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KleinBank supervisor finds value in Fed's Check Adjustment webinars for her entire team

May 2017

Cindy Schwartz, a Deposit Operations Supervisor at KleinBank (Off-site Link), oversees several groups at the family-owned, community bank, including the exceptions group in charge of check adjustments. Recently, Schwartz had her entire exceptions group attend the Fed’s Principles and Concepts of Image Cash Letters and Electronic Check Adjustments webinar for new and continuing training.

 “I received an email about the webinar and decided we needed training as a group,” Schwartz said. “We have one person who handles check adjustments, but wanted to add resources and have everyone be knowledgeable on the check adjustment process.”

The fee-based webinar is the same price for any number of attendees on a single connection, making it perfect for full team training. As an added bonus, all attendees can earn up to 3.6 Accredited Automated Clearing House Professional (AAP) credits and/or up to 3.3 National Check Professional (NCP) credits.

 

Learn from a Fed expert

Check adjustments expert Tracy Beauford hosts the webinar. She provides a basic understanding of how checks are cleared in an electronic file format, how subsequent errors occur and how to submit an electronic adjustment request and applicable documentation to resolve the error. A few of the important topics covered include:

  • Terminology
  • Workflows for Forward (FWD) and Returns (RTN)
  • Case Submission Requirements
  • Resources for Electronic Check Adjustments

“The facilitator was very knowledgeable. She explained things several ways so we could all understand the materials and constantly referred back to important facts she mentioned earlier in the webinar. Tracy had a great voice to listen to and kept us all included.”

Cindy Schwartz
Deposit Operations Supervisor
KleinBank

 

Understand upcoming changes

As announced in the April FedFlash®, the Federal Reserve Banks are making changes to check adjustment requirements and edits to eliminate several investigation types (ITYPs) and two message types (MTYPs). In addition, there will be a new deadline for receiving same-day entry or same-day acknowledgement for electronic adjustments. The webinar explains these changes in detail. “It was very helpful that Tracy talked us through the changes that are coming up,” Schwartz said. “She explained what we will or won’t need, what changes are happening and why.”

 

Ready to register for these value-packed webinars?

Do you want to experience the benefits of our Check Adjustments webinars? Register (Off-site Link) for the Principles and Concepts of Image Cash Letters and Electronic Check Adjustments webinar today. We also offer the Check Adjustments Insights into Investigation Types (ITYPS) (Off-site Link) webinar, which Schwartz and her team at KleinBank already have plans to attend! You can view event descriptions and register for webinars on our Federal Reserve Bank Events page. Be sure to bookmark the page as a favorite for future reference.

 

The Federal Reserve Banks do not sponsor or endorse any of the non-Federal Reserve Bank-related products, parties or entities discussed in this publication.

 

General

Hammer risk and cement customer relationships with our toolboxes

May 2017

Did you know the Federal Reserve Banks have services that can help you add value for your corporate clients and business banking customers? Could you use more tools to help you manage your institution’s risks related to payment processing?

We offer a variety of services to help our customers mitigate payments risk and provide services to their clients. Our FedACH®, Fedwire® and Check 21-Enabled services each offer informational tools, and we’ve pulled them all together into two resources: the Risk Management Toolbox and the Business Banking Toolbox.

If you have not yet toured our toolboxes, allow us to show you what they are all about!

Only have a minute? Quickly view our tools at a glance:

 

Risk Management Toolbox

The Risk Management Toolbox contains tools to assist operational risk, compliance and audit staff in:

  • Measuring and managing operational risks
  • Monitoring internal and external compliance or audit obligations
  • Constructing a strong risk management program

Take a peek inside the Risk Management Toolbox below. Do any of these common business challenges sound familiar? If so, start exploring how this toolbox can help.

Operational Risk Management Concerns and Tools

 

Business Banking Toolbox

The Business Banking Toolbox contains tools to assist treasury or cash management and business banking staff in:

  • Increasing the flow of information to clients
  • Helping to reduce payment risk for my institution and our customers
  • Offering services to enhance client relationships

The Business Banking Toolbox preview below shows some common business challenges. Do any of these issues sound familiar? If so, open the Business Banking Toolbox to see how it can help.

Tools for institutions that serve small to medium business customers

If this quick look hasn’t piqued your interest yet, take a look at a few of the Automated Clearing House (ACH) tools available in the toolbox:

ACH Services

 


Learn more

In addition to visiting the toolboxes, you can request that your account executive contact you directly about these tools. Here’s how:

 

 

The Risk Management Toolbox is not intended to provide business or legal advice, nor is it intended to promote or advocate a specific action, risk mitigation strategy, or product. Readers should consult with their own business and legal advisors. For complete information regarding the products and services outlined in this Risk Management Toolbox, including the related terms and conditions of use, please review the applicable Federal Reserve Bank Operating Circulars and Agreements.

 

General

Fed Facts: What is the federal funds rate?

May 2017

This week, the Federal Open Market Committee (FOMC) met for the third time in 2017. Given that interest in the FOMC peaks around this time, this month’s Fed Facts article will cover the federal funds rate and one of the mechanisms that the FOMC uses to conduct monetary policy.

The FOMC meets eight times per year and consists of seven governors, the president of the Federal Reserve Bank of New York and four rotating slots shared by the 11 remaining Federal Reserve District presidents. The Reserve Bank presidents who are nonvoting members (i.e. off-rotation) still attend all the meetings and offer policy input. Their agenda includes reviewing economic and financial conditions, determining the appropriate monetary policy stance and assessing the risks to its long-run goals of price stability and sustainable economic growth. Minutes of these meetings are typically released three weeks after the date of the policy decision. Read the Board’s press release (Off-site Link) for more information on the latest meeting.

