Cash Letter Deposit Service Guide

Transcription

1 Cash Letter Deposit Service Guide July 2005

2 Table of Contents Cash Letter Deposit Service Overview...3 Introduction...3 Cash Letter Pre-Encoded Deposit Workflow...4 Cash Letter Un-Encoded Deposit Workflow...5 Cash Letter Glossary of Terms...6 Cash Letter Deposit Service Setup Requirements...7 Guidelines and Responsibilities...8 Cash Letter Deposit Customer Service...11 Cash Letter Deposit Preparation Procedures...12 Procedures for Preparing a Pre-Encoded Cash Letter Deposit with More Than 250 Checks...14 Sample Pre-Encoded Cash Letter Deposit with 700 items...15 Procedures for Preparing an Un-Encoded Cash Letter Deposit with More than 100 Checks...16 Sample of Un-Encoded Cash Letter Deposit with 250 Checks...17 Cash Letter Adjustment Requests...18 Special Procedures for Correspondent Banks...19 Ordering Cash Letter Deposit Supplies

3 Cash Letter Deposit Service Overview Introduction Eastern Bank's Cash Letter Deposit Service is used by Eastern depositors who submit a high volume of checks (greater than 500 a month). These deposits are delivered directly to Eastern Bank's processing site at 195 Market Street, Lynn, MA There are two types of Cash Letter deposits: Pre-Encoded and Un-Encoded. Pre-Encoded deposits are encoded by you* at your site or processor and prepared in a specified manner with certain control documents that will be detailed later in this guide. When the checks are delivered to Eastern in compliance with requirements set forth in this Service Guide, they are ready for processing on Eastern's reader/sorter machines. There is a limited amount of preparation required by Eastern. Checks that have been pre-encoded receive expedited processing, thereby eliminating the time delays and fees associated with this function. Pre-Encoded Cash Letter Deposit Key Features Less preparation by Eastern Bank means less cost to you. Improves your availability of funds. Allows for increased flexibility in drop off time to Eastern s Item Processing site. Un-Encoded deposits have not been encoded by you, but are prepared in a specified manner with certain control documents that will be detailed later in this guide. Un-Encoded Cash Letter Deposit Key Features Eliminates the need for encoding equipment at your site or processor. Eliminates the need for additional staff to encode items at your site. Deposit preparation time at your site is reduced. *The terms "you" and "your" in this Service Guide refer to the Customer that entered into the Cash Management Services and Cash Letter Deposit Service Agreement with Eastern. All references to "we," "us," "our" and "Eastern" refer to Eastern Bank 3

4 Cash Letter Pre-Encoded Deposit Workflow Pre-Encoded This sample flowchart provides a quick overview of a Pre-Encoded Deposit scenario. This sample does not reflect all possible scenarios but is intended to provide a general understanding of the process for new users. Pre-Encoded Deposit Workflow Checks are MICR encoded by your staff or processor. 1) Batch tickets, 2) deposit tickets and 3) batch listings are prepared and packaged with the checks for delivery to Eastern. The Correspondent arranges for delivery to Eastern Bank s Item Processing Site. Items are processed and your account is credited. 4

5 Cash Letter Un-Encoded Deposit Workflow Un Encoded The sample flowchart provides a quick overview of the Un-Encoded Deposit scenario. This sample does not reflect all possible scenarios but is intended to provide a general understanding of the process for new users. Un-Encoded Deposit Workflow You prepare your un-encoded deposit. You package the 1) deposit slip, 2) batch tickets, 3) adding machine tapes along with the checks. Then arrange delivery to Eastern Banks Item Processing Site. Checks are delivered to Eastern s Item Processing for encoding and processing. Checks are encoded, processed and your account is credited. 5

