SECTION
229.55—Expedited-Recredit Procedures for Banks
A. 229.55(a) Circumstances Giving Rise to a Claim 1. This section allows a bank to make an expedited-recredit
claim under two sets of circumstances: first, because it is obligated
to provide a recredit, either to the consumer or to another bank that
is obligated to provide a recredit in connection with the consumer’s
claim; and second, because the bank detected a problem with the substitute
check that, if uncaught, could have given rise to a consumer claim.
2. The loss giving rise to an interbank recredit claim
could be the recredit that the claimant bank provided directly to
its consumer customer under section 229.54 or a loss incurred because
the claimant bank was required to indemnify another bank that provided
an expedited recredit to either a consumer or a bank.
Examples a. A paying bank charged a consumer’s account based on a substitute
check that contained a blurry image of a legible original check, and
the consumer whose account was charged made an expedited-recredit
claim against the paying bank because the consumer suffered a loss
and needed the original check or a sufficient copy to determine the
validity of his or her claim. The paying bank would have a warranty
claim against the presenting bank that transferred the defective substitute
check to it and against any previous transferring bank(s) that handled
that substitute check or another paper or electronic representation
of the check. The paying bank therefore would meet each of the requirements
necessary to bring an interbank expedited-recredit claim.
b. Continuing with the example in
paragraph a, if the presenting bank determined that the paying bank’s
claim was valid and provided a recredit, the presenting bank would
have suffered a loss in the amount of the recredit it provided and
could, in turn, make an expedited-recredit claim against the bank
that transferred the defective substitute check to it.
9-578.5
1. An interbank recredit claim under this section must
be brought within 120 calendar days of the transaction giving rise
to the claim. For purposes of computing this period, the transaction
giving rise to the claim is the claimant bank’s settlement for the
substitute check in question.
2. When estimating the amount of its loss, section 229.55(b)(2)(ii)
states that the claimant bank should include “interest if applicable.”
The quoted phrase refers to any interest that the claimant bank or
a bank that the claimant bank indemnified paid to a consumer who has
an interest-bearing account in connection with an expedited recredit
under section 229.54.
3. The information that the claimant bank is required
to provide under section 229.55(b)(2)(iv) to facilitate investigation
of the claim could include, for example, a copy of any written claim
that a consumer submitted under section 229.54 or any written record
the bank may have of a claim the consumer submitted orally. The information
also could include a copy of the defective substitute check or information
relating to that check, such as the number, amount, and payee of the
check. However, a claimant bank that provides a copy of the substitute
check must take reasonable steps to ensure that the copy is not mistaken
for a legal equivalent of the original check or handled for forward
collection or return.
4. The indemnifying bank’s right to require a claimant
bank to submit a claim in writing and the computation of time from
the date of the written submission parallel the corresponding provision
in the consumer recredit section (section 229.54(b)(3)). However,
the indemnifying bank also may require the claimant bank to submit a
copy of the written or electronic claim submitted by the consumer
under that section, if any.
9-578.6
1. An indemnifying bank that responds to an interbank expedited-recredit
claim by providing the original check or a sufficient copy of the
original check need not demonstrate why that claim or the underlying
consumer expedited-recredit claim is or is not valid.
