With the upcoming changes to Reg. CC, how are most financial institutions addressing the restrictive endorsement for Corporate users where virtual endorsement is used? Are new scanners being purchased? New guidelines for the corporate user? What is the best way to ensure compliance with this change?

There are no actual changes that are required to stay in compliance with Reg CC. It is a risk based approach of whether you need to make changes to your endorsement requirements or not. The changes in the Reg just allow for protection for duplicate presentment if you have the physical paper item. Otherwise, if you are the bank that took the RDC or Mobile Deposit, you will need to make sure you have the restrictive endorsement. We are not making any changes at this time. 

Awaiting a call with our vendor for their guidance. As of this moment, our plan is to send endorsement stamps to all current desktop RDC clients and to do away with the virtual endorsement. Old fashioned and not ideal, but unless the vendor has an alternative that doesn't require new scanners this may be how we best achieve this.

I freaked out when i heard about this change and didn't know what we were going to do. LUCKILY We can edit our system (FISERV) and have it put a virtual endorsement on the check for scanning purposes. We didn't have to buy anything or change anything. THANK GOODNESS! We haven't set any new guidlines since we were able to change all of our customers (14 is all we have) so it was easier for us to do that. I did talk to Fiserv and they said you could also purchase a stamp for all of your MC customers but that wasn't going to be in our budget for us to be able to do that. I hope this helps.

I spoke to a representative at the Fed and they told us that in regards to the restrictive endorsement changes a virtual endorsement will not hold up as the physical item would not be restrictively endorsed. 

We have been updating our agreements and disclosures. 

We've decided for our mobile app product to turn on endorsement required. We plan to monitor and see how it does

From my understanding, the virtual endorsement will not provide you any protection from the duplicate presentment returns. We've been using the virtual endorsement option for years, but we are taking the risk based approach and not changing away from that at this point. 

As was mentioned, this really isn't a huge deal.  All it does is allow institutions accepting RDC items to protect themselves from duplicate presentment adjustments by having an endorsement present on the item, which in theory should prevent another institution from also depositing the item, and if they do, then THEY are the ones who would be liable (even though they hold the paper).

With all this talk of virtual restrictive endorsements, it makes me wonder if that's really a solution...in reading the text of the RDC-related change to Reg CC, I think the intent of the restrictive endorsement is to hopefully prevent the item being deposited elsewhere, but if the restrictive endorsement is ONLY present on the virtual copy of the item, then it really won't have that effect.  It's going to be interesting to see where this all goes...

Hello, We're also a Fiserv bank and talked about the option to enhance the virtual endorsement.
Help me understand how the virtual endorsement change will help you when the customer still has the original check in their possession without the restrictive endorsement on it.
Thank you