6 Cash Letter Glossary of Terms You must accurately prepare Cash Letter deposits in compliance with the procedures contained in this Service Guide. In order to further your understanding of these procedures we have included the following definitions. Batch - A batch is a unit of check processing volume. Specific batch requirements are documented later in this Service Guide. Yellow Batch Header- A control document that is used to indicate the beginning of each batch. Document Carrier - A document carrier is a clear plastic envelope used for holding a damaged or weakened deposited item. If you are a Pre-Encoded Cash Letter customer, the routing transit number and amount should be encoded on the outside of the document carrier. Please see note below regarding non-imageable items*. Encoding Correction Label - A label placed over the amount field of a deposited item that has been encoded incorrectly. The label is placed over the incorrect encoding and is re-encoded by you with the correct amount on the label. Pre-Encoded Cash Letter - A deposit submitted to Eastern Bank, which has been previously encoded by customer. Tray - A tray is a cardboard container used to transport a deposit with more than 3,000 checks. You can purchase these trays from supply vendors. Un-Encoded Cash Letter - A deposit submitted to Eastern Bank that has not been previously encoded by customer and requires additional preparation by Eastern Bank prior to processing. *Note: Deposit guidelines as part of Check 21 and set forth by the federal Reserve Bank for non-imageable items which includes any items in a document carrier, must be deposited in a separately sorted forward or return cash letter. Failure to do so will result in the depositor assuming all liabilities for losses that result. 6

7 Cash Letter Deposit Service Setup Requirements Standard Setup Requirements An Eastern Bank Treasury Services Specialist will guide you through the Cash Letter Deposit Service setup process and will provide all of the agreements and forms required. Setup includes the items listed below. Agreements and Setup forms All required agreements and setup forms must be fully executed, and on file at Eastern Bank. Cash Management Services Agreement - This agreement sets forth the terms and conditions for using Eastern s Cash Management services. Application for Cash Letter Service This agreement is used to collect the necessary information to set you up for the Cash Letter Deposit Service as well as set forth additional terms and conditions for the Eastern Cash Letter Deposit Service. Additional agreements and forms as applicable. Commercial DDA An Eastern Bank Demand Deposit Account (DDA) number for deposits. If you currently do not have a business checking account at Eastern, a Treasury Services Specialist will assist you. Contact Information A contact name, location or store address(es), tax ID(s) and corporate address for adjustment notifications. Courier Information Contact information regarding your contracted carrier as your agent to deliver deposits to Eastern s Item Processing Site. Deposit Tickets* A standard order of 200 deposit tickets will be provided to you prior to your first deposit. Re-orders can be made through your Treasury Services Specialists. *A note about deposit tickets- Eastern requires testing of any deposit tickets produced by vendors other than Deluxe. It is recommended that before your printer produces an entire order, a sample of 25 newly printed deposit tickets be forwarded to your Treasury Service Specialist. These samples should be sent to Eastern at least one month prior to usage. We will test the sample deposit tickets to determine whether the MICR line is readable and all specifications have been satisfied. In the event that the MICR quality is deemed unacceptable, deposit tickets must be reprinted and retested. Please schedule enough lead time to allow for testing and the possibility of reprinting and retesting. You must have a confirmation that your deposit tickets meet our specifications before they can be used at Eastern. 7

8 Guidelines and Responsibilities Start Date and Training Eastern will work with you to determine a mutually agreeable start date for when you may begin using the Cash Letter Deposit Service. At your request, a Treasury Service Specialist is available to help train your staff on the proper operating procedures for the Cash Letter Deposit Service. Please allow at least two weeks lead-time. Preparation and Processing You must accurately prepare Cash Letter deposits in accordance with the requirements set forth in this Service Guide. You will bear sole responsibility for the proper, accurate and complete preparation, reconciliation, delivery and encoding, if applicable, of all checks to be deposited at Eastern. Eastern shall not be liable for any costs or damages incurred by you or by any other person in connection with cash letter deposits that were improperly prepared or erroneously prepared by you prior to or in connection with delivery to Eastern. You agree to put in place such security procedures and controls as shall be necessary from time to time to ensure the integrity and security of your processes to prepare, document and submit to Eastern for processing your check deposits. You bear the loss in connection with the following: any deposit that is lost in transit or otherwise, any item that is damaged or destroyed, and cannot be reconstructed due to your failure to maintain copies of each preencoded item deposited, the adding machine tape for each preencoded item deposited, the adding machine tape for each batch and all other supporting documentation for the required time period. Your failure to maintain adequate backup releases Eastern from any liability if we are unable to process and / or collect on the deposits. Eastern will receive your Cash Letter Deposits at our Item Processing site. Eastern will credit your DDA (s) for all applicable items deposited and submit the items for collection. Eastern will assign availability for the items in the deposit according to your pre-determined availability schedule. Eastern will process exception items, including returns and adjustments if applicable. 8

