To the Chief Operations Officer of Each Depository Institution
in the Second Federal Reserve District:
The Federal Reserve Banks have amended Operating Circular 3 (“OC3”), Collection of Cash Items and Returned Checks.
Under an amendment to Federal Reserve Board Regulation CC which becomes effective July 1, 2006, a bank that transfers or presents to another bank a remotely created check warrants that the remotely created check was properly authorized. The current amendment to OC3 inserts a new subparagraph 20.10, which creates an adjustment procedure through which a paying bank that has received a remotely created check from a Federal Reserve Bank may assert the new warranty claim regarding remotely created checks. Under the new subparagraph 20.10, a bank has up to 90 days after a Reserve Bank presents a remotely created check to initiate an adjustment request based on a claim that the remotely created check was not authorized.
If the paying bank submits a properly completed adjustment request under the new subparagraph 20.10, the Reserve Bank will provide a credit to the requesting bank and will debit the sending bank. Thereafter, the sending bank must deal directly with the requesting bank or another non-Reserve Bank party to resolve any claims or defenses related to the adjustment or the warranty set forth in Section 229.34(d) of Regulation CC with respect to the check.
The amendment to OC3 is effective on July 1, 2006. Your continued use of the Reserve Bank’s check collection services on or after that date will constitute agreement to the new terms of the operating circular.
See the operating circulars page of the Federal Reserve Services website for the official versions of these amended circulars. To request a paper copy of the operating circulars, contact your Customer Contact Center.