Good Morning,

My institution participates in shared branching where one of our members can go into another participating institution and make deposits into their account with us. Let's say I am Bank A. One of our members goes into Bank B and deposits several items. One of those items gets returned. The item is being returned to us, Bank A, instead of Bank B which is the BOFD. Any idea why this is happening or if this is allowed? I contacted the Fed and they seemed to have no idea what I was talking about.

Any help, as always, is greatly appreciated.

I'm guessing that Bank B uses a special indorsement that identifies the institution holding the account receiving the deposit, rather than itself. Else, there would be no "trail" back to Bank A.

A return to Bank A in such circumstances is actually preferable, since it protects Bank A from loss by giving it notice of the return sooner than possible if the check were returned to Bank B and Bank B had to notify Bank A of the charge-back.

I am assuming you are a credit union participating in Shared branching. In which case that branch that accepted the deposit for you is acting as your agent (or like one of your branches)therefore you are the BOFD.

As John stated, the branch that your member made the deposit into would have endorsed the back of the check with your routing info (or atleast should have per shared branching operating rules).

Would you be able to tell me where I could find this information?

If you are asking about where you can find documentation for what DD Regs and I have said, look to your shared branch operating agreement.