What’s changing with Reg CC?

Recently, the Federal Reserve released changes to Regulation CC (Reg CC) intended to reflect an industry-wide transition to an electronic, image-based check collection and returns environment. These final modifications take effect July 1, 2018.

Highlights from the Reg CC changes include:

Reg CC to Cover Electronic Checks. Images of an original paper check are now included in Reg CC. They will be treated the same as original paper checks.

Electronic Check Warranties. New warranties were created that apply to the exchange of electronic checks. The transferring bank warrants that check images accurately represent information on the front and back of the original check. Additionally, the warranty affirms that there’s no duplicate payment of the electronic check.

Indemnity for Duplicate Payment from Remote Deposit Capture (RDC). This new indemnity protects a depository bank that received as unpaid a paper check deposit after the check was previously deposited by RDC at another depository bank. Under this indemnity, the depository bank accepting the original paper check is able to recover a loss from the depository bank receiving the item through RDC.

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