How to Handle A Returned Check

Answered by:

Question:

How should a returned check be handled in the branch? Does the customer need to be notified in advance of the returned check before the funds are debited from their account?

Answer:

12 CFR 229.33 Notice of nonpayment.

(d) Notification to customer. If the depositary bank receives a returned check or notice of nonpayment, it shall send or give notice to its customer of the facts by midnight of the banking day following the banking day on which it received the returned check or notice, or within a longer reasonable time.

The account can be debited immediately.