Topic: Remote Deposit Capture (RDC)
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Are there any laws or regulations we must follow with respect to funds availability for mobile deposits? We are aware that Regulation CC is not applicable.
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We are not aware of any law or regulation applicable to funds availability for mobile deposits. Therefore, we believe that the funds availability for your customers’ mobile deposits would be governed by your account agreements and possibly your electronic presentment agreements with other banks. You are correct that Regulation CC’s funds availability provisions are not…
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We offer remote deposit capture (RDC) for our business customers. When our customers scan the checks, a message is printed on the back of the checks stating that they are “For Remote Deposit at [Bank Name] Only.” Do we need to move that message up to the “Endorse Here” area on the back of the check? Should we require a business customer to stamp the remote deposit endorsement line as well as the “Endorse Here” line on the check? We have one business customer who sometimes deposits over 100,000 checks within a few months, and we are working with that customer to relieve them from having to stamp each individual check.
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Relocating Customer Indorsements Yes, we recommend moving the message stating “For Remote Deposit at [Bank Name] Only” in the middle of the back of the check to the “Endorse Here” section at the top. Relocating this indorsement line could help to prevent it from overlapping with subsequent indorsements applied to the middle of the back…
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We have a potential business customer that would like to set up a deposit account and line of credit. The company sells point of sale (POS) solutions for businesses, by providing equipment for processing POS transactions (they use a third-party vendor to process the transactions). They employ several salespeople in many different states to sell this equipment, and they want to deposit checks by having salespeople take pictures of their checks on their phones and send them to the business owner, who would use our consumer mobile remote deposit capture (RDC) system to deposit the checks, rather than our business RDC system. What are the risks of allowing a customer to use RDC to deposit copies of checks? Does the restrictive endorsement “for mobile banking deposit only” provide sufficient protections?
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Based on the information provided, it is likely that this customer’s deposit methods will increase the risk of fraud. However, it may be possible to reduce the risk of fraud by requiring the customer’s salespeople to apply a restrictive endorsement on the checks before forwarding photos of the checks to the customer’s owner for deposit.…
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Our Bank is considering changing the way checks deposited via mobile Remote Deposit Capture (RDC) are reviewed. Currently, if a check is deposited via mobile RDC, it is either accepted or declined, and all deposits are accepted until 6:00 p.m. The deposits are processed as electronic checks and are available for withdrawal the following day. Under the new process, checks will be reviewed by bank staff periodically throughout the day until 5:00 p.m. Any checks that are deposited after 5:00 p.m. will be put into a “suspended” status and will not be reviewed or deposited into the customer’s account until the following business day. Will this new process be compliant with Regulation CC?
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Regulation CC’s availability of fund provisions are not currently applicable to electronic checks. Therefore, we believe that your bank’s policies regarding availability of funds for mobile deposits processed as electronic checks will be governed by your account agreements, which should be updated to reflect the earlier deposit cutoff time of 5:00 p.m. The Federal Reserve…
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Our commercial customer issued a paycheck to an employee. The employee deposited the item via remote deposit and then took the item to a check cashing business. We returned that deposit attempt as a duplicate item. The check casher is sending collection letters to our customer asserting that our customer is responsible for paying the item, citing 810 ILCS 5/3-302 and 720 ILCS 5/17-1A. Isn’t the employee responsible for the check casher’s loss?
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Based on the facts as described, we believe the check casher is the holder in due course of the original check and is correct in demanding payment from your customer. In addition, the check casher also has the right to demand payment from your customer’s employee. Under the rules of the UCC, both would be…
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We recently started offering remote deposit capture (RDC) for consumer accounts through mobile phones. A customer recently deposited a check using our RDC phone app. Three days later, the check was cashed at a currency exchange (we don’t know if it was our customer who cashed the check or someone else), and the currency exchange’s deposit of the check was returned. The currency exchange is demanding that we reimburse it under the Check 21 Act warranty provisions and as a “holder in due course” under the Uniform Commercial Code. Are we required to reimburse the currency exchange?
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No, we do not believe that your bank is required to reimburse the currency exchange under these circumstances. There have been two attempts to deposit this check. First, your customer deposited the check using your bank’s mobile app, and your bank successfully obtained payment from the paying bank (the bank on which the check was…
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Does Regulation CC apply to checks deposited via mobile banking?
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No, the current language in Regulation CC does not encompass mobile check deposits. Mobile deposits occur when a customer takes a picture of a check and transmits the image electronically to their bank. This process is referred to as remote deposit capture (RDC). We spoke with an attorney at the Federal Reserve Board who confirmed…