Quality Improvement Initiatives
The Federal Reserve Banks has implemented a quality improvement initiative for Check Adjustment Services.
The Federal Reserve Banks will charge a quality fee to the Depositing Bank for quality issues with work deposited with the Federal Reserve Banks. Additionally, the Federal Reserve Banks will charge a quality fee for cases submitted with incorrect or incomplete information which resulted in the prevention of automatic resolution of the request.
Quality fees are designed to encourage greater efficiency through proper case submission and improved deposit practices. The fees apply to items processed on or after January 2, 2019 and an adjustment case is received on or after January 14, 2019.
Refer to the Service Fees page on FRBServices.org for specific information on the fees.
Quality Fee Scenarios
|1. A DFI deposited an incorrectly encoded item in their deposit to the Federal Reserve Banks, resulting in an Encoding Error (ENC) adjustment reported by the Receiving Bank.
||A quality fee will be charged to the depositor. The ENC adjustment entry should be considered the notification of the quality fee charged.
|2. A DFI deposited an item more than once, in their deposit to the Federal Reserve Banks, resulting in a Paid Item (PAID) adjustment reported by the Receiving Bank.
||A quality fee will be charged to the depositor. The PAID adjustment entry should be considered the notification of the quality fee charged.
For PAID cases involving multiple paid items within a single PAID case (grouped PAID), only one quality fee will be charged.
|3. A DFI submitted an adjustment request, with incorrect or incomplete information, which resulted in the prevention of automatic resolution of the request; causing the Federal Reserve Banks to manually process and resolve the case.
||A quality fee will be charged to the Sender of the case. The Sender will receive a CA5000 (case resolution) message with an investigation type of Information Request (INFO) advising of the quality fee charge related to their request. The Sender’s Reference (SREF) number will be noted in the message.
The fee is only applicable to the following investigation types (ITYPs):
Note: A fee is not charged if the case was returned to the Sender unprocessed. For example, the Federal Reserve Banks returned the case to the Sender as we were unable to locate the item or entry with the information provided.
- Disposition (DISP)
- Encoding Error (ENC)
- Listed Not Enclosed (LNE)
- Non-Cash Item (NCH)
- Paid Item (PAID)
- Source of Receipt (SOR)
Please refer to the Check Adjustments Quick Reference Guide for additional information regarding each investigation type (ITYP).
- As of January 2, 2019, the Federal Reserve Banks will accept Warranty/Indemnity Claims (WIC) Associated with Remote Deposit Capture (RDC) Items and Warranty/Indemnity Claims (WIC) Associated with Unauthorized Electronically Created Items (UECI) for Paid Items (PAID) adjustment entries or items processed or returned on or after January 2, 2019.
- The minimum dollar threshold for a Late Return Claim (LC) and Late Return Disclaimer (LR) is $100 or greater.
- The minimum dollar threshold for all other investigation types is $0.01 or greater.
- Items typically handled through Return channels are not eligible for handling through Check Adjustments channels. For example, if you are charged with an item in your inclearings (Forward Collections) and no account is found or you have a stale dated, fraudulent or forged item, you should not submit an adjustment request for credit.
- Not Our Item (NOI) Resolution – Return Items, deposited in an X9.100-187 (X9.37) image return letter, will be resolved to the Depositor of the item with a debit NOI adjustment entry. Depositors who receive a debit entry for a NOI adjustment should research the item to determine the correct bank of first deposit (BOFD) or collecting bank if the BOFD is not identified and, if warranted, reprocess the corrected item. Refer to the Frequently Asked Questions (FAQs) for more information regarding NOIs.
- The minimum dollar threshold for all other investigation types is $0.01 or greater.Items typically handled through Return channels are not eligible for handling through Check Adjustments channels. For example, if you are charged with an item in your inclearings (Forward Collections) and no account is found or you have a stale dated, fraudulent or forged item, you should not submit an adjustment request for credit.
- Adjustment requests/inquiries must be submitted within one calendar year of the cash/return letter date or entry date.
- Electronic submission through FedLine® Solution is the preferred method of initiating adjustment requests/inquiries. Please refer to FedLine Solutions for more information on establishing access to FedLine.
- All time frames for Federal Reserve Bank action are general guidelines, which may vary depending on the circumstances of the case. Such time frames are not to be treated as legal requirements. Entries generally are provisional, subject to receipt by the Federal Reserve Bank of an offsetting entry. Regulation J (12C.F.R. Part 210, Subpart A) and Operating Circular 3 (OC 3) “Collection of Cash Items and Returned Checks” govern Federal Reserve Bank action.
- If Federal Reserve Bank Check Adjustment Services are not available because our systems are unavailable or because of circumstances beyond our control, then we, in our discretion, may extend the time frames for you to request adjustments and we may extend our time frames for providing Check Adjustment Services.
- All adjustment requests/inquiries for foreign items and government agency deposits are excluded from Federal Reserve Bank action time frames.
- Paper requests, unless otherwise specified, must include all required information and attachments. If the required information and or attachments are not provided, the requester will be notified to resubmit the request with all required information and attachments as new business.
- Paper requests should be initiated using the standard Federal Reserve Bank Check Adjustment Request Form (PDF). Institutions wishing to submit requests using their own forms must have the forms approved by the Federal Reserve Bank.
- All paper adjustment requests and live item supporting documentation should be sent to the Check Adjustments Centralized Data Entry Site.
Supporting documentation (attachments) for electronic adjustments submitted using the text (TXT) file format must be faxed to the Attachment Archive at (866) 333-6633, using the DTF Cover Sheet. Note: Supporting documentation that is submitted using fax must be received within five business days. If supporting documentation is required and not received the request will be resolved back to the requester and any provisional entry will be reversed.
For more information about check adjustment services, visit the Check Adjustment Services pages.
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