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Canadian Check Collection Service User Guide
Thank you for choosing the Federal Reserve Bank of Atlanta's Canadian Check Collection Service.
The purpose of this guide is to assist you in using the Foreign Check Collection Service to process Canadian work. We hope you will find the handling of Canadian items to be a simpler process by using this guide.
Basic procedures for preparing and receiving Canadian work are outlined in this manual. If you have further questions concerning this service, we ask that you refer to the contact list.
Table of Contents
1. Set up
Prior to submitting Canadian checks to the Federal Reserve Bank, you must first register for this service.
2. Preparation
First, verify that all items bear only eight digits for the routing and transit number (RTN).
Then, sort the Canadian checks into the proper category according to whether they are denominated in U.S. or Canadian dollar.
According to the Canadian Payment Association, Canadian Postal Money Orders and other Canadian Government checks are not eligible to be deposited as a photocopy in lieu of the original item. Please see the adjustments section for more instructions on submitting Canadian Postal Money Orders and Government Items.
The Canadian vendor does not accept Postal Money Orders in excess of $999.99. PMO items greater than $999.99 will be returned to you by the Reserve Bank.
U.S. Funds Items
"U.S. FUNDS" or "U.S. DOLLARS" must be on the face of the item. This can be typed, preprinted or handwritten on the item. List the item on the U. S. Funds Canadian items cash letter form; retain a copy of the cash letter for your records. Cash letter forms are available for printing:
Canadian Funds Items
If an item does not state that it is in U.S. funds, you assume that it is drawn in Canadian funds. List the item on the Canadian funds cash letter form and retain a copy of the cash letter form for your records. Cash letter forms are available for printing:
Please verify the sorting of your work. The most common error made by a depositor is a Canadian funds item included in a U.S. funds cash letter, or the reverse.
Any item sent in the wrong cash letter type will be subject to a Cash Letter Correction fee or may be sent back to you as a return item with a return item fee charged.
Please provide a tape listing of the items along with your cash letter. A separate cash letter form must be submitted for Canadian fund items equal to or greater than $250,000.
3. Packaging and Forwarding to FRB Atlanta
Send all Canadian item cash letters directly to the Federal Reserve Bank of Atlanta at the following address.
US Mail, FedEx, UPS and other couriersFederal Reserve Bank of Atlanta
Attn: Check Department - Canadian
1000 Peachtree Street NE
Atlanta, Georgia 30309-4470
4. Deadlines and Availability2
The deposit deadline for processing all incoming Canadian cash letter deposits is 7:00 p.m. ET.
U.S. funds Canadian cash letters receive one-day deferred credit for the face value of the cash letter.
Canadian funds cash letters receive same-day (immediate) credit based on the total appearing on the cash letter and a debit entry reflecting the rate of exchange. This is calculated by using the current weekly Canadian exchange rate.
5. Fees
Refer to the latest Check Services fee schedule.
6. Exchange Rate
Weekly Canadian Exchange Rate
A weekly discount rate is updated every Friday morning by 8:00 a.m. ET. This rate is in effect for deposits received the following Sunday through Friday. The rate could change during the week if the Canadian economy fluctuates dramatically. This is very rare, but it does happen occasionally. Although Canadian fund items are deposited for the “face” value, the charge will reflect the exchange rate was applied.
Obtain the current weekly exchange rate online or call P: (877) 372-2457.
The exchange rate is only applied to Canadian funds cash letters.
Large Dollar Canadian Deposits
The dollar amount which qualifies as a Large Dollar Canadian Deposit is of value equal to or greater than $250,000. As a result, each Canadian fund deposit from a single customer within a cash letter equal to or greater than $250,000 must be submitted in a separate cash letter. Additionally, these deposits will receive a separate exchange rate that may differ from the weekly exchange rate published by the Reserve Bank.
7. Cash Letter Correction
To aid in the collection of Canadian checks and to reduce the number of avoidable returns and adjustments, FRB Atlanta will make every effort to correctly process forward items deposited in mismatched cash letters.
A Cash Letter Correction fee will be charged per item in addition to the appropriate forward collection fees. For information on fees, please see Check Services fee schedule.
The Federal Reserve Bank of Atlanta will make every effort to assist in expediting the collection of Canadian items and avoid return items through the Cash Letter Correction service. However, the Reserve Bank is under no obligation to correct cash letters and may, at its discretion, return such items. The Reserve Bank will not be liable if an item deposited in a wrong fund cash letter is not corrected for any reason.
