Answer:
by Ken Golliher:
The answer has not changed since 1988...
Some banks willingly verify funds based on the fact that the disclosure is in response to a transaction initiated by their customer. Some do not.
The fact that a check is drawn on a bank that does not verify funds has no legal, logical, or practical connection to whether or not there are sufficient funds to pay the item; i.e. it does not constitute "reasonable cause to doubt collectability."
Answer:
by Randy Carey:
Just to follow up on Ken's statements, the regulation states the following:
(e) Reasonable cause to doubt collectibility--
(1) In general. Sections 229.10(c) and 229.12 do not apply to a check deposited in an account at a depositary bank if the depositary bank has reasonable cause to believe that the check is uncollectible from the paying bank. Reasonable cause to believe a check is uncollectible requires the existence of facts that would cause a well-grounded belief in the mind of a reasonable person.
Because a bank does not engage in the practice of verifying funds does not lead a reasonable person to believe that the check is going to be returned. There is no existence of facts - just the lack of them.
Answer:
by John Burnett:
The Federal Reserve and now the CFPB have failed to make any changes to Regulation CC since 2010, when the consolidation of the Federal Reserve check processing regions was completed. The Fed has floated a proposal to update the rule, but neither that proposal nor a proposed revision to the proposal would change the fact that the absence of information regarding a check does not lead to a reasonable belief ... etc.
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