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Operating Circular 2 References the Following Information

For more information, please review the updated Operating Circular 2.

Holiday Schedule (OC2 Section 2.4)

Holiday Schedule

Fit — Fitness Guidelines (OC2 Sections 2.13.2)

Fitness Guidelines (PDF)

De Minimis Exemption (OC2 Section 2.14)

The de minimis exemption is 875 bundles per quarter. The first 875 bundles of combined $10 and $20 denominations that an institution cross-ships in a given Federal Reserve Bank Zone or Sub-zone each quarter will not be subject to a recirculation fee. All or part of any de minimis exemption not used during a quarter will expire at the end of that quarter. The de minimis exemption may not be transferred from one Zone or Sub-zone to another. The exemption will be applied against the total volumes cross-shipped, not against each individual denomination.

The Federal Reserve will review the de minimis exemption on a periodic basis and may change it for business or policy reasons. Any changes to the de minimis exemption will be communicated at least 30 days in advance.

Recirculation Fee (OC2 Section 2.21)

The recirculation fee is based on Federal Reserve costs to receive, store, process and ship currency. It includes costs that are likely to vary with the volume of currency handled over time, including labor, equipment and supplies, as well as certain support costs like human resources. It excludes costs that Federal Reserve Banks would incur regardless of the volume handled, such as facilities, protection and other overhead costs. This fee will be the same for all Federal Reserve offices, reflecting national average costs. Reserve Banks will review the changes to these costs annually and may adjust the fee accordingly. Changes in fees will be announced 30 days in advance of the effective date of the change.

Sub-zones (OC2 Section 2.22)

Current Sub-zones are listed in the table below. Sub-zones are based on the combination of population and distance from a Federal Reserve Bank office and are defined in terms of metropolitan areas.1 The Federal Reserve will review Sub-zones and make changes as necessary. These changes will be announced 30 days in advance.

The Reserve Banks have established Sub-zones in metropolitan areas that are very large and/or very far from the nearest Federal Reserve Bank office. Federal Reserve Banks will monitor order and deposit activity for Sub-zones separately from order and deposit activity for the rest of the Zone. Billable cross-shipping activity will be calculated separately for Sub-zones than for the Zone in which the Sub-zone resides. The quarterly de minimis exemption and recirculation fee will be applied separately to cross-shipping activity in Sub-zones and Zones.

Metropolitan Statistical Area > 1000 Miles from Federal Reserve Bank with a population > 250,000

FedCash Services order and deposit Sub-zone information
Distance From FRB Metropolitan Statistical Area Federal Reserve Processing Office Population
as of April, 2000
2,387 Honolulu, HI San Francisco 876,156
1,448 Anchorage, AK Seattle 260,283

Metropolitan Statistical Area > 250 Miles from Federal Reserve Bank with a population > 500,000

FedCash Services order and deposit Sub-zone information
Distance From FRB Metropolitan Statistical Area Federal Reserve Processing Office Population
as of April, 2000
275 Las Vegas, NV Los Angeles 1,563,282
270 Albuquerque, NM El Paso 712,738
270 Central Florida
(Sarasota-Bradenton, Orlando, Tampa)
Jacksonville 4,630,517
278 South Texas
(McAllen-Mission, Brownsville-Harlingen)
San Antonio 904,690

Metropolitan Statistical Area > 125 Miles from Federal Reserve Bank with a population > 1,000,000

FedCash Services order and deposit Sub-zone information
Distance From FRB Metropolitan Statistical Area Federal Reserve Processing Office Population
as of April, 2000
125 San Diego, CA Los Angeles 2,813,833
270 Raleigh-Durham-Chapel Hill, NC Charlotte 1,187,941
156 Grand Rapids, MI Detroit 1,088,514

Metropolitan Statistical Area > 100 Miles from Federal Reserve Bank with a population > 1,500,000

FedCash Services order and deposit Sub-zone information
Distance From FRB Metropolitan Statistical Area Federal Reserve Processing Office Population
as of April, 2000
114 Indianapolis, IN Chicago 1,607,486
111 Columbus, OH Cincinnati 1,540,157

UCAP — UCAP policy and UCAP fees (OC2 Sections 2.23 – 2.24)

Zone (OC2 Section 2.27)

A Zone is a geographic area designated by the Reserve Banks. Zones, Sub-zones and cash depots2 are listed below. For the purposes of the Recirculation Policy, cash depots are considered separate Zones.

FedCash Services order and deposit Zone, Sub-zone and Depot location information by District
District Zone Sub-zone Depot
1st District Boston
2nd District New York
3rd District Philadelphia
4th District Cleveland Buffalo, Pittsburgh
4th District Cincinnati Columbus Louisville
5th District Richmond
5th District Baltimore
5th District Charlotte Raleigh-Durham-Chapel Hill, Charleston
6th District Atlanta Birmingham
6th District Jacksonville Central Florida
6th District Nashville
6th District New Orleans
6th District Miami
7th District Chicago Indianapolis
7th District Detroit Grand Rapids
8th District St. Louis
8th District Memphis Little Rock
9th District Minneapolis
9th District Helena
10th District Kansas City Omaha
10th District Denver
11th District Dallas Oklahoma City
11th District El Paso Albuquerque
11th District Houston
11th District San Antonio McAllen-Edinburg-Mission
12th District San Francisco Honolulu
12th District Los Angeles San Diego, Las Vegas
12th District Salt Lake City
12th District Seattle Anchorage Portland
12th District Phoenix

Covered Denominations (OC2 Sections 2.11, 3.4, Appendix 1 Sections 1.6, 1.9)

$10 and $20 denomination notes are covered by the Recirculation Policy and the Custodial Inventory Program. Recirculation fees will be assessed only on notes in these two denominations that are cross-shipped.