8. Adjustments
A common error made by a depositor is a Canadian funds item included in a U.S. funds cash letter, or the reverse. Please verify the sorting of your work. Resolving these types of errors can be a lengthy process as we may have to deal directly with our Canadian vendor on a case-by-case basis.
Important: When submitting a cash letter adjustment on Canadian items, please supply the following information:
- A brief note explaining the error
- A copy of your Canadian cash letter forwarded to us for processing
- The cash letter credit date
- A copy of your statement
- Two copies of the front and the back of each item in question
Be certain to date your Canadian adjustment request and include a contact at your financial institution for us to call in case we have questions.
Photocopies in lieu of lost originals for Canadian Postal Money Orders and Canadian Government Items cannot be included in forward collection cash letters. The original check must be located and deposited in a separately sorted Canadian Cash Letter. If all options to locate the original check have been exhausted, then:
- File a paper adjustment or a FedLine® adjustment with Federal Reserve Bank of Atlanta.
- Log the adjustment as FRN (foreign) without entry basis
- Make the adjustment an information request
- In the comments write: “Need credit for Indemnified Canadian PMO Photocopy”
We will then submit this to our Canadian vendor who will present it to the government office for reimbursement. If it has not been paid, we will pass the credit to the depositor when credit is received from our Canadian vendor.
All other lost originals can be indemnified and forwarded back in your cash letter. Please place them in a carrier envelope.
See the below sample of a properly formatted indemnity statement:
Indemnity Statement Example
"This is a photographic facsimile of the original check which was endorsed by the undersigned and reported missing or destroyed while in the regular course of bank collection. All prior and any missing endorsements and the validity of this facsimile are hereby guaranteed, and upon payment hereof in lieu of the original check, the undersigned will hold each collecting bank and the payor bank harmless from any loss suffered, provided the original check is unpaid and payment is stopped thereon."
Signed ______________________________________
Bank Name __________________________________
Routing Number ______________________________
All adjustments are done on a without-entry basis.
9. Return Items
Returns received from the Canadian vendor are returned directly to the endorsing financial institution or to their District Federal Reserve office for forwarding to the depositing financial institution.
When accepting Canadian items for deposit, it is important to keep in mind that Federal Reserve Operating Circular No. 3 and Regulations CC and J do not apply to Canadian banks. For example, provisions regarding off premises presentment, payment, return, notice of nonpayment, adjustments and photocopies are not binding on Canadian banks. For more information, see Federal Reserve Operating Circular No. 3, Appendix D.
You will receive Canadian returns in one return letter containing both U.S. funds and Canadian funds. Please note that Canadian funds items will be returned at the current discounted value.
How your institution handles returns depends on the following reasons for return:
- Endorsement missing: Process the correct endorsement and re-deposit.
- NSF: Contact the drawee. Canadian, NSF items cannot be re-deposited.
- Canadian funds item sent to the Federal Reserve Bank of Atlanta in a U.S. funds cash letter: The endorsing bank should reprocess the item on a Canadian funds cash letter. The Canadian vendor will return the item at a discounted value, using the Canadian exchange rate in effect on the date of the return.
- U.S. item included in a Canadian funds cash letter: Discount was charged when the item was originally received and processed. The Canadian vendor will return the item at a discounted value, using the Canadian exchange rate in effect on the date of the return. The endorsing financial institution should redeposit the item in a U.S. funds cash letter.
- Photocopies without indemnity statement: The endorsing bank should locate the original item or indemnify the Canadian photocopy and re-deposit the item.
- Converted Canadian Item: Canadian checks are not eligible to be cleared as check 21 items- re-deposit the original item or an indemnified photocopy.
- Photocopy of a Canadian Postal Money Order or other Canadian Government Item: Photocopies(s) of Canadian Postal Money Orders or Government Items are not eligible to be processed through normal deposit options. If the original item(s) has been destroyed or is unable to be located, the item(s) must be handled through Adjustment channels.
The Atlanta office will not adjust your institution's account for discount rate differences when the deposit and return discount rates differ.
10. Atlanta Contacts
If you have any questions, concerns or problems about the Federal Reserve Bank's Canadian Check Collection Services including processing, adjustments and returns, you may contact Check and FedACH Services Customer Support at P: (877) 372-2457.
Footnotes:
1Both U.S. and Canadian funds items must be encoded for the face value. For Canadian funds items, credit is given for the full amount, followed by a debit for the discount.
2 On Canadian holidays, all cash letters will be deferred an additional day.
