Since Reg E has not been updated to keep up with new technology applications, how are other banks handling customer claims of missing mobile device deposits which are images of the check and not paper check deposits made through mobile devices like tablets?

§ 1005.2 Definitions (h) “Electronic terminal” means an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-of-sale terminals, automated teller machines (ATMs), and cash dispensing machines.

(c) Exclusions from coverage. The term “electronic fund transfer” does not include:

(1) Checks. Any transfer of funds originated by check, draft, or similar paper instrument; or any payment made by check, draft, or similar paper instrument at an electronic terminal.

Since the deposit is an image and not a paper check, would it then not be excluded? Since a tablet that is not a "telephone" has a camera and can access the internet and therefore the mobile banking application would allow customers to deposit these images, wouldn't these be subject to Reg E?

Assistance please!

Remote Deposit Capture items are not EFTs subject to Regulation E. They retain their "check" coverage by the UCC. That's true whether the capturing is done by a merchant's terminal or by a consumer's mobile device.

Just to clarify this point: The items in CARM9's question would be Check 21 items, so Reg E would not apply; however, RDC can also be used to convert checks into ACH items (e.g. ARC, BOC, or POP) which are subject to Reg E. Usually only businesses have the ability to convert checks into ACHs, not a consumer using their phone as a capture device.

Absolutely correct. If the items were converted to ACH (almost entirely restricted to business accounts), they would be subject to Reg E if drawn on a consumer account.

Tablet (iPad) RDC typically does not convert checks to ACH; they are just Check21 images.

However, business mobile capture is getting huge... the big boys all offer it, but no check conversions yet. Is your bank working on that, CARM9?

We are going to offer deposits by mobile phone. My bank is asking if we can ask customers to agree to a delay in crediting of deposits. Is it possible for us to do that and still be in compliance with Reg. CC?

In my opinion, yes. It has been unofficially said by the Fed that RDC deposits are not subject to Regulation CC. I'd be happier if the Fed could lay that out in official form.

From a competitive perspective, though, you might not gain any fans by doing so.

We've been offering RDC for commercial accounts for 6 years now and it works great. However, the whole concept of consumer RDC via mobile devices is, to our way of thinking, risky to say the least. How do you control for things like 1) duplicate deposits or checks? 2) endorsements particularly third-party checks, 3) deposit limits, 4) enforcement of UCC compliance? In our current software and RDC agreements with business clients, these are all clearly spelled out and the software helps especially with dups and deposit limits. I'm not comfortable that mobile apps are to that level of sophistication. Plus there's the whole "know your customer" concept which says you should limit RDC to good-risk clients, much as you do (or should do) for ACH origination. How do you do that with some college kid and his iPhone who wants to deposit Dad's checks to his account? Anyway, we're very reluctant to get into the consumer RDC arena and our clients who use mobile banking extensively don't handle many checks as it is. They're almost 100% bill pay and ACH users.
Just our take on the subject....Thanks.

Thank you all for your assistance!