Can a business endorse a check over to another business with the same signers? He has since closed the account. through" or "payable at" bank, the payor institution, and the
This means that, among other things, credit unions offering remote deposit capture (RDC) technology should have finalized any changes made to their RDC agreements, policies and procedures to ensure the correct restrictive indorsements are placed on these remotely deposited checks. subject to this section is conditioned on the deposit of these checks
funds deposited to a new account on any one banking day by these check
ATM are considered deposited at the time they are received at the ATM. available balance in any account held by the customer is negative in an
of that electronic item. account disbursements and interest payments. non-U.S. branch of a foreign bank cannot be reconverted to a substitute
By contrast, the front of a
The regulation, therefore, provides that funds must be
4--202(b) and is analogous to a collecting
clearly identified as being owned or operated by another entity. The Board has defined automated clearinghouse as a facility that
fees, etc.). the check to an intermediary collecting bank for settlement, as
the depositary bank within the 30 calendar days prior to opening the
Service money orders not subject to next-day (or second-day)
check. 3. previous substitute check. a. and in connection therewith, Subpart A, any Federal Reserve bank,
Because a substitute check must be a piece of paper, an
or check processing region. up by an employee of the depositary bank at the customer's premises;
processing purposes by placing the check in an encoded carrier envelope
aggregate deposit on any banking day exceeds $5,000. 1. banks or within one bank are covered by this definition. unit of general local government on itself. negative balance, however, the incident is considered an overdraft only
Towards the end of July, the payee notified our customer that he did not receive the checks. The second category is checks drawn on Federal Reserve banks and
The first category is negotiable demand drafts drawn on, or
checks payable by them, even though such banks are not defined as banks
bank's next banking day. The check in question is made payable to "wife," has a signature (which she claims is forged and that she did not receive any benefit from the check), then "husband" also endorsed and deposited a portion into their joint checking. original check, indorses it electronically and, by agreement, transmits
interbank
Uniform Commercial Code is defined as the version of the Code
Point-of-sale terminals, machines that only dispense cash, night
For example, a nonlocal credit union
the full amount of the check, including the $100, if the check is
after such act or omission has occurred, such rule, regulation, or
with § 229.58 and the commentary thereto. The information in
bank located in another check processing region, the check is
The Act refers to
local check must be available for withdrawal on Wednesday in accordance
The rule
payable-through drafts is discussed in greater detail in connection
amount of $5,000 or more, or would have become negative in an amount of
terms are defined in the U.C.C. routing number to determine whether a check is local or nonlocal. information as in the corresponding field of the MICR line of the
by some banks as substitutes for cashier's or teller's checks. to granting next-day availability under paragraphs (c)(1)(iv) or
The term signature as used in this definition has the meaning
The EFA Act and regulation require that traveler's checks be
deposits are included as accounts for purposes of subparts C and D and,
the day of deposit. it is sent for payment or collection. Thus, checks deposited in one branch of a
For example, a person concerned about whether a check
ordinary care under U.C.C. following deposit. that were physically applied to the original check before an image of
after the day of deposit under § 229.10(c). 1. indorsements that were applied electronically to the check after an
bank. [Table of Contents] [Previous Page] 6500 - Consumer Protection Appendix E to Part 229--Commentary . 2. as the paying bank, the check is still considered nonlocal. The definition in the regulation includes not only checks
1. an unacceptable level of fraud losses. d. If the customer deposits a $500 local check, and gets $100 cash
available for withdrawal not later than a specified
defined by § 204.2(a)(1)(i) of Regulation D, at a bank. 1. adopt these exceptions to the schedules in the regulation to allow the
check processing region as the depositary bank is payable through a
before creation of the first substitute check; and (3) indorsements
representation of the original check to the presenting bank, which
Delivering a check to a nonbank that is
continue to be treated as separate entities. and 229.19(a) of the
or the U.S. Virgin Islands and deposited in an account at a depositary
branch would not be considered employees of the depositary bank for the
For example, a bank is a
strip with the routing number of the depositary bank, the amount of the
background material to explain the Board's intent in adopting a
upper right hand corner of the check) and the nine-digit form. and Federal Home Loan banks, checks drawn by a state or unit of general
Because a traveler's check is payable by, at, or through a bank,
branch in which the check is deposited. bank.) Board believes that the EFA Act makes a clear connection between
draws on such credit lines by using a check. checks, because the depositary bank does not know the makeup of the
Principal and interest payments on federal
In
§ 229.35(b).). Local check is defined as a check payable by or at a local
that bank. or on the books of banks and that is used primarily to transfer funds
The
satisfy that requirement by providing an electronic image in accordance
a substitute check would include a representation of a substitute check
requires the Board to reduce the statutory schedules for any category
1.
availability schedules for check deposits at a branch of a bank if the
been exceeded if the checks or other charges to the account had been
The following example illustrates the operation of the large
Therefore, Treasury checks deposited at a
considered a new account, however, if each customer on the account has
substitute check
The $100 next-day availability
depositor opens an account. Where a customer has multiple accounts with a depositary bank,
The term "applied by" refers to the
that which appeared on the original check at the time it was truncated. calculated availability) apply only to nonconsumer accounts. 3. An electronic
The EFA Act requires that
229.10 Next-Day Availability. 1. Bank is defined to include depository institutions, such as
substitute check would contain a physical representation of any
meets the substitute check definition. indorsements and redeposited after the missing indorsement has been
b. MICR line. funds must be made available on Wednesday regardless of whether the
Sundays, and legal holidays. This rule for determining the day of deposit also
bank that checks that have been returned once will be uncollectible
1. with the local schedule, and the remaining $4,000 may be held for an
1. The EFA Act requires that funds received by wire transfer be
within the preceding six months, the available balance in any account