The substitute check was paid first. The original check was presented later, so it was returned. to Bank C, which charges the check back to the check cashing firm. The check cashing firm doesn't have an indemnity claim against Bank A, and Bank C doesn't have one, either, because it sustains no loss if it charges it back to its depositor (the check cashing firm). The check cashing firm's only recourse is to go after the check payee who cashed the check with them.
Bank A provided the indemnity under 229.34(f), but there is no one who can claim it.
Last edited by John Burnett; 04/03/19 08:22 PM. Reason: correcting word choices
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8