(a) General disclosure requirement and content. Each bank shall
provide, in accordance with paragraph (b) of this section, a brief
disclosure to each of its consumer customers that describes—
(1) that a substitute check is the legal
equivalent of an original check; and
(2) the consumer recredit rights that apply
when a consumer in good faith believes that a substitute check was
not properly charged to his or her account.
(b) Distribution.
(1) Disclosure
to consumers who receive paid checks with periodic account statements. A bank shall provide the disclosure described in paragraph (a) of
this section to a consumer customer who receives paid original checks
or paid substitute checks with his or her periodic account statement—
(i) no later than the first regularly scheduled communication with
the consumer after October 28, 2004, for each consumer who is a customer
of the bank on that date; and
(ii) at the time the customer relationship
is initiated, for each customer relationship established after October
28, 2004.
(2) Disclosure to consumers who receive
substitute checks on an occasional basis.
(i) The
bank shall provide the disclosure described in paragraph (a) of this
section to a consumer customer of the bank who requests an original
check or a copy of a check and receives a substitute check. If feasible,
the bank shall provide this disclosure at the time of the consumer’s
request; otherwise, the bank shall provide this disclosure no later
than the time at which the bank provides a substitute check in response
to the consumer’s request.
(ii) The bank shall provide the disclosure
described in paragraph (a) of this section to a consumer customer
of the bank who receives a returned substitute check, at the time
the bank provides such substitute check.
(3) Multiple
account holders. A bank need not give separate disclosures to
each customer on a jointly held account.
