Reg CC Subpart C-collection Of Checks Flashcards
A paying bank returns a check such that the check would normally be received by the depository bank no later than 2pm on second business day following banking day of presentment.
Expeditious return
When is a notice of nonpayment required?
If returned item is equal/greater than $5000.
Note: return can satisfy the Notification if return expeditiously.
What is UCC’s return requirement?
Midnight
What is Reg CC return requirement?
Expeditious time frame
What can a paying bank do if they are unable to identify the depository bank?
May send return check to any bank that handled check for forward collection.
Note: Paying bank must advise that they were unable to identify BOFD. Expeditious return requirements do not apply.
What is notice in lieu (NIL) of return?
When check is unavailable for return,may send:
Copy of front/bank of check and
Written notice of nonpayment containing the information
Bank other than paying or depositary bank, that handles a returned check or notice in lieu of return?
Returning bank
Reg CC definition
Depositary Bank must notify there customer of the return by?
Midnight of the banking day following the banking day on which it received the return check or notice or within a longer reasonable time
Return check/written notice of nonpayment received in error
Misrouted return check
Burden of proof of late claim for certain non electronic returns falls on who?
Depositary bank asserting claim
List Reg CC warranties and indemnities
-Electronic checks/electronic returned checks
-Transfer & Presentment of remotely created checks
-settlement amount,encoding,and offset
-returned check/notice of nonpayment
-RDC Indemnity
-ECI Indemnity
-Substitute checks
Assurance that certain conditions will be met?
Warranty
Promise to reimburse a person for a loss they suffer
Aka. Promise of protection
Indemnity
Electronic check
Electronic image that accurately represents information on front and back of original check (at time check was truncated).
Must include accurate record of MIRC line and amount of check
Return warranty 229.34 (d)
Paying bank/returning bank:
-return within UCC midnight deadline
-authorized to return check
-check not materially altered
-for notice in lieu of return, original check has not and will not be returned.
Return warranties can not be made for which type of checks?
-drawn on US Treasury
-US Postal service money order, or
-drawn on state or a unit of general local government that are not payable through or at a bank
Notice of nonpayment warrant 229.34(e)
Paying bank returning a check $5,000 or greater must provide notice, and warrants:
-check is and will be returned within the UCC deadline
-authorized to send notice,and
-check has not been materially altered
Settlement amount,encoding,and offset warranty 229.34(c)
Presenting bank:
-total amount of checks presented equal total total settlement demanded
-accompanying info accurately indicates total amount of checks
-info encoded in magnetic ink is correct. Includes any info in MIRC line of substitute check.
Remotely Created Check warranty 229.34(b)
Bank that transfers or presents a remotely created check:
-person on whose account the check is drawn on authorized issuance of the item, in the amount stated on the check and to the payee on the check
Difference between remotely created check and ECI?
Remotely created check started as a paper check whereas ECI item did not.
No person will receive a transfer, presentment,or return of, or otherwise be charged for an electronic check or electronic return check, the original, a substitute, or paper or electronic representation of a substitute such that the person will be asked to make payment based on a check it has already paid.
No double debit warranty aka duplicate warranty
Bank that truncates a original check or accepts a truncated image for transfer,presentment, or returns of original item or substitute check
Truncating Bank
Reg CC 229.2(eee)(2)
Truncating bank indemnify a depositary bank that accepts the original check for deposit for losses incurred by that depositary bank if the loss is due to the check having already been paid and original item didn’t bore a restrictive endorsement.
RDC Indemnity
Reg CC 229.34(f)
RDC indemnity happens between what two banks?
Only between both BOFD.
