Fed Approves ABA-Supported Changes to Reg CC

As part of its ongoing effort to update Regulation CC to reflect a payments system that is largely electronic, the Federal Reserve today approved changes to Reg CC’s liability provisions to address situations involving a dispute about whether portions of an electronic check have been altered or whether the item is a forgery. The changes — which the American Banekrs Association supported — take effect Jan. 1, 2019.

The Fed acknowledged that in today’s check collection environment, original checks may not be available for inspection when disputes between banks arise. In cases where the original paper check is not available, the amendments stipulate that for purposes of determining the burden of proof, it will be assumed that the item has been altered rather than forged. The presumption applies only in disputes between banks when one bank has transferred an electronic or substitute check to the other bank.

In a joint comment letter with five financial trade groups, ABA noted previously that the groups “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.”


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