Remote Deposit Capture RSS Feed
Remote Deposit Capture Newsletter
Remote Deposit Capture Group on LinkedIn
Remote Deposit Capture Group onTwitter
The Green Sheet

Email Page 
Print Page 
 Add to LinkedIn Add to Twitter Add to Facebook Add to Reddit Add to StumbleUpon 
Add to Tumblr
Getting Real About Reg CC Warranties & Indemnities

Thursday, May 02, 2019 (RemoteDepositCapture.com / Patti Murphy)

Discover how new warranties and indemnities under revised Reg CC could potentially play out in real life.
Recent changes to Federal Reserve Regulation CC have made dealing with duplicate deposits a potentially more complicated situation than in the past. But that shouldn’t be seen as a deal breaker.

“Don’t be afraid of these complications,” said David Walker, President of Tiller Endeavors LLC. “The probability of these occurring is likely very low. But there are nuances and these can have important implications once you get into problem scenarios.”

Walker, who prior to forming Tiller Endeavors led the Electronic Check Clearing House Organization (ECCHO) for 17 years, was commenting on potential problem scenarios that could arise under the updated regulation during a recent webinar. The webinar, Real Life Scenarios for Updated Regulation CC, was presented by RemoteDepositCapture.com on April 25, and also included insights from Industry Consultant Phyllis Meyerson.

Amendments to Reg CC that took effect last July established new electronic check warranties that apply to all parties in the collection/presentment/return chains (drawers and financial institutions), including a warranty against duplicate payments. A new Reg CC indemnity also was created to protect from financial loss a FI that receives a deposit of an original paper check that previously was deposited via RDC and does not contain a restrictive endorsement.

Where operating under the new regulatory regime begins to get complicated is when the same check gets deposited at 2 different FIs via RDC (without restrictive endorsements) and then is deposited as a paper item at a third FI. In those situations, the third FI may make an indemnity claim against either of the FIs that accepted the check as an RDC item, although it only can receive payment from one, Walker and Meyerson noted. Additionally, an indemnity claim can be made by the third FI against one of the FIs that accepted the check as an RDC item even if the item was adjusted to that RDC-accepting FI. This effectively sets up a “double jeopardy” situation for the RDC-accepting FI, Meyerson explained. “You’ll need to analyze these situations with legal staff and operations people,” she added.

Walker and Meyerson explored numerous scenarios under the new Reg CC during the webinar. “It is time for the industry to start thinking of different scenarios,” Myerson said. “The regulation is not really pertinent until you can put real-life scenarios around it.”

Real Life Scenarios for Updated Regulation CC can be accessed here in the RemoteDepositCapture.com Webinar Library. Those completing the webinar are eligible for 1.2 NCP continuing education credits. Paid members of RemoteDepositCapture.com can view the webinar for free; the cost to nonmembers is $199.
-end-

 


Email Page 
Print Page 
 Add to LinkedIn Add to Twitter Add to Facebook Add to Reddit Add to StumbleUpon 
Add to Tumblr





Please register/login to post comments