|Financial Services Policy Committee
Federal Reserve System
Federal Reserve Bank of Atlanta
Financial Services Policy Committee Announces Atlanta Office Will Retain New Orleans Zone Check Processing Volume
Atlanta, Ga., December 5, 2005--The Federal Reserve Banks’ Financial Services Policy Committee (FSPC) today announced that it will retain the Federal Reserve Bank of Atlanta’s New Orleans Branch check processing operation at the Atlanta Fed’s head office. Since Hurricane Katrina struck the Gulf Coast in August, the Atlanta office has been processing checks on a contingency basis for the New Orleans zone. The Atlanta Fed’s New Orleans Branch, which will have a staff of just over 100 employees after today’s announcement, will continue to perform a number of other important functions, including cash services, for the Federal Reserve.
All New Orleans check employees, most of whom have been working and living in Atlanta since the disaster struck, will be offered check processing jobs in Atlanta. New Orleans’ check staff members that plan to return to New Orleans will have the opportunity to apply for positions that may be available in functions remaining at the Branch. The FSPC is making this decision in support of the Reserve Banks’ strategy in response to declining check volumes nationally. The date for the final consolidation of New Orleans checks into Atlanta is March 31, 2006. This decision is being announced today, which is outside of the Reserve Banks’ annual check infrastructure review, to assist employees and the Atlanta Fed in moving forward with long-term plans.
The Reserve Banks considered moving New Orleans’ check processing to Atlanta this past spring as part of their annual check infrastructure review but decided to delay that move and re-evaluate that decision again in 2006. “As we looked ahead, we were certain that at some point in the near future we would be moving New Orleans’ check processing volume to Atlanta. Thus, we did not want to ask staff to resettle in New Orleans only to be faced with a move back to Atlanta a short time later,” said Patrick K. Barron, first vice president of the Federal Reserve Bank of Atlanta and director of the Federal Reserve’s Retail Payments Office.
Over the past three years, the Reserve Banks have significantly reduced their total number of check processing locations as check volumes have declined and been replaced by electronic forms of payment, such as credit and debit cards and automated clearinghouse transactions. Today, the Reserve Banks process checks in 27 locations nationwide, down from 45 locations in 2003. An additional six locations, including locations previously announced as well as today’s announcement, will reduce that number to 21 by the end of 2007.
Today, the New Orleans Branch has approximately 155 employees, including 50 check staff members. For Branch employees working at Reserve Bank locations outside of New Orleans since Hurricane Katrina, the Federal Reserve Bank of Atlanta has been paying housing and some other living expenses. For check staff choosing to permanently relocate to Atlanta, the Atlanta Fed will pay some moving expenses. For staff not accepting a position in Atlanta or, as available, in New Orleans, the Atlanta Fed will provide various assistance to ease their separation, including severance pay between three months to one year, depending on tenure.
The New Orleans Branch will remain open and continue to serve its zone, which covers the southern portions of Louisiana, Mississippi, and Alabama, and much of Florida’s panhandle. The Branch was closed for operations for one month after Hurricane Katrina before restarting its cash operations near the end of September. Going forward, the New Orleans Branch will continue to provide cash services to financial institutions in its zone and serve as the base of the Sixth Federal Reserve District’s cash function office. Importantly, the New Orleans Branch will continue to have a local board of directors that will provide valuable economic intelligence from the Gulf Coast area. In addition, Branch staff will continue to conduct economic and financial education programs for Gulf Coast teachers and students and have a community affairs presence to encourage economic development in low and moderate-income areas. The Atlanta office will continue to fully support financial institutions processing checks in this zone, and institutions using the Reserve Banks’ check services should not notice a significant difference as a result of moving processing from New Orleans to Atlanta.
Based on today’s decision, the Reserve Banks will postpone the previously announced move of the Nashville Branch’s check processing operation into Atlanta until 2007. From an operational perspective, this delay will provide ample time to fully consolidate New Orleans processing and to prepare for the additional volume from Nashville. Nashville was originally targeted to move its volume to Atlanta in early 2006.
The Reserve Banks’ long-term strategy to position their check processing infrastructure to match declining paper check volumes has helped the Banks better meet the expectations of the 1980 Monetary Control Act while maintaining high levels of service for financial institutions nationwide. The Monetary Control Act requires the Reserve Banks to set prices to recover, over the long run, their total operating costs of providing payments services to financial institutions, as well as the imputed costs they would have incurred and the profits they would have expected to earn had the services been provided by a private business firm.
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2005 Other announcements