Redemption agent. The name given to a bank which is a member of the clearing house and
which clears for another bank which is not a member; also called clearing house agent. A bank
which is a clearing house member can act for a bank which is not a member only by consent of the
clearing house committee.  Formerly a national bank not located in a reserve city might, in addition
to redeeming its own notes at its place of business, designate another national bank in any of the
reserve cities specified in the National bank act as an agent for the redemption of its notes. The
act of June 20, 1874, abolished the provision for redemption agents and compelled national banks
to keep in the Treasury for the redemption of their notes an amount of lawful money equal to 5 per
cent of their notes outstanding. They were allowed to count this 5 per cent in their reserves held
against deposits. The Treasury thus became the redemption agent of the national banks, but they
were not relieved of the obligation of redeeming their own notes on demand.