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Highlight Updates The Check Clearing System and Remotely Created Checks and Payment Orders

The check clearing system involves several players: the bank on which the check is written (“drawee bank” or “payor bank”), the bank in which the check is deposited (the “depository bank”), and often intermediary banks that collect and transfer the check to its final destination. These relationships are discussed and diagramed in §§ 3.2.2 and 3.2.3, infra.

Check cashers also play a role in the check system for consumer without a bank account.80 The check casher’s bank is the depository bank in that situation.

When a remotely created check (RCC) or a remotely created payment order (RCPO)81 is used to withdraw funds from a consumer’s account, a payment processor typically creates the RCC or RCPO and deposits it through its bank. The payment processor may be an independent third party or it may be a subsidiary or affiliate of a depository bank. In some cases, the payment processor may act on behalf of other payment processors, attenuating the chain between the original payee and the depository bank.


  • 80 {79} Check cashing is discussed in § 4.11, infra. Check cashers may also be engaged in other activities covered by money service business licenses. See § 6.6.4, infra.

  • 81 {80} These types of payments are described in §§ 3.3.2, 3.13.5, infra.