The approved amendments to Regulation CC (Reg CC) (Off-site) will become effective on July 1, 2018. These amendments reflect the evolution of the nation’s check collection process from largely paper-based to virtually all electronic and include new indemnities that will impact the adjustments accepted by the Federal Reserve Banks.
New Electronically Created Items indemnities
There are three new indemnities for Electronically Created Items (ECIs). A breakdown of these indemnities and the Federal Reserve Banks’ new Check Adjustment options are displayed in the table below.
|ECI Indemnities||Federal Reserve Banks’ Check Adjustment Options|
|The item was not derived from a paper check.||Submit a Warranty/Indemnity Claim (WIC). The WIC description will be expanded to include ECIs.|
|The item has already been paid.||Submit a Paid Item (PAID). The PAID description will be expanded to include ECIs.|
|The item was not authorized by the account holder.||Submit an Unauthorized Electronically Created Item (UECI) using the WIC investigation type (ITYP). A new adjustment option will be added to support this indemnity.|
New Remote Deposit Capture indemnity
As part of the Reg CC amendments, there is also a new Remote Deposit Capture (RDC) indemnity. This indemnity will allow an institution depositing a paper item to recover loss due to the check having already been paid through RDC. The Federal Reserve Banks’ new adjustment option for the WIC will allow institutions to submit adjustments to recover the loss of the check.
When will indemnities submission be effective?
Though the amendments to Reg CC are effective July 1, 2018, the option to submit these indemnities through the Federal Reserve Banks will be effective at a later date, which will be announced once changes to Regulation J (Reg J) (Off-site) are finalized. General requirements and information for submission of the two new ITYPs, UECI and RDC, will be reflected in the online Check Adjustments Quick Reference Guide.
What does this mean to you?
Customers with an indemnity claim associated with any of these four new indemnities will be able to submit an adjustment request to the Federal Reserve Banks once changes to Reg J are finalized. Additional information on the criteria for submitting the new indemnity claims can be found in our May 22, 2018, communication.