9 Guidelines and Responsibilities Delivery Record Keeping and Reporting You will arrange for and bear sole responsibility for the safe and secure delivery of your Cash Letter deposit to Eastern s Item Processing Site or a mutually agreed upon third party processor. Eastern shall have no liability in connection with any deposits that are delivered to a location other than the predetermined designated site. You must keep a copy of each Pre-Encoded item deposited, the adding machine tape for each batch and all other supporting documentation for no less than 30 banking days and until the deposit has been reconciled by you. This will aid in reconstruction of the deposit should the original deposit be lost in transit or otherwise. Eastern will provide information regarding deposited items and related transactions in the form of DDA statements, paper advices and electronic information reporting (if you subscribe to this reporting service). Supplies You should order and maintain an appropriate supply of control documents such as document carriers and encoding correction labels to assist in proper processing of pre-encoded checks. Eastern will provide you with an initial supply of batch tickets, subsequent supplies can be ordered at no additional cost. If you choose to order your Cash Letter deposit supplies through Eastern, your Treasury Service Specialist will order your initial supply of deposit tickets. Details on ordering supplies can be found in the Ordering Cash Letter Deposit Supplies section of this guide. You are required to use deposit tickets that meet the requirements specified by Eastern. If supplies are ordered from a source other than Eastern, they must tested to ensure that they meet our requirements. 9

10 Guidelines and Responsibilities Discrepancies and Liability You must report all deposit discrepancies, missing deposits, or errors within 30 days of original deposit date. You agree that Eastern shall be the final arbiter of any discrepancies in dollar amount, dollar totals or batch check counts between the figures submitted by you and those calculated by Eastern. Eastern's final count shall be conclusive and binding. You agree that Eastern shall have no liability to you in connection with any cash or other non-check items that may be contained as part of cash letter deposit that is delivered to Eastern's Item Processing Site. You agree to indemnify, defend and hold Eastern harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind (including reasonable fees and disbursements of counsel) incurred by Eastern as a result of or in connection with your breach of any of your obligations to Eastern in connection with the Cash Letter Deposit Service set forth in this Service Guide. Maintenance of Equipment You are solely responsible, at your expense, for providing, repairing, servicing and maintaining any and all terminal devices, communication modems, data input devices, storage equipment, transmission devices and any other equipment and/or software necessary or appropriate for you to utilize the Cash Letter Deposit Service (including encoding equipment, if applicable) 10

11 Cash Letter Deposit Customer Service Customer Service Contacts Treasury Services Specialist A Treasury Services support number and hours of operation will be provided to you during the implementation of the Cash Letter Deposit Service. You should contact your Treasury Services Specialist for all of the following requests: To request information on deposit preparation procedures To submit any issues or cash letter corrections To receive any additional supplies To request information on MICR encoding problems To test deposit tickets when a new order is received from your vendor (non-eastern vendors only) Any other questions or requests Item Processing Department The Item Processing Department should be contacted after 5:00 PM if you have any issues with your Cash Letter. Eastern Bank s Item Processing Site Address & Phone/Fax Numbers are: Eastern Bank Item Processing 195 Market Street Lynn, MA (781) (phone) (781) (fax) 1 st Shift Operations Officer Team Leader nd Shift Assistant Manager Team Leader

12 Cash Letter Deposit Preparation Procedures Quality Standards In order to comply with the Cash Letter Deposit Service, you must adhere to the following quality standards when submitting your deposits. The cash letter standards are the same either a pre-encoded or and un-encoded deposit vary only where indicated. Checks must be free of staples, paper clips, or folds All batches should contain no more than: 100 checks for an un-encoded deposit 250 for a pre-encoded Addition and encoding errors must be corrected and the deposit total adjusted before the deposit is made. All checks should be facing the same direction. Only checks and the supporting documentation for your Cash Letter Deposit are to be placed in the deposit carrier. Un-Encoded checks and Pre-Encoded checks are not to be in the same bag or on the same deposit tickets. Eastern requests that a single deposit ticket have no more than 9,000 deposited items associated with it. If you are a Pre-Encoded Cash Letter customer, you must adhere to the following additional steps for Pre-Encoded Cash Letter Deposits. Encoding must be clean and on the lower right hand corner of the checks and control documents. Pre-Encoded deposits should be routinely inspected for MICR quality. Encoding correction labels must be placed over the mis-encoded amount field and not overlap the edge of the check. Endorsements- (Corporate Clients) Proper endorsements are important for deposit processing. Eastern will place the "Bank of First Deposit" endorsement on the checks you deposit. In order for this endorsement to be acceptable and comply with Federal Reserve Regulation CC, you must keep the "Depository Bank" area clear of all payee endorsements and extraneous information. The area that must be kept clear is no less than 3.0 inches from the leading edge of a check and no more than 1 1/2 inches from the trailing edge. Note: The above requirements are not applicable to Correspondent Bank customers. Please refer to the "Special Procedures for Correspondent Banks" section of this Guide. 12

