June 17, 2004
To: All Member Banks and Others Concerned in the Third Federal Reserve District
Attention: Chief Executive Officer and Chief Compliance Officer
Subject: PROPOSED AMENDMENTS TO REGULATION J: COLLECTION OF CHECKS AND OTHER ITEMS BY FEDERAL RESERVE BANKS AND FUNDS TRANSFERS THROUGH FEDWIRE; REQUEST FOR COMMENT
The Board of Governors of the Federal Reserve System has proposed amending Regulation J, which governs Reserve Banks’ collection of checks and other cash items, to cover the entire range of check processing services that the Reserve Banks plan to offer once the Check Clearing for the 21st Century Act takes effect on October 28, 2004.
The Check 21 Act permits banks to use substitute checks in place of original checks in the check collection or return process. The Act does not require any bank to accept checks electronically but facilitates the use of electronic transmission between banks that agree to use that technology. In light of the Act’s provisions, the Reserve Banks plan to offer a wider range of electronic check processing services. The proposed amendments would bring electronic items within the scope of Regulation J and establish new warranties and an indemnity that would apply to electronic items for which there is no other warranty and indemnity protection.
The Board’s Federal Register notice is available here (242 KB, 19 pages).
Date: Comments on the proposed rule must be received by July 26, 2004.
For Further Information: Jack K. Walton, II, Assistant Director (202/452-2660), or Joseph P. Baressi, Senior Financial Services Analyst (202/452-3959), Division of Reserve Bank Operations and Payment Systems; or Adrianne G. Threatt, Counsel (202/452-3554), Legal Division. For users of Telecommunications Device for the Deaf (“TDD”) only, contact (202) 263-4869.