• Mid-South Regulatory Compliance Group Quarterly Report Vol. 15 No. 1
  • March 29, 2018
  • At long last, the Federal Reserve Board issued a final rule amending Regulation CC – Expedited Funds Availability and Collection of Checks. Issued in June of 2017, the rule becomes effective July 1, 2018. As everyone knows, Reg. CC implements the Expedited Funds Availability Act of 1987 (EFA Act) and the Check Clearing for the 21st Century Act of 2003 (Check 21 Act) which dealt with prompt funds availability for deposited items and collection and return of paper checks and substitute checks. In this latest rule, the Board modified subparts A, B and C of the regulation to recognize today’s environment in which almost all check collection and returns are handled electronically and to encourage all banks to receive, send, and return the few remaining paper checks electronically. In brief, the Board retained the current same-day settlement rule for paper checks, applied Reg. CC's existing check warranties under subpart C to checks that are collected electronically, and adopted new warranties and indemnities related to checks collected and returned electronically and to electronically-created checks. The changes will be particularly helpful in sorting out who is responsible for double presentment when a check is deposited via remote deposit capture (RDC) and (somehow by hook or crook) the original check is also deposited somewhere. In this article, we will provide a little background and then summarize the major changes contained in the new rule.