13 Cash Letter Deposit Preparation Procedures Packaging and Delivery At the end of your processing day, you agree to package your deposits according to the procedures and requirements set forth in this Service Guide. Unless you request other arrangements, all deposits must be delivered on a banking day to the Eastern Bank Item Processing Site at: Eastern Bank 195 Market Street Lynn, MA Procedures for Delivery of Cash Letter Deposits to Eastern Bank Upon arrival at Eastern Bank the courier should report immediately to the Security Desk and inform them they have a Cash Letter Delivery. The Security Guard should call the Item Processing Department and inform them of the couriers arrival. An Item Processing Staff member will come down to the guard s desk to verify and receive the Cash Letter Delivery. An Eastern Bank Bill of Lading form will be completed indicating the number of bags and boxes in the Cash Letter Delivery. The Bill of Lading will be time stamped. Both the Item Processing Staff member and the courier will initial the Bill of Lading form that will verify both delivery and receipt of the Cash Letter. Note: Both the Item Processing Staff member and the courier must be present at the time of verification. A copy of the Bill of Lading will be given to the courier. The copy should be returned to the corporate client for verification of delivery. The Item Processing Department will retain a copy of the Bill of Lading which will be kept with the clients file. Transportation Your deposit can be delivered by your own employees or by a contracted courier. If you choose to use a contracted courier, Eastern must approve the courier prior to your first delivery. You should notify Eastern at least two weeks prior to the first delivery for approval. You can contact your Treasury Sales Representative who will work with our Transportation Department to make the appropriate arrangements. 13

14 Procedures for Preparing a Pre-Encoded Cash Letter Deposit with More Than 250 Checks You must comply with the following procedures when your Pre-Encoded deposit contains more than 250 checks. 1. Separate your deposit into as many groups of 250 checks as you can, making sure all checks are facing the same direction. Each of these groups of checks is a batch. Any checks remaining at the end of this process can be grouped together in a smaller batch. 2. Encode the dollar amount on each check within each batch and generate an encoding/adding machine tape showing the dollar amount of each check and the total dollar amount of all the checks in the batch. If there is an encoding error, place an error correction label on the amount field and re-encode the check, remembering to adjust the deposit total accordingly. You are required to keep a copy of this tape and all other required documentation set forth in this Service Guide for the time period specified. Note: Spot-check the batch for bad, broken or missing encoding. If any of these issues occur, stop encoding. If possible, address and fix the problem. If you are unable to continue encoding, prepare the remaining items in a separate Un-Encoded deposit. Preparation of the batch 3. Place a Yellow Batch Header ticket at the beginning of the batch. 4. Secure each batch of 250 checks ensuring that they do not get out of order. Preparation of the deposit. 5. Place all of the secured batches together creating the deposit. 6. Follow the deposit with: All of the add tapes for each of the batches A deposit slip, (total deposit amount encoded) Note: Eastern requests one deposit ticket for each nine thousand items. 7. Secure the entire deposit so that the checks do not get out of order. 8. Enclose the entire deposit in a bag or tray. 9. Transport the deposit to the Eastern Bank Item Processing Site. 14

15 Sample Pre-Encoded Cash Letter Deposit with 700 items ADD TAPES WITH DETAIL AND TOTALS FOR BATCHES 1-3 DEPOSIT SLIP WITH TOTAL DEPOSIT AMOUNT BATCH NUMBER 3, CHECKS YELLOW BATCH HEADER TICKET BATCH NUMBER 2, CHECKS YELLOW BATCH HEADER TICKET BATCH NUMBER 1, CHECKS YELLOW BATCH HEADER TICKET 15

