The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
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Federal Reserve Banks handle billions of dollars in currency each day. In the district served by the Federal Reserve Bank of New York, currency is processed at the East Rutherford Operations Center in New Jersey.
Each business day, the New York Fed processes more than 19 million notes deposited by depository institutions.
The New York Fed destroys approximately five million unfit currency notes each business day.
Each business day, Federal Reserve Banks handle currency that is deposited by banks. For safekeeping and space reasons, banks send currency to the Reserve Banks when they have more than enough on hand to satisfy their customers' needs.
Depending on daily and seasonal fluctuations, an individual bank may deposit funds at a Federal Reserve Bank several times a week. The Bureau of Engraving and Printing (BEP) of the U.S. Treasury, in turn, supplies newly printed cash, and the Bureau of the Mint supplies coin, to the Reserve Banks to fill bank orders.
Currency Deposits at the East Rutherford Operations Center In the district served by the Federal Reserve Bank of New York—the Second District—currency processing is performed at the East Rutherford Operations Center (EROC) in New Jersey. Banks deliver coin and currency by armored carriers to EROC, a state-of-the-art facility that opened in 1992. The facility operates under strict controls.
After receiving clearance from the New York Fed Police, armored carriers deliver currency to EROC's Paying and Receiving Division. The paying and receiving tellers verify the contents upon delivery and issue a receipt to the carrier.
The tellers perform a two-step process. First, they check the integrity of the currency and then enter the content information into an automated tracking system.
The currency is then transported to EROC's automated currency vault, where it is stored and later retrieved for processing.
Processing of Currency EROC employees in the currency verification department use high-speed currency processing machines to verify the deposits. Deposits are retrieved from the automated vault and sent to currency verification processing rooms, where the currency is fed into the high-speed processing machines. The machines count each note—at an average rate of 74,000 notes per hour—and validate its denomination, test for fitness and automatically bundle fit notes into packages. The fit notes eventually make their way back into circulation when banks order currency from the Fed.
Incorrect denominations, suspected counterfeits, and non-machine-readable notes are rejected, and, if necessary, the depositing bank's account is debited or credited. EROC employees inspect suspected counterfeit notes by hand, paying particular attention to the portrait, scroll work, seals, and colored fibers of each bill, as well as to the weight, color and texture of the paper. Suspected counterfeits are stamped "COUNTERFEIT" at the point of detection, and forwarded to the U.S. Secret Service, the Department of Homeland Security agency charged with maintaining the integrity of the nation's currency.
Currency Destruction The authorization to destroy currency was given to the Federal Reserve Banks by the Treasury Department in 1966. At EROC, unfit currency is separated at the high-speed currency processor, where the notes are cut into confetti-like shreds and sent to a disposal area.
All destroyed currency is replaced with new currency ordered by the Federal Reserve from the Bureau of Engraving and Printing. Reserve Banks provide the BEP with an estimate of new currency needs for the coming year based on the past year's usage. Roughly 26 percent of all notes replaced are $1 notes, which have a life expectancy of 5.9 years. Other denominations remain in circulation longer. A $100 bill, for example, usually lasts seven years.