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Remote Capture Policy

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Question: 
What regulations should be considered as we write our Remote Capture policy (Check 21, Reg E, Reg CC, etc.)?
Answer: 

If your remote capture strategy will permit the conversion of checks into ACH entries, Reg E should be high on your list, particularly in light of recent changes mandating disclosures as a condition for conversion, as should NACHA rules relating to the same concerns. Now that NACHA rules no longer require that check converters destroy source documents, you should carefully cover the responsibilities of the converter for security not only for the physical documents (to prevent double-presentment), but also for the information on those documents.

If you accept images of captured checks for deposit, you're likely to become a reconverting bank by producing substitute checks for the clearing of some of those items. Accordingly, you should be clear on the responsibilities of reconverting banks, and the warranties they give with regard to substitute checks (Reg CC). That leads back to making certain that your contract with image-capturing depositors covers their liability to you for the clarity and accuracy of the images they send and their security for the source documents.

Also with regard to Reg CC, you'll need to be aware that current interpretations suggest that remotely-captured items, if deposited electronically, are not subject to Reg CC (because they are not deposited at a bank branch). That could change, of course, so you need to watch for any regulatory change or interpretation that pulls these items under the regulation. In the meantime, your contract should provide for the availability of funds deposited in this way.

First published on BankersOnline.com 4/30/07

First published on 04/30/2007

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