required on the strap by Operating Circular 2 (OC2) remains unchanged; however, this information must be readable from a printed image.

New Fed Pricing Policy for Carrier Documents Effective Aug. 1

The Federal Reserve will modify the pricing on forward collection and return items in carrier documents, effective Aug. 1. Specifically:

• Any qualified return item cash letter containing carrier documents will be reclassified as unqualified (raw) returns, with associated pricing and availability.
• Forward collection machineable cash letters containing carrier documents will be charged an additional $0.02 per item on each item in the cash letter.  This fee is in addition to the published fees.
• The fee for items in carrier documents contained in machineable cash letters that fail image quality assurance (IQA) will be increased to $10 per item from $4.

Financial institutions should be aware that Operating Circular 3 (OC 3) imposes the risk of loss on an institution that sends a carrier item to a Reserve bank in a mixed cash letter and indemnifies the Reserve banks against any resulting loss.  Carrier documents should continue to be used for photos-in-lieu and items with attachments. These items should be deposited in a non-machineable cash letter (for forward collection) or an unqualified (raw) return cash letter. For more information, see www.frbservices.org.

Fed’s Memphis Branch Offers Tennessee Consumers Info on Predatory Lending

A new consumer brochure on predatory lending and the Tennessee Home Loan Protection Act is available from the St. Louis Fed’s Memphis Branch. The brochure explains predatory lending and the provisions of the law in easy-to-understand terms. 

Generally, the Tennessee Home Loan Protection Act imposes prohibitions and limitations on high-cost home loans. Lenders and mortgage brokers are prohibited from engaging in activities such as:

• knowingly or intentionally making a high-cost loan to a borrower within 30 months of an existing home loan when there is no reasonable benefit to the borrower;
• financing single-premium credit insurance policies in excess of $50,000;
• making a loan that a borrower cannot reasonably repay, considering the borrower’s obligations other than the borrower’s equity in his or her home; and
• directly or indirectly financing points and fees that exceed 3 percent of the total loan.

These are just a few of a long list of restrictions outlined in the brochure. To obtain copies or for more information, e-mail Teresa Cheeks of the Fed’s Memphis Branch or call her at 901-579-4101.

State Quarter Program Completed in 2008

Since 1998, the U.S. Mint has released coins commemorating the 50 states. Each has a unique design pertaining to its state. The program ends this year, with the release of the coins for Oklahoma, New Mexico, Arizona, Alaska and Hawaii.  

Meanwhile, the Mint’s Presidential $1 Gold Coins program is well under way. (The John Quincy Adams coin is the latest one released as of this story’s publication.) Next year, the Mint plans to commemorate the bicentennial of Abraham Lincoln’s birth and the centennial of the penny through the Lincoln One-Cent Redesign. Four redesigned pennies are planned to be released in 2009.