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#247380 - 09/21/04 08:02 PM 100% Electronic
Anonymous
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A representative from Federal Reserve Dallas was here at our bank and informed us that we can get our outbound and inbound cash letters 100% electronic, if we choose to go that route we will not create nor receive a single substitute check (only images), the only disclosure requirement we will have to comply with is when a customer opens a new account, correct? Secondly, if all we ever get are images of a substitute checks, is the recrediting portion of Check 21 going to apply? Thanks

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#247381 - 09/22/04 04:32 PM Re: 100% Electronic
Lestie G Offline

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I thought I had heard in one of those Fed conferences that return items would stil be via paper. If that's true, then you will probably have some expeditied recredit responsibilities.
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#247382 - 09/22/04 06:39 PM Re: 100% Electronic
Anonymous
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Sorry, but just to be clear...if we get everything (including returns) electronically, then we DO NOT have any recrediting responsibilities? Thanks

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#247383 - 09/22/04 07:31 PM Re: 100% Electronic
Anonymous
Unregistered

Even if the Fed never sends you a substitute check (which is unlikely), a depositor of yours could receive a returned substitute check from another bank and come to your bank to redeposit that substitute check. You can never say you'll never get an SC.

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#247384 - 09/22/04 09:20 PM Re: 100% Electronic
HappyGilmore Offline
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Pulling people out of the ditc...
WT, apparently they don't understand hypothetical. my understanding is that if you are 100% electronic (imaging), then yes, your only disclosure is for new accounts.
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#247385 - 09/22/04 09:24 PM Re: 100% Electronic
homestar Offline
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Posts: 2,245
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Quote:

WT, apparently they don't understand hypothetical. my understanding is that if you are 100% electronic (imaging), then yes, your only disclosure is for new accounts.




"Hypothetically" speaking, of course, Happy. If you're 100% imaging, then you're not providing checks back with customer statements, right? Therefore, why would a disclosure need to be provided at account opening?

Am I missing something?
Last edited by Homestar; 09/22/04 09:26 PM.
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#247386 - 09/23/04 02:28 PM Re: 100% Electronic
bb Offline
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Posts: 145
Big XII
I agree. If you won't provide any checks (substitute checks) back to new customers with their statements after October 28, you would not be required to provide the disclosure to new customers.

Even if you clear all of your cash letters electronically, you will still have the potential to provide a substitute check to a customer on occasion (returned deposit items).

For any image cash letter containing returned deposit items, you will need to convert those items to substitute checks. How else will your customer be able to collect on the item?

Therefore you will be providing notice to these customers each time you provide a returned deposit item.

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#247387 - 09/23/04 03:40 PM Re: 100% Electronic
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,844
Pulling people out of the ditc...
Borrowed from BOL Check 21 page...

Quote:

Consumer Awareness Disclosure
Responding to several comments, the Fed has shortened somewhat Model Form C-5A, the Consumer Awareness Disclosure required in section 229.57 of the revised regulation. (The model form is still one and one-half typewritten pages in the Board document.) The Board also has clarified that these disclosures need only be sent to consumer customers who will continue to receive checks in their statements, and to consumers who occasionally receive a substitute check. The former group will receive a notice no later than "the first regularly-scheduled communication (read: next statement date) after October 28, 2004," or at the time the customer relationship is established, for each relationship started after October 28, 2004.

Only one disclosure need be given per account in the case of joint accounts, and only one per customer (rather than account) relationship. Thus, if a customer receives disclosures in November 2004 because of an existing checking account from which checks are enclosed in statements, and the same customer opens another such checking account in March 2005, no additional disclosures need be made at that time. Similarly, if a consumer has three accounts subject to disclosure on October 28, 2004, the bank need only provide one disclosure to that consumer.

For each consumer who actually receives a substitute check, the disclosure will be delivered at the time the consumer asks for a check or copy and receives a substitute check (no later than the time at which the substitute check is provided to the consumer). This is in addition to any disclosure that might have been sent generally to customers who receive original and/or substitute checks in their statements.





Homestar, from a check 21 disclosure you are correct. I was thinking of a disclosure the bank will provide when they open the account that states that the customer will receive no checks back.
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#247388 - 09/23/04 06:01 PM Re: 100% Electronic
homestar Offline
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Joined: Feb 2001
Posts: 2,245
US of A
"Homestar, from a check 21 disclosure you are correct. I was thinking of a disclosure the bank will provide when they open the account that states that the customer will receive no checks back.

OK, Hap. We're on the same page. A disclosure that you'll not provide checks back is certainly an option, but I think you'll agree it not required by Check 21.

Cool beans.
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#247389 - 09/23/04 06:31 PM Re: 100% Electronic
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,844
Pulling people out of the ditc...
Quote:

Cool beans




What? I've heard of red beans...
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#247390 - 09/23/04 09:01 PM Re: 100% Electronic
homestar Offline
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Joined: Feb 2001
Posts: 2,245
US of A
I don't know. It must be a Midwest thing.
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