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Consumer Banking and Payments Law: C. 229.53(c) Subrogation of Rights

1. A bank that pays an indemnity claim is subrogated to the rights of the person it indemnified, to the extent of the indemnity it provided, so that it may attempt to recover that amount from another person based on an indemnity, warranty, or other claim. The person that the bank indemnified must comply with reasonable requests from the indemnifying bank for assistance with respect to the subrogated claim. Example. A paying bank indemnifies a drawer for a substitute check that the drawer alleged was a forgery that would have been detected had the original check instead been presented.

Consumer Banking and Payments Law: A. 229.54(a) Circumstances Giving Rise to a Claim

1. A consumer may make a claim for expedited recredit under this section only for a substitute check that he or she has received and for which the bank charged his or her deposit account. As a result, checks used to access loans, such as credit card checks or home equity line of credit checks, that are reconverted to substitute checks would not give rise to an expedited recredit claim, unless such a check was returned unpaid and the bank charged the consumer’s deposit account for the amount of the returned check.

Consumer Banking and Payments Law: B. 229.54(b) Procedures for Making Claims

1. The consumer must submit his or her expedited recredit claim to the bank within 40 calendar days of the later of the day on which the bank mailed or delivered, by a means agreed to by the consumer, (1) the periodic account statement containing information concerning the transaction giving rise to the claim, or (2) the substitute check giving rise to the claim.

Consumer Banking and Payments Law: C. 229.54(c) Action on Claims

1. If the bank has not determined whether or not the consumer’s claim is valid by the end of the 10th business day after the banking day on which the consumer submitted the claim, the bank must by that time recredit the consumer’s account for the amount of the consumer’s loss, up to the lesser of the amount of the substitute check or $2,500, plus interest if the account is an interest-bearing account.

Consumer Banking and Payments Law: D. 229.54(d) Availability of Recredit

1. The availability of a recredit provided by a bank under § 229.54(c) is governed solely by § 229.54(d) and therefore is not subject to the availability provisions of subpart B. A bank generally must make a recredit available for withdrawal no later than the start of the business day after the banking day on which the bank provided the recredit.

Consumer Banking and Payments Law: E. 229.54(e) Notices Relating to Consumer Expedited Recredit Claims

1. A bank must notify a consumer of its action regarding a recredit claim no later than the business day after the banking day that the bank makes a recredit, determines a claim is not valid, or reverses a recredit, as appropriate. As provided in § 229.58, a bank may provide any notice required by this section by U.S. mail or by any other means through which the consumer has agreed to receive account information.

Consumer Banking and Payments Law: F. 229.54(f) Recredit Does Not Abrogate Other Liabilities

1. The amount that a consumer may recover under § 229.54 is limited to the lesser of the amount of his or her loss or the amount of the substitute check, plus interest on that amount if his or her account earns interest. However, a consumer’s total loss associated with the substitute check could exceed that amount, and the consumer could be entitled to additional damages under other law.

Consumer Banking and Payments Law: A. 229.55(a) Circumstances Giving Rise to a Claim

1. This section allows a bank to make an expedited recredit claim under two sets of circumstances: first, because it is obligated to provide a recredit, either to the consumer or to another bank that is obligated to provide a recredit in connection with the consumer’s claim; and second, because the bank detected a problem with the substitute check that, if uncaught, could have given rise to a consumer claim.

Consumer Banking and Payments Law: C. 229.55(c) Action on Claims

1. An indemnifying bank that responds to an interbank expedited recredit claim by providing the original check or a sufficient copy of the original check need not demonstrate why that claim or the underlying consumer expedited recredit claim is or is not valid.

Consumer Banking and Payments Law: A. 229.56(a) Measure of Damages

1. In general, a person’s recovery under this section is limited to the amount of the loss up to the amount of the substitute check that is the subject of the claim, plus interest and expenses (including costs and reasonable attorney’s fees and other expenses of representation) related to that substitute check.

