WASHINGTON—CUNA, NAFCU and several other trade groups sent a joint letter Tuesday to the Federal Reserve Board in support of a proposal to add clarifying language to Regulation CC regarding electronic checks.
The Federal Reserve is proposing revisions to Regulation CC, which seeks to create a presumption of alteration for any dispute over whether the dollar amount or the payee on a substitute check or electronic check has been altered or whether the substitute check or electronic check is derived from an original check that is a forgery.
The trade groups in their letter stated they support the addition of a presumption of alteration to Regulation CC and support the adoption of a final rule implementing the proposed rule.
“The Commenters support a presumption of alteration in Regulation CC as preferable to a presumption of forgery,” the groups stated. “We believe that alteration of a legitimate check is the more common type of check fraud today in which disputes arise between banks, and therefore a presumption of alteration in those disputes where the evidence is lacking is appropriate. For these reasons, ECCHO has had a presumption of alteration, as opposed to a presumption of forgery, in its check image exchange rules for over five years. ECCHO has not identified any issues or problems with this approach.
“The presumption rule within Regulation CC also would appropriately reflect that check collection in the U.S. has virtually fully migrated to an electronic check image exchange environment,” continued the trades. “While the electronic check image exchange environment has improved the speed and efficiency of check collection, it has also increased the likelihood of situations in which the original check may not be available for a detailed review of the check stock and ink quality to determine if the item is altered or forged. In such an all-electronic exchange environment, a presumption of alteration of a check is preferable to having no presumption at all for disputes where evidence is lacking, as it avoids a debate of whether the item is altered or forged, and
promotes predictable results.”
For the completer letter, visit CUToday.info’s The Gov.