16 Procedures for Preparing an Un-Encoded Cash Letter Deposit with More than 100 Checks You must comply with the following procedures when your Un-Encoded deposit contains more than 100 checks: 1. Separate your deposit into as many groups of 100 checks as you can, making sure all checks are facing the same direction. Each of these groups of checks is a batch. Any checks remaining at the end of this process can be grouped together in a smaller batch. 2. Generate an adding machine tape showing the dollar amount of each check and the total dollar amount of all the checks in the batch. You are required to keep a copy of this tape and all other required documentation set forth in this Service Guide for the time period specified. Preparation of the batch 3. Place a Yellow Batch Header ticket at the beginning of the batch. 4. Secure each batch of 100 checks ensuring that they do not get out of order. Preparation of deposit 5. Place all of the secured batches together creating the deposit. 6. Follow the deposit with: All of the add tapes for each of the batches A deposit slip, with all batch totals listed as well as the total amount of the deposit. Note: Eastern requests one deposit ticket for each nine thousand items. 7. Secure the entire deposit so that the checks do not get out of order. 8. Place the deposit into a deposit bag, seal it, and write the dollar total of the deposit on the front of the bag. Mark the bag "Un-Encoded checks" and label it with your return address. 9. Transport the deposit to the Eastern Bank Item Processing Site. 16

17 Sample of Un-Encoded Cash Letter Deposit with 250 Checks ADD TAPE WITH DETAIL AND TOTALS FOR BATCHES 1-3 DEPOSIT SLIP WITH TOTAL DEPOSIT AMOUNT BATCH NUMBER 3, CHECKS BATCH HEADER YELLOW BATCH HEADER TICKET BATCH NUMBER 2, CHECKS BATCH TOTAL YELLOW BATCH HEADER TICKET BATCH NUMBER 1, CHECKS BATCH TOTAL YELLOW BATCH HEADER TICKET BATCH TOTAL 17

18 Cash Letter Adjustment Requests Cash Letter adjustment requests are handled via the Internet, simply access and click on Cash Letter Adjustment Form, complete the online form and click submit. 18

19 Special Procedures for Correspondent Banks Procedures for Correspondent Banks Endorsements for Correspondent Bank Customers If you are a Depository Financial Institution, and you are acting as Bank of First Deposit, you are required under Regulation CC to endorse the checks as Bank of First Deposit. The endorsement, to be acceptable and comply with Federal Reserve Regulation CC, must be placed in the "Depository Banks" area. The area is no less than 3.0 inches from the leading edge of a check and no more than 1 1/2" from the trailing edge. Deposit Preparation Unless otherwise agreed upon in writing, you must comply with all the other procedures described in the Pre-Encoded Cash Letter Deposit Preparation section of this Service Guide. You should contact your Treasury Sales Representative if you will not be Pre-Encoding or have any requirements not covered in this Service Guide. 19

20 Ordering Cash Letter Deposit Supplies Procedure for Ordering Cash Letter Deposit Supplies The Cash Letter Deposit Service requires that you use the specific Eastern approved supplies. These have been tested by Eastern and will assist in properly crediting your account and minimize processing delays. Initial Order If you chose to order your Cash Letter Deposit supplies through Eastern, your Treasury Service Specialist will order your initial supply of deposit tickets. Subsequent re-orders can be made by faxing a re-order request (form in Appendix A) to the Correspondent Banking Client Support Group or by contacting your Relationship Manager. Subsequent Orders Please monitor your inventory closely and order additional Cash Letter Deposit supplies at least two weeks prior to needing them. A reorder supply request form can be found at the end of this manual. The fax number and address are provided on the form. Any applicable charges for supplies beyond the standard order indicated on the supply form shipped via regular mail will be debited to your account. Upon your receipt of deposit tickets, please verify that your name, address and account number are correct. In addition, if you use our Eastern Deposit reconciliation service, please verify that the proper location number is encoded in the serial number field. The serial number field is found on the lower left-hand side of the deposit ticket. 20

21 CORRESPONDENT BANK DEPOSIT TICKET/SUPPLY REORDER REQUEST Date: To: Correspondent Banking Client Support Fax #: From: Phone #: Bank: Please place an order for the following supplies: Deposit Tickets Number of bundles (200 tickets per bundle) Account #: Batch Header Tickets (EBF-155) Large Plastic Shipping Bags (1924EB) Number of bundles (100 per bundle) Number of packages (60 bags per package) This order should be shipped to the following address: Bank Name : Attention: Address: City: State: Zip: Please allow two weeks for delivery 21