(a) Circumstances giving rise to a claim. A bank that has an indemnity
claim under section 229.53 with respect to a substitute check may
make an expedited-recredit claim against an indemnifying bank if—
(1) the claimant bank or a
bank that the claimant bank has indemnified—
(i) has received a
claim for expedited recredit from a consumer under section 229.54;
or
(ii) would have
been subject to such a claim if the consumer account had been charged
for the substitute check;
(2) the claimant bank is obligated to provide
an expedited recredit with respect to such substitute check under
section 229.54 or otherwise has suffered a resulting loss; and
(3) the production of
the original check or a sufficient copy is necessary to determine
the validity of the charge to the consumer account or the validity
of any warranty claim connected with such substitute check.
9-578.1
(b) Procedures for making claims. A claimant bank shall send its claim to the indemnifying bank, subject
to the timing, content, and form requirements of this section.
(1) Timing of claim. The claimant bank shall submit its claim such
that the indemnifying bank receives the claim by the end of the 120th
calendar day after the date of the transaction that gave rise to the
claim.
(2) Content of claim. The claimant bank’s claim
shall include the following information:
(i) a description of
the consumer’s claim or the warranty claim related to the substitute
check, including why the bank believes that the substitute check may
not be properly charged to the consumer account;
(ii) a statement that the claimant bank
is obligated to recredit a consumer account under section 229.54 or
otherwise has suffered a loss and an estimate of the amount of that
recredit or loss, including interest if applicable;
(iii) the reason why production of the
original check or a sufficient copy is necessary to determine the
validity of the charge to the consumer account or the warranty claim;
and
(iv) sufficient
information to allow the indemnifying bank to identify the substitute
check and investigate the claim.
(3) Requirements
relating to copies of substitute checks. If the information submitted
by a claimant bank under paragraph (b)(2) of this section includes
a copy of any substitute check, the claimant bank shall take reasonable
steps to ensure that the copy cannot be mistaken for the legal equivalent
of the check under section 229.51(a) or sent or handled by any bank,
including the indemnifying bank, for forward collection or return.
(4) Form and submission of claim; computation of
time. The indemnifying bank may, in its discretion, require the
claimant bank to submit the information required by this section in
writing, including a copy of the paper or electronic claim submitted
by the consumer, if any. An indemnifying bank that requires a written
submission—
(i) may permit the claimant bank to
submit the written claim electronically;
(ii) shall inform a claimant bank that
submits a claim orally of the written claim requirement at the time
of the oral claim; and
(iii) shall compute the 10-day time period for acting on the claim
described in paragraph (c) of this section from the date on which
the bank received the written claim.
9-578.2
(c) Action on claims. No later than
the 10th business day after the banking day on which the indemnifying
bank receives a claim that meets the requirements of paragraph (b)
of this section, the indemnifying bank shall—
(1) recredit the claimant bank for the
amount of the claim, up to the amount of the substitute check, plus
interest if applicable;
(2) provide to the claimant bank the original check or a sufficient
copy; or
(3) provide
information to the claimant bank regarding why the indemnifying bank
is not obligated to comply with paragraph (c)(1) or (c)(2) of this
section.
(d) Recredit does not abrogate other liabilities. Providing a recredit
to a claimant bank under this section does not absolve the indemnifying
bank from liability for claims brought under any other law or from
additional damages under section 229.53 or section 229.56.
9-578.3
(e) Indemnifying bank’s right to a refund.
(1) If a claimant bank reverses
a recredit it previously made to a consumer account under section
229.54 or otherwise receives reimbursement for a substitute check
that formed the basis of its claim under this section, the claimant
bank shall provide a refund promptly to any indemnifying bank that
previously advanced funds to the claimant bank. The amount of the
refund to the indemnifying bank shall be the amount of the reversal
or reimbursement obtained by the claimant bank, up to the amount previously
advanced by the indemnifying bank.
(2) If the indemnifying bank provides the
claimant bank with the original check or a sufficient copy under paragraph
(c)(2) of this section, section 229.53(b)(3) governs the indemnifying
bank’s entitlement to repayment of any amount provided to the claimant
bank that exceeds the amount of losses the claimant bank incurred
up to that time.
