#Regulation cc check 21 code#

After Dodd-Frank, jurisdiction over Regulation CC was split down the middle. So who has the authority to interpret Regulation CC? Before the CFPB was created, the Federal Reserve Bank (FRB) had authority over Regulation CC. The issue with RDC deposits is that a mobile app deposit does not fit within the strict reading of Regulation CC's definitions of a 'check deposit' referenced throughout the rule. Rather, the ability of a member to deposit a check through RDC usually resides in the credit union's mobile banking app. However, these 'checks' are not deposited by traditional means like at a branch or an ATM. So it would appear that checks converted to images and remotely deposited may fit the definition.

#Regulation cc check 21 code#

While checks must originate in paper form, the model Uniform Commercial Code provides that the term “item” or “check” includes transmission of an image pursuant to agreement. Regulation CC defines a check as a “negotiable demand draft drawn on or payable through or at an office of a bank.” See, 12 C.F.R. While this technology eliminated the need to provide the original check to the credit union, it also left many credit unions wondering if they had to follow Regulation CC funds availability requirements. Check 21 facilitates the check collection process by permitting a member to scan a check and simply transmit the electronic images and data from the check to the credit union in order to deposit funds. The process of remotely depositing checks is not new it has been around since the passing of the 21st Century Act (Check 21) in 2003. Over the years, NAFCU's Compliance team has been asked if Regulation CC's funds availability schedule applies to checks deposited through remote deposit capture (RDC).

By Stephanie Lyon, Regulatory Compliance Counsel