BACKGROUND
Bankers need to have a thorough understanding of Uniform Commercial Codes (UCC) 3 and 4, as well as Regulation CC, in order to operate effectively within the banking industry.
- A lack of understanding of UCC 3 could lead to errors in processing transactions, which can result in significant financial losses for banks and their customers.
- Bankers need to be familiar with UCC 4 to ensure that they are compliant with all regulations related to deposit and collection of funds.
- Finally, understanding and complying with Regulation CC is crucial for banks to maintain customer satisfaction and avoid regulatory penalties.
Overall, knowledge of UCC 3 and 4, as well as Regulation CC, is essential for bankers to operate in a safe and effective manner and to maintain the trust of their customers.
Join Wespay, the Regional Payments go-to authority on checks, negotiable items in general and so much more, for this critical 2-part series that will give you and your team everything they need to know for staying compliant with each of these regulations.
In Part One - Uniform Commercial Code of this two-part series, we will review of the check payment system’s regulatory foundation, focusing on UCC.
- Uniform Commercial Code Overview
- UCC 3 - Overview of Negotiable Instruments
- UCC 4 - Bank Deposits and Collections
- UCC Transfer Warranties
- UCC Presentment Warranties
- Statute of Limitations
- UCC 3
- Negotiable Instruments
- Checks and Demand Instruments
- Elements: Payable To, Date, Amount, Payee
- Indorsements
- Negotiation
- Holder in Due Course
- Official Checks, and Stop Payment Liability
- UCC 4
- Final Payment
- Return Items and 'Midnight Deadline'
- Rights to Stop Payment
- Stale-dated items
- Customer Death and Chargebacks
In Part Two - Regulation CC, we will look at the regulatory foundation with a discussion of Regulation CC, part of the Code of Federal Regulations (CFR).
- Subpart A - General
- Definitions
- Electronic Checks
- Subpart B - Funds Availability
- Availability Schedules
- Exceptions to Availability Schedules
- General Disclosure
- Subpart C - Collection of Checks
- Indorsements
- Depository/Paying Banks
- Non Payment
- Electronic Check Warranties
- Remotely Created Checks
- Restrictive Indorsements
- Electronically Created Items
- Subpart D - Check Substitution
- Defined
- Warranties and Indemnities
- Check 21 Compliance and Liabilities
Scenarios will be used to illustrate key warranties and how breach of warranty situations may be handled.