31 C.F.R. Subpart B—Procedures for Qualification
Title 31 - Money and Finance: Treasury
(a) Organizations eligible to apply for qualification and to serve as paying agents are commercial banks, trust companies, savings banks, savings and loan associations, building and loan associations (including cooperative banks), credit unions, cash depositories, industrial banks, or similar financial institutions which: (1) Are incorporated under Federal law or the laws of a State, territory or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; (2) In the usual course of business accept, subject to withdrawal, funds for desposit or the purchase of shares; (3) Are under the supervision of the banking department or equivalent authority of the jurisdiction in which they are incorporated; and (4) Maintain regular offices for the transaction of business. (b)(1) An organization that desires to redeem securities must first qualify as a paying agent. An organization that has qualified and is serving as a paying agent must: (i) MICR-encode data on securities accepted for payment, (ii) Submit them directly to the Check Department of the appropriate Federal Reserve Bank or Branch or the Regional Check Processing Center, and (iii) Receive payment of fees by ACH, or arrange to obtain one or more of these services from another financial institution. (2) All presenting institutions, as defined in §321.1, must qualify as savings bond paying agents and enroll in EZ CLEAR. [53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10536, Mar. 4, 1994] (a) Execution of application-agreement. An eligible organization wishing to act as a paying agent shall obtain from, execute, and file an application-agreement with the appropriate Federal Reserve Office referred to in §321.25. The terms of each application-agreement shall include a reference to the following provisions to which paying agents are subject: (1) The provisions prescribed by section 202 of Executive Order 11246, entitled “Equal Employment Opportunity”, as amended (42 U.S.C. 2000e note); and (2) The provisions of the Privacy Act of 1974, as amended (5 U.S.C. 552a), and regulations issued pursuant thereto (31 CFR part 1, subpart C). For the purpose of these regulations, eligible institutions in Puerto Rico and the Virgin Islands shall make application to the Federal Reserve Bank Branch in Buffalo, New York and eligible institutions in Guam shall make application to the Federal Reserve Bank of Kansas City. (b) Qualification. Each Federal Reserve Bank referred to in §321.25, as fiscal agent of the United States, is authorized to qualify any eligible organization, located in the Reserve Bank's geographical area, as shown in §321.25, which possesses adequate authority under its charter to act as paying agent. Upon approval of an application-agreement, the Bank will issue a certificate of qualification to the organization. Such a certificate automatically qualifies the branches of the organization to redeem securities as provided in this part. (c) Announcement of authority. Upon receipt of a certificate of qualification from a Federal Reserve Bank referred to in §321.25, a financial institution may announce or advertise its authority to redeem eligible securities for cash and to process eligible Series E and EE savings bonds and savings notes presented for redemption in exchange for Series HH savings bonds under the provisions of Department of the Treasury Circular, Public Debt Series No. 2–80 (31 CFR part 352). (d) Adverse action. An organization will be notified by the appropriate Federal Reserve Bank referred to in §321.25, in writing, if its application-agreement to act as paying agent is not approved. [53 FR 37511, Sept. 26, 1988, as amended at 55 FR 35395, Aug. 29, 1990; 59 FR 10537, Mar. 4, 1994; 63 FR 38042, July 14, 1998] Institutions qualified as paying agents under previous revisions of this Part are authorized to continue to act in that capacity without requalification. By so acting, they shall be subject to the terms and conditions of their previously executed application-agreements and these regulations in the same manner and to the same extent as though they had requalified hereunder. (a) By the Treasury. The Secretary of the Treasury, or a designee, may authorize a Federal Reserve Bank referred to in §321.25 to terminate the qualification of any paying agent at any time, following prior written notice of such action to the agent. (b) At request of paying agent. A Federal Reserve Bank referred to in §321.25 will terminate the qualification of a paying agent upon its written request, provided the agent renders a final accounting for all redeemed securities and is found to have fully complied with the terms of its agreement and the applicable regulations and instructions. (c) Reservation. Termination of the qualification as paying agent of any institution shall not prejudice the right of the Treasury to recover the amounts of any erroneous payment(s) made by the institution. [53 FR 37511, Sept. 26, 1988, as amended at 59 FR 10537, Mar. 4, 1994]
Title 31: Money and Finance: Treasury
PART 321—PAYMENTS BY BANKS AND OTHER FINANCIAL INSTITUTIONS OF UNITED STATES SAVINGS BONDS AND UNITED STATES SAVINGS NOTES (FREEDOM SHARES)
Subpart B—Procedures for Qualification
§ 321.2 Eligible organizations.
§ 321.3 Procedure for qualifying and serving as paying agent.
§ 321.4 Paying agents previously qualified.
§ 321.5 Termination of qualification.
