Our bank has six offices, all located within the Milwaukee area.

In our reg cc disclosure, we define a local check being a check drawn on an institution in the state of Wisconsin.

We define a non-local check being a check drawn on an institution outside the state of Wisconsin and therefore may have a five business day hold.

I thought reg cc stated that a local check is a check payable at or through a bank located in the same geographic region served by an office of a Federal Reserve Bank (or something like that).

We've had our definition of local and non-local check in our disclosure and policy for years. It has never been questioned by an examiner.

But now I'm making some changes and was wondering if our policy is too limiting? Do we have to treat some checks drawn on banks located outside Wisconsin as local depending if they are in the same geographic region?

Our policy applies to personal checks, payroll checks, etc. Social security checks, Fed. reserve checks, state government checks, etc. are all available the next business day.

Tim,
You should be following Reg CC's Appendix A to Part 229--Routing Number Guide to Next-Day Availability Checks and Local Checks. (See Alphabet Soup: Reg CC on this site). The regulation tells you what checks may be considered loacal and non-local, and it has to do with your Federal Reserve District more so than your state.
Leslie

OK, I have the appendix.

Do we have to treat every check with a routing number from the seventh district as local? ie., checks with routing numbers from the Chicago office, the Detroit branch, the Des Moines office, the Indianapolis office and the Milwaukee office.

Or do we only treat the checks with routing numbers from the Milwaukee office as local?

All of our branches are located within the Milwaukee office location.

I ask this because I've seen other disclosures from much larger banks that spell out exactly which checks with which routing numbers are considered local depending on which state and branch the checks are deposited into.

One such explanation they give states that if a deposit is made to a branch in Wisconsin, the check is considered local if the first four digits of the routing number are 0750, 0759, 2750 or 2759. These are the four listed under the Milwaukee office in the appendix.

If all of your offices are located in the Milwaukee check processing region, then you only have to include in your "local check" definition checks drawn on banks located in that region, which generally includes banks with the four "first four" digits you listed. It also includes "payable thru" checks with any of the four "first four" printed on their checks.

You may expand your local check definition to include all Wisconsin banks if you wish, but if any banks outside WI are included in the Milwaukee processing district, you'll have to included them, too.

Tim,
I don't know if this will help you or not, but by way of example: my Bank is part of the Richmond Fed. The R&T numbers from the Baltimore Branch of the Richmond Fed are 0520 0521 0522 0540 0550 0560 0570 2520 2521 2522 2540 2550 2560 2570, and checks with these numbers are the ones we define as local items.
Leslie

John, Leslie, thanks for your help. This clears up pretty much everything for me.

Tim - when you start thinking that something "clears up" Reg CC for you, start worrying. It's an enigma wrapped up in a quandary, enveloped by a quagmire!

An enigma, wrapped up in a quandry, enveloped by a quagmire? Reg CC isn't that clear! Just kidding, I really love that Reg. NOT!

It's Friday and 4:30 in Milwaukee, the beer is flowing somewhere in this city, the lakefront festival season is starting soon.

With any luck, anything I learned about Reg CC today will soon be forgotten.

Tim - I'll take Reg CC over HMDA, RESPA, and the data reporting for CRA ... ANY DAY!!!

Seriously though, it is important that your staff understands how to correctly describe a local vs. a non-local check.

I was at the ATM machine of a "Supermarket" branch of a bank, and I overheard an angry customer arguing with the teller about a hold placed on a check. The customer was arguing that the teller told him a 5 day hold was being placed on the check because it was "Out of State", and the customer's argument was "The check was in California!"

Just so you know, California is divided into two check processing regions, so we have to always pay attention to that routing number to know when the check is "local" vs. "non-local."