Timeframe for a Treasury Check Return

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Question:

How long does the Treasury have to return a check based on endorsement? Is it longer than the three year window banks use for endorsement returns?

Answer:

Actually, it's shorter. Treasury rules provide for reclamation on Treasury checks based on indorsement (their spelling) for one year after the check is processed at a Federal Reserve Bank, plus 180 days if a timely claim was made by the check payee. To be timely, a claim on a Treasury check must be made within one year; the result is that indorsement claims on Treasury checks can bite back for about 18 months from the date they are cashed, which is roughly half the time allowed for claims under the UCC.

First published on BankersOnline.com 10/08/07