CHECK CLEARING AND COLLECTION 
Lye following is a transcript of the Federal Reserve Board’s 
Regulation J, Series of 1924. 
Section 16 of the Federal Reserve Act authorizes the Federal Re- 
serve Board to require each Federal Reserve Bank to exercise the 
function of a clearing house for its member banks, and section 18 of 
the Federal Reserve Act, as amended by the act approved June 21, 
1917, authorizes each Federal Reserve Bank to receive from any non- 
member bank or trust company, solely for the purposes of exchange 
or of collection, deposits of current funds in lawful money, national 
bank notes, Federal Reserve notes, checks and drafts payable upon 
presentation, or maturing notes and bills, provided such non-menber 
bank or trust company maintains with its Federal Reserve Bank a 
balance sufficient to offset the items in transit held for its account by 
the Federal Reserve Bank. 
In pursuance of the authority vested in it under these provisions of 
law, the Federal Reserve Board, desiring to afford both to the public 
and to the various banks of the country a direct, expeditious, and 
economical system of check collection and settlement of balances, has 
arranged to have each Federal Reserve Bank exercise the functions of 
a clearing house and collect checks for such of its member banks as 
desire to avail themselves of its privileges and for such non-member 
State banks and trust companies as may maintain with the Federal 
Reserve Bank balances sufficient to qualify them under the provisions 
of section 13 to send items to Federal Reserve Banks for purposes of 
exchange or of collection. Such non-member State banks and trust 
companies will hereinafter be referred to as non-member clearing 
banks. 
Each Federal Reserve Bank shall exercise the functions of a clearing 
house and collect checks under the general terms and conditions here- 
inafter set forth. 
Section 111. Checks Received for Collection 
|—Each Federal Reserve Bank will receive at par from its member banks and 
from nonmenber clearing banks in its district, checks!? drawn on all member 
and nonmember clearing banks, and checks drawn on all other nonmember 
banks which are collectable at par in funds acceptable to the Federal Reserve 
Bank of the district in which such nonmember banks are located. 
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