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Check Retention

Question: 
If you are imaging customer checks for enclosure in their monthly statements. Must you retain the original check? If so, for how long?
Answer: 

Answer by Andy Zavoina:

Imaged items can usually (that is a keyword) be entered into evidence and used for proof of payment. This means that the paper items have less use but still take up a lot of space.

I hear of more and more banks imaging items. Many save the originals for only 3 to 6 months.

Answer: 

Answer by Mary Beth Guard:

On the BOL Launch Pad, there is a reference link to a "Complete Check Reference" that is put out by the Philadelphia Federal Reserve Bank. In it, they note that when they are doing the imaging of checks, their policy is for the checks to be retained at the Fed for 90 days and are then destroyed.

The Uniform Commercial Code simply provides, under 4-406, as follows:
"(a) The bank shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficientinformation if the item is described by item number, amount, and date of payment.
(b) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if theitems are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of seven years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item."

Keep the underlying items long enough to make sure the imaged items are intact and to handle any urgent inquiries that might require handwriting analysis, ink analysis, etc.

First published on BankersOnline.com 9/3/01

First published on 09/03/2001

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