Consumer Banking and Payments Law: D. 229.56(d) Notice of Claims

1. This paragraph is designed to adopt the notice of claim provisions of U.C.C. 4-207(d) and 4-208(e), with an added provision that a timely § 229.54 expedited recredit claim satisfies the generally-applicable notice requirement. The time limit described in this paragraph applies only to notices of warranty and indemnity claims. As provided in § 229.56(c), all actions under § 229.56 must be brought within one year of the date that the cause of action accrues.

Consumer Banking and Payments Law: B. 229.57(b) Distribution

1. A consumer may request a check or a copy of a check on an occasional basis, such as to prove that he or she made a particular payment. A bank that responds to the consumer’s request by providing a substitute check must provide the required disclosure at the time of the consumer’s request if feasible. Otherwise, the bank must provide the disclosure no later than the time at which the bank provides a substitute check in response to the consumer’s request.

Consumer Banking and Payments Law: XXXVII. Variation by Agreement

Section 229.60 provides that banks involved in an interbank expedited recredit claim under § 229.55 may vary the terms of that section by agreement, but otherwise no person may vary the terms of subpart D by agreement. A bank’s decision to provide more generous protections for consumers than this subpart requires, such as by providing consumers additional time to submit expedited claims under § 229.54 under non-exigent circumstances, would not be a variation prohibited by § 229.60.

Consumer Banking and Payments Law: A. Introduction

1. Appendix C contains model disclosure, clauses, and notices that may be used by banks to meet their disclosure and notice responsibilities under the regulation. Banks using the models (except models C-22 through C-25) properly will be deemed in compliance with the regulation’s disclosure requirements.

2. Information that must be inserted by a bank using the models is italicized within parentheses in the text of the models. Optional information is enclosed in brackets.

Consumer Banking and Payments Law: B. Model Availability Policy and Substitute Check Policy Disclosures, Models C-1 through C-5A

1. Models C-1 through C-5 generally.

a. Models C-1 through C-5A are models for the availability policy disclosures described in § 229.16 and substitute check policy disclosure described in § 229.57. The models accommodate a variety of availability policies, ranging from next-day availability to holds to statutory limits on all deposits. Model C-3 reflects the additional disclosures discussed in §§ 229.16 (b) and (c) for banks that have a policy of extending availability times on a case-by-case basis.

Consumer Banking and Payments Law: C. Model Clauses, Models C-6 Through C-11A

1. Models C-6 through C-11A generally. Certain clauses like those in the models must be incorporated into a bank’s availability policy disclosure under certain circumstances. The commentary to each clause indicates when a clause similar to the model clause is required.

2. Model C-6 Holds on other funds (check cashing). A bank that reserves the right to place a hold on funds already on deposit when it cashes a check for a customer, as addressed in § 229.19(e), must incorporate this type of clause in its availability policy disclosure.

Consumer Banking and Payments Law: D. Model Notices, Models C-12 through C-25

1. Models C-12 through C-25 generally. Models C-12 through C-25 provide models of the various notices required by the regulation. A bank that cashes a check and places a hold on funds in an account of the customer (see § 229.19(e)) should modify the model hold notice accordingly. For example, the bank could replace the word “deposit” with the word “transaction” and could add the phrase “or cashed” after the word “deposited.”

Consumer Banking and Payments Law: 12 C.F.R. § 7.4007 Deposit-taking by national banks.

(a) Authority of national banks. A national bank may receive deposits and engage in any activity incidental to receiving deposits, including issuing evidence of accounts, subject to such terms, conditions, and limitations prescribed by the Comptroller of the Currency and any other applicable Federal law.

(b) Applicability of state law. A national bank may exercise its deposit-taking powers without regard to state law limitations concerning:

Consumer Banking and Payments Law: Introduction and Listing of Provisions

Title 31—Money and Finance–Treasury

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Chapter II. Fiscal Service, Department of the Treasury

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Part 208. Management of Federal Agency Disbursements

Sec.

208.1 Scope and application.

208.2 Definitions.

208.3 Payment by electronic funds transfer.

208.4 Waivers.

208.5 Accounts for disbursement of Federal payments.