We deal with the Houston Fed. We just received two small items back thru Fed as forgeries. The paying bank had already stamped them PAID in June and now has pulled them out and returned them as forgeries. The Fed allowed them to do this. However, because the items are under $100 each, we cannot refuse the returns thru Fed as late returns, but must charge them back to our customer and wait for the customer to complain, at which time we can deal with the other bank.

Does this sound right? What happened to the 24 hour rule?

Check out this prior thread and see if it sheds some light with the UCC cites and deposit agreement terms generally required.