Cross-shipping Calculation (OC2 Sections 2.11, 2.12, 3.2, 3.3, Appendix 1 Section 5.7)

Cross-shipping occurs when an institution deposits fit currency and orders currency of the same denomination within the same business week (Monday-Friday) and within the same Federal Reserve Zone or Sub-zone.

The Federal Reserve monitors an institution's order and deposit activity for cross-shipping on a weekly basis. The Federal Reserve uses the average fitness rate to determine how much fit currency an institution deposited each week of the month. The Federal Reserve then compares the institution's weekly deposits of fit currency to its weekly orders of currency in the same denomination in the same Zone or Sub-zone to determine the amount of currency the institution cross-shipped.

The average fitness rate of an institution's deposits is the total number of fit notes of a given denomination detected in an institution’s deposits that are processed in a given Zone or Sub-zone in a given denomination, divided by the total number of notes processed for the institution in the same denomination in the same Zone or Sub-zone in that month.

For example, if Bank X deposits 1,000 $10 notes, of which 650 are fit notes, then Bank X’s average fitness rate for the $10 denomination would be 650/1000 = 65%. The Federal Reserve calculates a monthly average fitness rate by denomination and applies this average fitness rate to the institution's weekly deposits to determine fit deposits.

Fit Deposit Calculation Example

In the month of January, Bank X’s deposits of $10 notes to the Boston Federal Reserve were 65% fit. In the first week of January, Bank X deposited 500 bundles of $10 notes to the Boston Federal Reserve. Therefore, Bank X deposited 500 x .65 = 325 bundles of fit currency.

Cross-shipping activity is calculated on a weekly basis for each Zone or Sub-zone and is the lesser of fit deposits or orders by denomination.

Cross-shipping Calculation Example

If Bank X deposited 1,250 bundles of fit $20 notes in a Business Week and ordered 1,000 bundles of $20 notes the same Business Week, the amount cross-shipped is 1,000 bundles.

Cross-shipping activity is aggregated throughout a quarter for each Zone or Sub-zone in which the institution obtains cash services from a Federal Reserve Bank. A de minimis exemption of 875 bundles is applied to cross-shipping activity in each Zone or Sub-zone for each quarter. A recirculation fee is applied to the volume cross-shipped in excess of 875 bundles for each Zone or Sub-Zone.

To change an endpoint's designated Sub-zone or Zone

Endpoints are assigned to Sub-zones based on zip code. In order to change the Zone or Sub-zone designation for a particular endpoint, an institution must demonstrate to its servicing Federal Reserve cash office that based on proximity with a particular Zone/Sub-zone or an armored carrier run, the endpoint belongs in a different Federal Reserve Bank Zone/Sub-zone.

To add or remove an endpoint from a Sub-zone, complete the request form (PDF) and return it to your servicing cash office. You may choose the Zone or Sub-zone in which to include border endpoints.


If, in the sole judgment of the Reserve Banks, a depository institution circumvents the Recirculation Policy by reducing its cross-shipping volume without increasing recirculation, a recirculation fee may apply to such activity.

Examples of circumvention include instances where an institution consistently alternates the weeks in which it orders and deposits currency with the Federal Reserve, or an institution has one endpoint in a Zone order currency (for itself and another endpoint in another Zone) while another affiliated endpoint deposits currency on behalf of both endpoints in another Zone.


The Federal Reserve, at its sole discretion, may waive fees pertaining to cross-shipping activity during extraordinary events, which may include natural disasters, new note series introductions (involving Covered Denominations), specified holiday currency ordering periods and disasters at a specific location. Waivers of fees may apply to cross-shipping activity for a particular institution, for a particular Zone/Sub-zone or for multiple Zones, depending on the nature of the event. Waivers will be very short in duration, limited in scope and will affect only the denomination(s) and Zones or Sub-zones specified.

Waivers will be noted on the cross-shipping reports, which will show the specific cross-shipping activity being waived.

Institutions may request a fee waiver for cross-shipping activity if there is a disaster at one of their endpoints. An online request form will be available before recirculation fees go into effect and will be available on this website.

For more information about FedCash® Services processing and operations, visit the FedCash pages or consult your local FedCash Services contact.


1Census Bureau Ranking Tables for Metropolitan Areas: Population Change from 1990 to 2000, number PHC-T-3 (Off-site).

2A cash depot is an alternative market presence for Federal Reserve cash services. With a cash depot, the Federal Reserve contracts with a third party, usually an armored carrier, which acts as a secure collection point for Federal Reserve currency deposits from the region's depository institutions. The depot also distributes currency orders that depository institutions have placed with the Federal Reserve. The work of counting deposits and preparing orders is done by a Federal Reserve office in another city. The Federal Reserve pays for the transportation between the Reserve Bank office and the depot operator. The cash depot operator must meet security standards and follows strict procedures specified by the Federal Reserve.

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