Why do we allow RCCs (Remotely Created Check) in the check system? The RCCs present a problem, beyond the potential fraudulent use and AML issues, for paying banks and should for depositing banks. Why, because we have no way of knowing if the RCC was ever a paper document in the first place and if it was never a paper item then it is not a check under Reg. CC. (§ 229.2 Definitions. (ww) Original check means the first paper check issued with respect to a particular payment transaction.)
It is my understanding that these items (for consumers anyway) are in reality Reg. E transactions and should be treated as such to keep us all legal. Or, am I missing something and is there any way to identify an RCC that was never started as a piece of paper?