Federal Reserve Connects to SVPCO-Image Exchange Network in First Exch

NEW YORK, March 7 /PRNewswire/ -- The Clearing House Payments Co. announced today that the Federal Reserve is now linked to the SVPCO-Image Exchange Network to facilitate the electronic movement of image files in the nation's first image-based check clearing between public and private-sector operators.

Wells Fargo Bank N.A. and Key Bank are the first two institutions in the nation to send electronic image files to the Federal Reserve via the SVPCO-Image Exchange Network. By sending image cash letter files instead of sending the actual paper checks to the Fed, both banks can significantly reduce the costs of processing the original items.

The SVPCO-Image Exchange Network is the nation's premier image exchange network, enabling financial institutions to perform a variety of check image clearing and settlement functions.

"The Federal Reserve and SVPCO-Image Exchange Network connection is a major milestone for the nation's payments system, and it will help usher in a new era of clearing checks in an all-electronic environment that will benefit institutions nationwide," said George Thomas, Executive Vice President of The Clearing House. "The early volumes being sent through the Image Exchange Network are significant, and we expect that to increase substantially in 2005."

The Federal Reserve/SVPCO-Image Exchange Network connection eliminates the need for financial institutions to implement redundant infrastructure to support clearing checks via image cash letters. This connection also expands the options available to institutions across the country seeking to take advantage of the efficiencies of digital image technology as image cash letters can be cleared to any financial institution in the country.

"The Federal Reserve/SVPCO-Image Exchange Network connection enables financial institutions to clear electronic items in a safe and secure environment," said Fred Herr, Senior Vice President with the Federal Reserve Bank's Retail Payment Office. "The Federal Reserve/SVPCO-Image Exchange connection also promotes payment system efficiency by eliminating the need for some industry participants to establish redundant infrastructure to clear image cash letters."

In addition to the Fed, five of the nation's largest banks and a large third-party service provider are already using the SVPCO-Image Exchange Network. Most of The Clearing House's 19 bank owners are committed to linking to the Image Exchange Network by the end of 2005.

"Wells Fargo is pleased to partner with the Federal Reserve and The Clearing House to take a leadership role in exchanging image files," said Jim Gattman, Senior Vice President, Wells Fargo. "The SVPCO-Image Exchange Network is helping Wells Fargo streamline its check processing by sending significant volumes of images, instead of transporting the original items."

Mike Barnum of Key Bank, said: "With the Fed now on board, it is much easier for Key Bank to do full image check clearing. The SVPCO-Image Exchange Network offers the reliability and security to process a significant amount of image volume with the Fed. We look forward to realizing significant cost savings in our check processing business by leveraging the SVPCO-Image Exchange Network."

Susan Long, Senior Vice President of SVPCO-Electronic Clearing Services, said: "The Fed's participation is the beginning of a fundamental shift toward image clearing resulting from the passage of Check 21. With the Fed now linked, every institution in the country has an opportunity to realize the long-awaited benefits of image clearing."

For more information about the SVPCO-Image Exchange Network, contact Susan Long, susan.long@svpco.com.

About The Clearing House Payments Company

The Clearing House Payments Company (http://www.theclearinghouse.org/) is a private sector, global payment systems infrastructure that clears and settles 20 million payments for more than $1.5 trillion per day. The Clearing House serves more than 1,600 U.S. financial institutions and hundreds of international participants and manages payment services that span the entire spectrum of paper, paper-to-electronic, and electronic payments. Services include local and regional check exchange and settlement services; ACH association and operations; large-value "wire" payments; electronic check presentment; and an image exchange. Financial institutions of all sizes benefit from payment systems that meet the highest standards for reliability, security and service. The Clearing House Payments Company is owned by the following banks or their U.S. banking affiliates: ABN AMRO Bank, Bank of America, The Bank of New York, Bank of Tokyo-Mitsubishi/Union Bank of California, BB&T, Citibank, Citizens Bank, Comerica Bank, Deutsche Bank, HSBC Bank, JPMorgan Chase Bank, KeyBank, M&T Bank, National City Bank, PNC Bank, SunTrust Bank, U.S. Bank, Wachovia Bank, and Wells Fargo Bank.

For more information on The Clearing House, contact chip.savidge@theclearinghouse.org or 212-613-9896.