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DALLAS — In accordance with Regulation CC requirements, El Paso area credit unions that had check processing reassigned to the Dallas office of the Federal Reserve Bank in May should have notified their checking account members by June 15 of a change in terms. San Antonio area credit unions have until August 10 to do the same. In early 2003, the Federal Reserve Board decided to reduce the number of locations at which Federal Reserve Banks process checks. In Texas, check processing was discontinued in El Paso on May 15 and will be discontinued in San Antonio on July 10. Check processing from both offices has been or will be reassigned to Dallas. Recently, the Federal Reserve Board issued amendments to Appendix A of Regulation CC implementing these changes. Appendix A provides a routing number guide that helps financial institutions determine the maximum permissible hold periods for most local and non-local deposited checks. As a result of these changes, some checks that are drawn on and deposited at financial institutions located in the El Paso or San Antonio check-processing regions that were formerly non-local checks will become local checks, said Suzanne Yashewski, Texas Credit Union League associate general counsel. These checks will then be subject to the faster or earlier local check availability schedules. “Credit unions in these regions are required by Regulation CC to provide a notice of change in terms to their members with checking accounts,” Yashewski said. “Section 229.18(e) of Regulation CC requires that financial institutions provide a notice to account holders within 30 days after implementing a change that improves the availability of funds,” or June 15 for El Paso area credit unions and August 10 for San Antonio area credit unions. Furthermore, credit unions in the affected regions may have to amend their availability schedules and Regulation CC disclosures depending upon current content. Revised disclosures would have to be given to members opening new checking accounts on or after the above dates. Yashewski recommended that credit unions check with their local counsel or forms supplier to determine whether availability schedules or Regulation CC disclosures need to be revised. The check processing reassignment should have little or no impact on credit unions located outside the El Paso, San Antonio and Dallas check processing regions, she said. However, most credit unions located in these check-processing regions will probably experience at least a slight increase in the number or percentage of local checks compared to non-local checks. -

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