Answer:
There's no effect on the merchant's use of the customer's signature on the reverse of the check to authorize electronic resubmission in the event of dishonor. The back of the check is imaged, just as is the front, if imaging takes place. The point of the signature is to demonstrate the customer authorized the RCK transaction if it becomes necessary. This can be done with a substitute check just as well as it can be done with the original.
Reg E is not an issue with check truncation and reconversion under Check 21. Checks that get imaged and presented in that form (or in substitute check form) are no more subject to Regulation E than they are in original form. The only connection to Reg E might be the customer's authorization on the reverse of his check that authorizes electronic resubmission and imposition of an electronic bounced check fee. That bounced check fee remains subject to Reg. E, and the truncation/reconversion of the check has no effect on the Reg. E applicability.
First published on BankersOnline.com 10/25/04
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