![]() ![]() Thankfully, the Federal Reserve carved out an exception to this rule. Many in the industry believe this change will deter banks from offering remote deposit capture service, while others think the remote deposit capture bank is in the best position to prevent multiple deposits of the same item. In other words, the rule shifts the risk of loss to the remote deposit capture bank. Under the new rules, the bank that accepts the remote deposit capture indemnifies the bank that receives a later deposit of the original paper check against the risk that the paper check will be deposited again. ![]() Typically, the bank that ends up paying the original paper check will bring a UCC claim against the check writer (who then has little redress unless he or she can track down the individual who cashed the check twice). When this happens (and yes, it happens quite frequently), several parties are stuck arguing about who should take the loss. For example, when a person uses remote deposit capture, he or she retains the original paper check, which he or she could attempt to cash again. Shifting the Loss for Remote Deposit CaptureĪlthough remote deposit capture is convenient for customers, the service can be a nightmare for a bank. Here are the highlights of a few of the Federal Reserve's amendments to Reg CC: These amendments will take effect on July 1, 2018, and they aim to recognize current collection practices. In June 2017, the Federal Reserve issued final amendments to Reg CC to get with the times, and the CFPB is expected to do the same shortly. Thankfully, the law is getting a modern makeover to acknowledge the fact that today's check collection world is now virtually entirely electronic. You might be surprised to learn that a large chunk of Reg CC still applies only to paper checks. But think about how much banking has evolved over the last quarter century, especially in light of the widespread use of electronic items, checks, and processing systems. Since 1992, Reg CC-which governs funds availability and how financial institutions handle check collection and return processes-has stayed mostly the same. Times have changed, but oddly Reg CC hasn’t. Yes, that was when Sir Mix-a-Lot was “back” on the top of the charts, audiences were eating up Silence of the Lambs, and bowl cuts were a thing. Regulation CC first became law back in 1992. ![]()
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