2017 FOMC meeting schedule

  • January 31-February 1
  • March 14-15*
  • May 2-3
  • June 13-14*
  • July 25-26
  • September 19-20*
  • October 21-November 1
  • December 12-13*

*Meeting associated with a Summary of Economic Projections and a press conference by the Chair.

 

Federal funds target rate

Coverage of FOMC meetings typically focuses on the 12 voting members’ decision on whether to adjust the federal funds target rate. The federal funds rate is the interest rate at which depository institutions (DIs) trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a DI has surplus balances in its reserve account, it lends to other DIs in need of larger balances. In simpler terms, a DI with excess cash, also known as liquidity, will lend to another DI that needs to raise liquidity quickly.

The rate that the borrowing institution pays to the lending institution is determined between the two institutions. The weighted average rate for all of these types of negotiations is called the effective federal funds rate. The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target.

The federal funds rate is the central interest rate in the U.S. financial market. It influences other interest rates such as the prime rate, which is the rate that DIs charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer-term interest rates such as mortgages, loans and savings.

At this week’s meeting, the FOMC voted to keep the target range for the federal funds rate at 0.75 to 1 percent.



Effective federal funds rate

The graph below, published by the Federal Reserve Bank of St. Louis’ FRED Economic Data (Off-site Link), shows how the effective federal funds rate has changed over time.

Effective federal funds rate

Shaded areas indicate U.S. recessions


Open market operations

The Federal Reserve influences the effective federal funds rate through open market operations (OMOs) (Off-site Link). These operations help the effective federal funds rate reach the federal funds rate target by influencing the cost and availability of money and credit in the U.S. economy by buying or selling government securities to adjust reserve levels in the banking system. Section 14 of the Federal Reserve Act grants the Federal Reserve the authority to conduct OMOs.

The resulting investments from OMOs are held in the System Open Market Account (SOMA) (Off-site Link), which is managed by the Federal Reserve Bank of New York. These securities serve as collateral for U.S. currency in circulation or other reserve factors that show up as liabilities on the Federal Reserve System's balance sheet. They also serve as a tool for the Federal Reserve’s management of reserve balances and a store of liquidity in the event of an emergency need for liquidity.

The New York Fed was designated by the FOMC to execute OMOs on behalf of the entire Federal Reserve System. An FOMC appointee manages the SOMA portfolio. This appointee attends FOMC meetings to report on domestic operations and to stay aligned on the discussions leading to the committee's monetary policy directive.

 

Learn more

For more information, visit the Monetary Policy (Off-site Link) section of the Board of Governors website. You can also check out The Federal Reserve System: Purposes and Functions (Off-site Link) publication, which provides an overview of the Federal Reserve System, monetary policy and the structure and members of the Board of Governors.

 

SOURCE: Board of Governors of the Federal Reserve System (Off-site Link)

SOURCE: Federal Reserve Bank of New York (Off-site Link)

 

Events and Education

Fly away with us: Meet our Fed experts at upcoming industry events

May 2017

Most everyone marvels at the invention of the airplane, but the Fed’s frequent fliers especially appreciate this mode of travel during conference season! That’s because Fed experts will log an extraordinary amount of miles traveling to and from conferences all across the country. As you can see below, we have quite a few events to attend in May alone! Be sure to meet up with us at one of our locations this month.

 

EventDateLocation
Ohio Bankers League (OBL) CEO Symposium (Off-site Link) May 9-10 Columbus, OH
Jack Henry Gulf States User Group Spring Meeting (Off-site Link) May 9-11 Orange Beach, AL
NEACH Payments Management Conference (Off-site Link) May 10-11 Framingham, MA
Louisiana Bankers Association Annual Convention & Exposition (Off-site Link) May 10-12 New Orleans, LA
TRANSACT Powered by ETA (Off-site Link) May 10-12 Las Vegas, NV
Pennsylvania Bankers Association Annual Convention (Off-site Link) May 10-13 Marco Island, FL
New York Bankers Association Technology, Compliance & Risk Management Forum (Off-site Link) May 15-17 Tarrytown, NY
Colorado Bankers Association Annual Summit (Off-site Link) May 16-17 Denver, CO
Concepts East (Off-site Link) May 17-19 Hershey, PA
Mississippi Bankers Association Annual Convention (Off-site Link) May 17-21 Destin, FL
Alaska Credit Union League Annual Meeting (Off-site Link) May 18-20 Sitka, AK
UMACHA, FRPA and Federal Reserve Bank of Minneapolis Fraud Symposium (Off-site Link) May 19 Bloomington, MN
Oklahoma Bankers Association Leadership Forum & Annual Convention (Off-site Link) May 22-24 Norman, OK
UMACHA, FRPA and Federal Reserve Bank of Minneapolis Fraud Symposium (Off-site Link) May 23 Bemidji, MN
EPCOR Payments Conference – Spring (Off-site Link) May 23-25 Columbus, OH
Jack Henry Smoky Mountain User Group Conference (Off-site Link) May 24-26 Pigeon Forge, TN
Nebraska Credit Union League Annual Meeting & Convention (Off-site Link) May 31-June 2 Omaha, NE

We love engaging in these industry events to meet our customers, stakeholders and industry leaders. Stop by our booth to ask Fed experts any questions about our services or even the latest happenings in the efforts to improve the U.S. payment system. We are always eager to meet with you and discuss your needs. Be sure to check each conference’s agenda – there may even be a Fed speaker in the lineup. Join us in taking advantage of these industry events to gain priceless face-to-face time and learn the latest about what’s going on in the financial services industry.

 

The Federal Reserve Banks do not sponsor or endorse any of the non-Federal Reserve Bank-related products, parties or entities discussed in this publication.

 

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