Supreme Court To Give Decision On Reg CC Cases

The Supreme Court of the United States will soon render a court ruling over an Expedited Funds Availability Act problem.

A customer of BancOne Corp in Chicago deposited a check for $40,000 drawn on Midwest Bank and Trust. Midwest bounced the check for reason of a questionable endorsement.

BancOne guaranteed the endorsement, and redeposited the check. By this time the funds were available, according to the requirements of Reg CC, and the customer withdrew the money.

Midwest, however, returned the check again-this time for insufficient funds.

BancOne sued Midwest, saying that under the Expedited Funds Availability Act they had to list on the first return all the reasons why the check wasn't good.

Because they felt this was a federal violation, they sued in federal court, not state court. The federal appeals court in Chicago rejected the suit, referring the problem to the Federal Reserve Board.

Basically FRB said, "Not us!" and turned the case over to the Solicitor General to give to the Supreme Court. The Supreme Court has agreed to hear the case this fall. We should have a decision by winter.

Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 11, 8/95