Banks affected by Iowa's floods recently began receiving special bags to deposit damaged and contaminated bank notes removed from ATMs and bank vaults, Annette Owens, assistant vice president of Cash Services at the Kansas City Federal Reserve Bank, tells ATM& Debit News.
The liquid- and vapor- resistant bags come in two size s. The smaller bags hold
eight bound bundles of bank notes, and the l a rger ones hold 16 bundles, according to Philip Johnson, the Fed's national director of cash operations and business continuity.
Each bundle contains 1,000 bank notes. The Fed requires banks to deposit damaged and contaminated bank notes in the special bags. It cleans the damaged notes and puts then back into the system but destroys notes tainted by chemicals, Owens says. The Fed does not accept coins, he notes.
"I don't know how many bags have been requested [by the Iowa banks]," Johnson
says. "We re c e i ve requests from banks, so I can't tell you how many are for their ATMs."
The Fed developed the bags for damaged and contaminated bank notes after
hurricanes Katrina and Rita caused flooding in New Orleans in 2005, Johnson says.
Iowa will not need as many special bags as New Orleans, Johnson says. Ne w
Orleans banks deposited damaged and contaminated bank notes with us for a year
following Katrina and Rita, says Ro b e rt Musso, branch manager of the Fe d e ra l
Reserve Bank of New Orleans.
"We replaced $75 million to $100 million in contaminated bank notes, and contaminated currency is still trickling in," Musso says. Banks are still cleaning up from Katrina and Rita and finding lost ATMs beneath
d e b ris left by the floods, he adds.

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