Regulation CC – final and proposed amendments
AML AND COMPLIANCE NEWS |
The Board of Governors of the Federal Reserve System (Board) has issued a final rule to amend the collection of checks and substitute checks provisions set forth in Regulation CC, which implements the Expedited Funds Availability Act. The new final rule amends the current check collection and return requirements due to the current electronic-based environment. Under the final rule, financial institutions are encouraged to receive and send returned checks electronically. As a result, the final rule amends the return check provisions by requiring institutions to return checks by 2 p.m. on the second business day. In addition, the new return requirements set forth in the final rule will apply to electronic images of checks, including electronically created items. Furthermore, the final rule has adopted new warranties and indemnities related to checks collected and returned electronically for losses caused either by an unauthorized or duplicate credited item while also applying the existing warranties to checks that are collected electronically. The effective date of the final rule is July 1, 2018.
The Board is also requesting comments on the proposal to amend substitute checks provisions set forth in Regulation CC to address disputes of whether a substitute check has been altered or is a forgery. Under the proposed rule, the assumption of an alteration would be implemented in cases where the original check is not available. The intent of the proposal is to provide institutions with guidance in situations when it is unknown whether the check has been altered or is a forgery. The Board will accept payments for 60 days following Federal Register publication.