(a) Return of checks.
(1) Subject to the requirement of expeditious
return under paragraph (b) of this section, a returning bank may send
a returned check to the depositary bank, to any other bank agreeing
to handle the returned check, or as provided in paragraph (a)(2) of
this section.
(2) A
returning bank that is unable to identify the depositary bank with
respect to a check may send the returned check to any collecting bank
that handled the returned check for forward collection if the returning
bank was not a collecting bank with respect to the returned check,
or to a prior collecting bank, if the returning bank was a collecting
bank with respect to the returned check. A returning bank sending
a returned check under this paragraph to a bank must advise the bank
to which the returned check is sent that the returning bank is unable
to identify the depositary bank.
(3) A returning bank may convert a check
to a qualified returned check. A qualified returned check shall be
encoded in magnetic ink with the routing number of the depositary
bank, the amount of the returned check, and a “2” in the case of an
original check (or a “5” in the case of a substitute check) in position
44 of the qualified return MICR line as a return identifier. A qualified
returned original check shall be encoded in accordance with ANS X9.13,
and a qualified returned substitute check shall be encoded in accordance
with ANS X9.100-140.
(b) Expeditious return of checks.
(1) Except as provided in paragraph (c)
of this section, a returning bank shall return a returned check in
an expeditious manner such that the check would normally be received
by the depositary bank not later than 2 p.m. (local time of the depositary
bank) on the second business day following the banking day on which
the check was presented to the paying bank.
(2) If the second business day following
the banking day on which the check was presented to the paying bank
is not a banking day for the depositary bank, the returning bank satisfies
the expeditious return requirement if it sends the returned check
in a manner such that the depositary bank would normally receive the
returned check not later than 2 p.m. (local time of the depositary
bank) on the depositary bank’s next banking day.
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(c) Exceptions to the expeditious return
of checks. The expeditious return requirement of paragraph (b)
of this section does not apply if—
(1) The check is deposited in a depositary
bank that is not subject to subpart B of this part;
(2) A paying bank is unable to identify
the depositary bank with respect to the check; or
(3) The bank handles a misrouted returned
check pursuant to section 229.33(f).
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(d) Notice in lieu of return. If a
check is unavailable for return, the returning bank may send in its
place a copy of the front and back of the returned check, or, if no
such copy is available, a written notice of nonpayment containing
the information specified in section 229.31(c). The copy or written
notice shall clearly state that it constitutes a notice in lieu of
return. A notice in lieu of return is considered a returned check
subject to the requirements of this section and the other requirements
of this subpart.
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(e) Settlement. A returning bank shall settle with a bank sending a returned check
to it for return by the same means that it settles or would settle
with the sending bank for a check received for forward collection
drawn on the depositary bank. This settlement is final when made.
(f) Charges. A returning
bank may impose a charge on a bank sending a returned check for handling
the returned check.
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(g) Reliance on routing
number. A returning bank may return a returned check based on
any routing number designating the depositary bank appearing on the
returned check in the depositary bank’s indorsement or in magnetic
ink on a qualified returned check.
