12 C.F.R. § 229.36

Presentment and issuance of checks

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(a) Receipt of electronic checks. The terms under which a paying bank will accept presentment of an electronic check is governed by the paying bank's agreement with the presenting bank.

(b) Receipt of paper checks. (1) A paper check is considered received by the paying bank when it is received—

(i) At a location to which delivery is requested by the paying bank;

(ii) At an address of the bank associated with the routing number on the check, whether contained in the MICR line or in fractional form;

(iii) At a branch, head office, or other location consistent with the name and address of the bank on the check if the bank is identified on the check by name and address; or

(iv) At any branch or head office, if the bank is identified on the check by name without address.

(2) A bank may require that checks presented to it as a paying bank be separated from returned checks.

(c) Liability of bank during forward collection. Settlements between banks for the forward collection of a check are final when made; however, a collecting bank handling a check for forward collection may be liable to a prior collecting bank, including the depositary bank, and the depositary bank's customer.

(d) Same-day settlement. (1) A paper check is considered presented, and a paying bank must settle for or return the check pursuant to paragraph (d)(2) of this section, if a presenting bank delivers the check in accordance with reasonable delivery requirements established by the paying bank and demands payment under this paragraph (d)—

(i) At a location designated by the paying bank for receipt of paper checks under this paragraph (d) at which the paying bank would be considered to have received the paper check under paragraph (b) of this section or, if no location is designated, at any location described in paragraph (b) of this section; and

(ii) By 8 a.m. on a business day (local time of the location described in paragraph (d)(1)(i) of this section).

(2) A paying bank may require that paper checks presented for settlement pursuant to paragraph (d)(1) of this section be separated from other forward-collection checks or returned checks.

(3) If presentment of a paper check meets the requirements of paragraph (d)(1) of this section, the paying bank is accountable to the presenting bank for the amount of the check unless, by the close of Fedwire on the business day it receives the check, it either—

(i) Settles with the presenting bank for the amount of the check by credit to an account at a Federal Reserve Bank designated by the presenting bank; or

(ii) Returns the check.

(4) Notwithstanding paragraph (d)(3) of this section, if a paying bank closes on a business day and receives presentment of a paper check on that day in accordance with paragraph (d)(1) of this section—

(i) The paying bank is accountable to the presenting bank for the amount of the check unless, by the close of Fedwire on its next banking day, it either—

(A) Settles with the presenting bank for the amount of the check by credit to an account at a Federal Reserve Bank designated by the presenting bank; or

(B) Returns the check.

(ii) If the closing is voluntary, unless the paying bank settles for or returns the check in accordance with paragraph (d)(3) of this section, it shall pay interest compensation to the presenting bank for each day after the business day on which the check was presented until the paying bank settles for the check, including the day of settlement.

[82 FR 27583, June 15, 2017]

Notes of Decisions

Cited in 9 cases, 1994–2010 · leading case: Messing v. Bank of Am., N.A., 821 A.2d 22 (Md. 2003).

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Messing v. Bank of Am., N.A., 821 A.2d 22 (Md. 2003). · cites it 2× “[7] See also Federal Reserve Board Regulation CC, 12 C.F.R. 229.36(b). [8] Petitioner is incorrect.”

Farm Credit Servs. of Am. v. Am. State Bank, 339 F.3d 764 (8th Cir. 2003). · cites it 2× “CC ( 12 C.F.R. § 229.36 (a)), a draft payable through a bank is considered to be drawn on that bank for purposes of expeditious return and notice of nonpayment of large-dollar items ($2,500 or more).”

Wells Fargo Bank, N.A. v. Citizens Bank of Texas, N.A., 181 S.W.3d 790 (Tex. App. 2005). “” 12 C.F.R. § 229.36 (d) (2005). However, the Federal Reserve’s interpretive commentary explains that section 4.”

Los Angeles Nat'l Bank v. Bank of Canton, 95 Cal. Daily Op. Serv. 535 (Cal. Ct. App. 1995). “” Gunderson’s opinion was that Circular 1 did not apply to the situation at hand, but that section 4104, subdivision (h) and the federal regulations issued by the Federal Reserve Board ( 12 C.F.R. § 229.36 (1994)), as well as industry-wide business practices dictated that actual…”

Aetna Cas. & Sur. Co. v. Fennessey, 642 N.E.2d 1050 (Mass. App. Ct. 1994). “10 See also Banks and Banking, 12 C.F.R. § 229.36 (e) (1994) (Regulation CC) (effective February 1, 1991), which provides, in pertinent part, that in order for a bank to arrange for checks to be paid by it through another bank, “[t]he words ‘payable through’ followed by the name…”

Heartland State Bank v. Am. Bank & Trust, 2010 S.D. 83 (S.D. 2010). · cites it 2× “12 C.F.R. 229.36(b) (emphasis added). According to the Federal Reserve, “[t]he paying bank is considered to receive a cash item when it is delivered as requested, or when it is made available for pickup as arranged, whether or not the paying bank picks up the item at that time.”

Farm Credit Servs. of Am. v. Am. State Bank, 212 F. Supp. 2d 1034 (N.D. Iowa 2002). “CC ( 12 C.F.R. § 229.36 (a)), a draft payable through a bank is considered to be drawn on that bank for purposes of expeditious return and no-’ tice of nonpayment of large-dollar items ($2,500 or more).”

Farm Credit Servs. v. Am. State Bank (8th Cir. 2003). · cites it 2× “CC ( 12 C.F.R. § 229.36 (a)), a draft payable through a bank is considered to be drawn on that bank for purposes of expeditious return and notice of nonpayment of large-dollar items ($2,500 or more).”

Bank of Am., N.A., F/K/A Nationsbank, N.A. v. First Nat'l Bank & Bancinsure, Inc. (Tex. App. 2007). “12 C.F.R. § 229.36 (f) (2004) (establishing deadlines for settlement of checks presented to a paying bank).”

— 12 C.F.R. § 229.36(b) — 2 cases

Messing v. Bank of Am., N.A., 821 A.2d 22 (Md. 2003). “[7] See also Federal Reserve Board Regulation CC, 12 C.F.R. 229.36(b). [8] Petitioner is incorrect.”

Heartland State Bank v. Am. Bank & Trust, 2010 S.D. 83 (S.D. 2010). “12 C.F.R. 229.36(b) (emphasis added). According to the Federal Reserve, “[t]he paying bank is considered to receive a cash item when it is delivered as requested, or when it is made available for pickup as arranged, whether or not the paying bank picks up the item at that time.”

— 12 C.F.R. § 229.36(b)(1) — 1 case

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