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Reg CC - Remotely Created Checks
Answer by John Burnett, BOL Guru
Guru Bios
Question: On July 1, 2006 the Federal Reserve amended Regulation CC in regard to remotely created checks. Since our bank does not have business accounts are we required to amend our disclosures to shift the liability to account holders for this type of check? If so, what disclosure should be revised and what is the language we should use? Do we have to send a new disclosure to all of our customers?
Answer: Let's take the last question first. The amendment in question created a bank-to-bank warranty. It does not affect your customer in any way, by itself. You were never authorized to pay unauthorized remotely created checks before or after the effective date of the amendment, so, no additional disclosures are needed.
Remotely created checks are generally deposited by businesses. If you don't have business accounts, you are unlikely to have any of these items deposited with you, so you don't need to make any contractual changes. However, if you want to cover yourselves completely, you could add language to your deposit agreement that allows you to charge back any deposited RCC if returned on a warranty claim, if the warranty claim was entered within one year of the date the check was deposited with you.
First published on BankersOnline.com 11/13/06
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