denominator (lower number) of a fraction appearing in the upper right corner of checks paid through the Federal Reserve System. The ABA transit number is the upper number. The routing symbol is a three- to four-digit number identifying the Federal Reserve district of the drawee (paying) bank, the Federal Reserve facility through which the check is collected, and the funds availability assigned by the Fed. Checks given immediate availability, indicated by a 0 as the final digit in the routing symbol, are payable the same day as presented to a Federal Reserve Bank for collection. A deferred availability check (identifiable by the numbers 1 through 9 in the final digit) is paid by a Federal Reserve Bank in two business days. For example: 50-226/ 213

Federal Reserve Regulation implementing the expedited funds availability act of 1987, setting endorsement standards on checks paid by depository financial institutions. The endorsement standard is designed to facilitate the identification of the endorsing bank and prompt return of unpaid checks.

numeric coding facilitating check clearing among banks. The ABA numbering system, managed by the American Bankers Association, assigns a unique identifier to each U.S. financial institution. The ABA number is printed as the numerator (upper portion) of a fraction appearing in the upper right corner on checks; the denominator is the bank's check routing symbol, which identifies the Federal Reserve Bank servicing that financial institution.

temporary delay in funds availability on checks drawn on out-of-town banks. Checks with 0-day availability are credited the same day as received. Checks with l-day or 2-day availability-the average time it takes to clear checks drawn on distant banks-are posted to the sending bank's deferred account, and funds from this account are moved on a daily basis to the reserve account as these checks are paid. Even so, a bank may get credit for transit checks before funds are collected from the paying bank, which in turn creates federal reserve float.

private agreement among banks to exchange checks drawn on accounts at each other's bank, bypassing local clearinghouses or the Federal Reserve.

Direct presentment increases funds availability. Contrast with transit letter.

verification of the dollar amount on a check or draft being deposited. This is done by comparing the handwritten amount on the check to the amount written on the accompanying deposit slip. Proof of deposit is the second step in processing of checks presented for payment, after checks have been separated by a check sorting machine known as a reader/sorter into on-us and on-others categories, and is the only step in check processing that has not been automated fully. Proof of deposit or proving a check is done manually after checks have been sorted into different categories and the MICR line containing the customer's account number and the bank routing and transit number has been captured by the reader/sorter.

group of checks, accompanied by a paper listing sent to a clearing house or the Federal Reserve check collection system. A cash letter contains a number of negotiable items, mostly checks, accompanied by letter that lists the amounts and instructions for transmittal to other banks. Also called a transit letter.