I was always under the assumption that when a bank received a wire it was good funds and we give immediate credit to the beneficiary. I was told yesterday that wires were like every other transaction and had to go through "night processing" before they are good funds and that most banks just give immediate credit but are not required to. So if for some reason the wire is fraud and we send the service message requesting the wire back, as long as it hasn't gone through night processing we should be able to get the funds back. I have never heard anything like this until now. Any help?
Thanks

From the commentary to Regulation CC:

The EFA Act requires that funds deposited by wire transfer be made available for withdrawal on the business day following deposit but expressly leaves the definition of the term wire transfer to the Board.

So does this mean the receiving bank takes the risk of losing those funds by making the funds available the same day if the wire is found to be fraudulent?

We give same day availablity for incoming wires because we have never had a loss due to wire fraud. We also have a low volume of wires and anything unusual would be apparent.

Guess your comfort level would depend on the volume and $ amount of wires, whether you have high $ international wires and whether you have had frequent wire fraud.

Your bank's risk of loss could be way different than mine.

Your bank is the sole determining factor in deciding to return a wire that you have been told was fraudulent...no one can"take" the wire back, you would need to have a process in place for handling...which, if you believe it is fraudulent based on the information provided, should include a customer interview/discussion prior to returning the funds. If the customer has already withdrawn the funds, I would not be returning any funds over what is left in the account, and certainly would not put the bank at risk by returning anything I couldn't collect from the customer. Your bank may feel differently on this