Inside the Fed: Follow the money
On a typical day, $150 million in cash leaves Charlotte, destined for financial institutions across the Carolinas.
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Editor’s note: In this special series, Mark Washburn provides an exclusive look inside the Charlotte branch of the Federal Reserve Bank, uncovering its vital role in Carolinas commerce. Each segment offers a unique glimpse into the unseen engine driving our local economy. Our regular Ledger newsletters return next week.
Here’s the intricate process of how currency is handled, processed and circulated, ensuring the financial stability of the Carolinas
by Mark Washburn
Cash moves through the Charlotte Fed something like a factory product.
Businesses throughout the region take their excess cash to their banks or credit unions for deposit. In turn, they ship their excess cash to the Fed in Charlotte in commercial armored trucks, which back up to the loading dock beginning at 7 a.m.
When a load arrives, an examiner counts the delivery at the bulk level, adds a scannable ID band to the stack and confirms the deposit slip. When all checks are done, the driver — who waits behind bulletproof glass for the receipt — is dismissed.
Some drivers go the other way, taking currency from the Fed to banks. On a typical day, $150 million in cash will leave, destined for financial institutions across the two states.
Next, incoming cash moves to a vault about the size of two basketball courts. Here, currency is put in metal bins and stacked in racks.
Inside the Charlotte Fed's currency vault. Hundreds of millions of dollars in currency are held in stacked metal bins for processing or release to financial institutions in the Carolinas. (Photo by Mark Washburn)
In all, there are 1,935 containers in the vault. Each container can hold 280,000 notes. A container full of $100 bills, for example, holds $28 million.
When an operator calls for a box, a crane drives down the row, plucks the desired box and delivers it to a motorized robot about the size of a Coke machine.
These yellow money bearers drive to where the cash is wanted. When the robots, or “automatic guided vehicles,” were commissioned, the branch held a contest among employees to name them. Charlotte’s robots go by Dash, Flash, Crash and Smash.
DASH, the robotic money bearer, carries a bin of currency from the Fed vault. (Photos by Mark Washburn)
Currency boxes go into sealed rooms containing what are called Bundle Processing Systems and a minimum of two authorized operators with blue vests.
There, the bricks of bills are fed into the processors, which are about the size of a delivery van. Charlotte’s Fed has five of them, a whirring amalgam of engineering, optics and computer finesse.
Straps wrapped around the money show which bank sent the stack, even which teller wrapped the brick. They are photographed, then the operator fans out the bills, like you’d fluff paper going into a copier, and puts them in.
In an instant, the machine examines each bill with a line of seven sensors made by different contractors, so no one company knows all the detection capabilities.
Banknotes zip through the machines at 42 per second, 100,000 notes an hour. Each stack is checked to match the deposit slip and ensure no stray $10 bills got into a stack of, say, $100s.
Each machine can process roughly a million notes per 10-hour shift, two shifts a day. About 50 people out of the local Fed’s 250-member workforce operate the processing machines.
A field engineer from the processor’s manufacturer is always on duty when the machines are in use to troubleshoot any problem.
Currency meets the test
Soiled, torn or defaced currency gets shredded and rises like upward snowflakes through a clear vacuum tube to an industrial trash bin. About 10% of all notes fail to pass inspection.
That adds up to about 20 tons of shredded notes a month. It is recycled for mulch, compost or goes to be burned for power generation.
When the remaining bills are declared fit and ready for circulation, they are repackaged, returned to a container, then returned to the vault where they await outgoing orders.
When bills go bad
Counterfeit notes are seized by the currency processors and set aside to be delivered to the U.S. Secret Service. Operators are certified twice annually to detect counterfeit bills and are the first link in the chain of legal custody.
But here’s a Secret Service secret: Few counterfeits are found anymore. Electronic scams are easier, more lucrative. Counterfeiting is a lost vice.
In May, for example, 123,494,000 notes were processed in Charlotte, yielding only 237 counterfeits, or 0.00019%, Terry Wright says.
If currency arrives contaminated by fentanyl, it is not accepted and sent back to the originating financial institution. Bills tainted with hazardous chemicals are a growing challenge for law enforcement nationally.
Mark Washburn is a retired Charlotte Observer writer and columnist who lives in Davidson. Reach him at mwashburn76@gmail.com.
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COMING FRIDAY: How Charlotte secured its Federal Reserve branch
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Checking in for a flight from Charlotte, al fresco
American Airlines is getting ready to open a temporary outdoor ticket counter at Charlotte’s airport, as construction on the terminal lobby is set to close some indoor ticket counters, the airport said this week. The shift is expected to last through July 21. All American ticket counters between Checkpoint C and Checkpoint E will close. Fliers should plan to arrive early and use kiosks when possible. Highs this week are expected in the 90s.
In brief — Charlotte’s most complete news round-up:
Madalina Cojocari’s mom leaves the country; alcohol law changes signed into law; police investigate 4 connected shootings; autopsy of gunman who killed officers; socialite dishes on the Teppers’ Hamptons parties