For release: July 28, 2003

Contact:	Joe Elstner:
	Office:	(314) 444-8311
	E-Mail:	e-mail: joseph.c.elstner@stls.frb.org,
	Mobile:	cell: (314) 640-3526
Contact:	Charles B. Henderson
	Office:	(314) 444-8311
	E-mail:	charles.b.henderson@stls.frb.org
	Mobile:	(314) 609-5972
	Pager:	(314) 538-9526
Online Press Room:		www.stlouisfed.org/news/press_room/contact.html

Federal Reserve Bank of St. Louis to Stop Cash Processing Services at Little Rock, Louisville Branches

ST. LOUIS — The Federal Reserve Bank of St. Louis announced today that by the end of 2004 it will no longer operate cash-processing services at its Little Rock, Ark., and Louisville, Ky., branches.

The St. Louis Fed announced in February that check processing at its Little Rock and Louisville branches would move to Memphis and Cincinnati, respectively, by the end of 2004. "With revenues from check processing leaving our branches in Little Rock and Louisville, that leaves only cash processing to support those branches, including overhead functions like security, human resources and others," said LeGrande Rives, St. Louis Fed first vice president. "That's not an efficient way to run things, so we need to make some changes."

Some positions will be eliminated with the changes. The Bank's Little Rock and Louisville branches, already scheduled to lose 70 to 75 check services jobs each, will eliminate close to 60 positions each with the new changes.

Rives emphasized that the Fed will continue maintaining a presence in Little Rock and Louisville. "We will continue having boards of directors," Rives said. "The regional economic insights our branch directors provide us from their detailed knowledge of their businesses and markets are very valuable in shaping our monetary policy recommendations. We will also expand our community outreach, economic education and community development activities," he said.

Rives said that the current changes will add eight to 10 positions at the Memphis Branch, since its cash processing needs are growing. The changes will have little if any effect on headquarters employment in St. Louis, Rives said.

Rives said that, by the end of 2004, the Little Rock and Louisville branches will each have a small staff headed by a senior branch executive. "We're considering options involved in selling the branch buildings and moving to leased quarters in both cities, but it will take some time to work out the details," he said.

Banks and other financial institutions that have been dropping off and picking up cash at the Little Rock and Louisville branches should notice little change in their service, Rives said. "We'll contract with local armored carriers to use their facilities so banks can drop off and pick up cash there," he said.

Rives said employees whose jobs are affected will receive personalized benefit packages. Benefits, the same as those offered to check services employees, will include separation packages, enhanced pension benefits for some longer-service staff nearing retirement, extended medical coverage and career transition assistance.

Rives said the net effect of the new changes will save the St. Louis Fed approximately $3 million annually from changes in cash operations alone. "These are difficult changes to make," he said. "But we're trying to do the best we can for our employees and run our Reserve Bank as efficiently as we can."

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