Description
PAGES TOTAL: 18
Public Law 108–100 108th Congress
An Act
To facilitate check truncation by authorizing substitute checks, to foster innovation in the check collection system without mandating receipt of checks in electronic form, and to improve the overall efficiency of the Nation’s payments system, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Check Clearing for the 21st Century Act’’ or the ‘‘Check 21 Act’’.
(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings; purposes.
Sec. 3. Definitions.
Sec. 4. General provisions governing substitute checks. Sec. 5. Substitute check warranties.
Sec. 6. Indemnity.
Sec. 7. Expedited recredit for consumers.
Sec. 8. Expedited recredit procedures for banks.
Sec. 9. Delays in an emergency.
Sec. 10. Measure of damages.
Sec. 11. Statute of limitations and notice of claim.
Sec. 12. Consumer awareness.
Sec. 13. Effect on other law.
Sec. 14. Variation by agreement.
Sec. 15. Regulations.
Sec. 16. Study and report on funds availability.
Sec. 17. Statistical reporting of costs and revenues for transporting checks between
Federal Reserve banks.
Sec. 18. Evaluation and report by the Comptroller General. Sec. 19. Depositary services efficiency and cost reduction. Sec. 20. Effective date.
SEC. 2. FINDINGS; PURPOSES.
(a) FINDINGS.—The Congress finds as follows:
(1) In the Expedited Funds Availability Act, enacted on
August 10, 1987, the Congress directed the Board of Governors of the Federal Reserve System to consider establishing regula- tions requiring Federal reserve banks and depository institu- tions to provide for check truncation, in order to improve the check processing system.
(2) In that same Act, the Congress—
(A) provided the Board of Governors of the Federal
Reserve System with full authority to regulate all aspects of the payment system, including the receipt, payment, collection, and clearing of checks, and related functions of the payment system pertaining to checks; and
12 USC 5001.
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117 STAT. 1178
12 USC 5002.
PUBLIC LAW 108–100—OCT. 28, 2003
(B) directed that the exercise of such authority by the Board superseded any State law, including the Uniform Commercial Code, as in effect in any State.
(3) Check truncation is no less desirable in 2003 for both
financial service customers and the financial services industry, to reduce costs, improve efficiency in check collections, and expedite funds availability for customers than it was over 15 years ago when Congress first directed the Board to consider establishing such a process.
(b) PURPOSES.—The purposes of this Act are as follows:
(1) To facilitate check truncation by authorizing substitute
checks.
(2) To foster innovation in the check collection system
without mandating receipt of checks in electronic form.
(3) To improve the overall efficiency of the Nation’s pay-
ments system.
SEC. 3. DEFINITIONS.
For purposes of this Act, the following definitions shall apply: (1) ACCOUNT.—The term ‘‘account’’ means a deposit account
at a bank.
(2) BANK.—The term ‘‘bank’’ means any person that is
located in a State and engaged in the business of banking and includes—
(A) any depository institution (as defined in section 19(b)(1)(A) of the Federal Reserve Act);
(B) any Federal reserve bank;
(C) any Federal home loan bank; or (D) to the extent it acts as a payor—
(i) the Treasury of the United States;
(ii) the United States Postal Service;
(iii) a State government; or
(iv) a unit of general local government (as defined
in section 602(24) of the Expedited Funds Availability
Act).
(3) BANKING TERMS.—
(A) COLLECTING BANK.—The term ‘‘collecting bank’’ means any bank handling a check for collection except the paying bank.
(B) DEPOSITARY BANK.—The term ‘‘depositary bank’’ means—
(i) the first bank to which a check is transferred, even if such bank is also the paying bank or the payee; or
(ii) a bank to which a check is transferred for deposit in an account at such bank, even if the check is physically received and indorsed first by another bank.
(C) PAYING BANK.—The term ‘‘paying bank’’ means—
(i) the bank by which a check is payable, unless the check is payable at or through another bank and is sent to the other bank for payment or collection; or
(ii) the bank at or through which a check is payable and to which the check is sent for payment or collec- tion.
(D) RETURNING BANK.—
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PUBLIC LAW 108–100—OCT. 28, 2003 117 STAT. 1179
(i) IN GENERAL.—The term ‘‘returning