Enterprise at a Glance
July 6, 2009
BNY Mellon Enterprise Treasury Services Will Not Accept State of CA Registered Warrants
The State of California began to issue registered warrants (effectively IOUs) for payment of certain obligations as of July 2. Preliminary information from the State controller's office notes that, "if there is sufficient cash available, registered warrants, or IOUs, will be paid by the State Treasurer on October 2, 2009." These warrants, if issued, will be drawn against a new routing transit # 1211 4507 7.
Registered warrants are neither checks nor demand drafts. Rather, they represent a future promise to pay by the State of California. As such, they will not be accepted by The Bank of New York Mellon for deposit to any accounts.
Any registered warrants received by BNY Mellon Enterprise Treasury Services will be returned on a "best efforts basis" to your lockbox client. Any provisional credit that may have been provided for these warrants will be reversed.
Impacts on Lockbox Services:
To address this unfolding situation:
BNY Mellon Enterprise Treasury Services will attempt to identify registered warrants on a "best efforts basis" in our Wholesale Lockbox sites and will return these warrants to your Lockbox clients as unprocessable items in their daily lockbox detail packages.
- Any registered warrants that we are unable to intercept in our Wholesale Lockbox process will enter the clearing stream. These registered warrants will either be sent back by the Bank of First Deposit (i.e., The Bank of New York Mellon or our network clearing partners), or they will be presented to the State of California and will come back as return items.
- This means that your clients will receive these warrants as either unprocessed transactions in their daily lockbox detail package, or as return items later on if they are initially processed in Lockbox.
Most registered warrants processed in our Retail Lockbox process will be outsorted by our high speed equipment and returned to your lockbox customers as unprocessable along with an image of the scannable documents that accompanied the warrants. Any warrants that are not identified by us will enter the clearing system and may be returned to your clients as return items.
Likewise, registered warrants should not be processed via our Remote Check Capture Service. Any warrants that are not disallowed at the point of scanning will be returned to your clients upon identification by BNY Mellon Enterprise Treasury Services. Therefore, we request that you ask your clients not to attempt to process warrants using Remote Check Capture, if possible.
We will provide you with further updates on this issue if additional changes occur. In the meantime, you may want to use this information to develop your own communications to your affected business clients. As an option to help you communicate with your business clients, we will have a generic (no bank branding) communication available for insertion in your clients' lockbox detail packages. If you would like us to include this in their lockbox packages, please contact your Enterprise Treasury Services representative.
Please contact your BNY Mellon Enterprise Treasury Services representative if you have any additional questions.