(a) Any credit issued by a Federal Reserve Bank to a financial institution shall be a provisional credit until Treasury completes first examination of the check, or as provided in paragraph (d) of this section.
(b) Treasury shall have the right as a drawee to complete first examination of checks presented for payment, to reconcile checks, and, when appropriate, to make a declination on any check.
(c) Treasury will decline payment on a check when first examination by Treasury establishes that:
(1) The check has a material defect or alteration;
(2) The check bears a forged or unauthorized drawer's signature;
(3) Treasury has already received presentment of a substitute check, electronic check, or original check relating to the check being presented, such that Treasury is being requested to make payment on a check it has already paid; or Treasury is being requested to make payment on a check that is not valid due to a stop payment or other cancellation.
(4) In the case of an electronic check, Treasury cannot determine whether the check contains a material defect or alteration without examining the original check or a better quality image of the check and Treasury is on notice of a question of law or fact about whether the check is properly payable; or
(5) In the case of a substitute check, Treasury has a warranty or indemnity claim arising under 12 CFR 229.52 or 229.53.
(d) Treasury shall have a reasonable amount of time to complete first examination. However, except as provided in paragraph (e) of this section, if Treasury has not declined payment on a check within 60 days after the check is presented to a Federal Reserve Processing Center for payment, Treasury will be deemed to have made final payment on the check.
(e) Notwithstanding the provisions of paragraph (d) of this section, in accordance with 31 U.S.C. 3328(a)(2), if, upon presentment for payment, Treasury is on notice of a question of law or fact about whether a check is properly payable, Treasury may defer final payment until the question is settled.
(f) If a Federal Reserve Bank debits a financial institution's reserve account as a result of an erroneous declination, Treasury will promptly refund the amount of the payment.
[69 FR 61568, Oct. 19, 2004, as amended at 88 FR 74889, Nov. 1, 2023]
Notes of Decisions
Casa De Cambio Comdiv S.A., De C v. V. United States, 291 F.3d 1356 (Fed. Cir. 2002).
· cites it 2× “3 (d), but would only be authorized to seek reclamation of the funds already paid and would have to follow the reclamation procedures under 31 C.F.R. §§ 240.6 , 240.7. The reclamation procedures 31 C.”
ABN Amro Bank N.V. v. United States, 34 Fed. Cl. 126 (Fed. Cl. 1995).
· cites it 5× “Inter alia, plaintiff contends that (1) Treasury’s reversal of the credit previously granted on the check constitutes an illegal exaction of funds by Treasury in violation of Treasury regulations covering reclamation of funds mistakenly paid on Treasury checks, 31 C.F.R. § 240.6…”
United States v. Jeffrey Page, 116 F.4th 822 (9th Cir. 2024).
“§ 3328 (f); see also 31 C.F.R. § 240.6 (b). In other words, the Treasury has no obligation to pay the taxpayer until after the check is presented to the Federal Reserve Bank and the Secretary authorizes payment.”
Alnor Check Cashing v. Katz, 821 F. Supp. 307 (E.D. Pa. 1993).
· cites it 4× “31 C.F.R. § 240.6 . Section 240.6 provides: Reclamation of amounts of paid checks, (a) If, after a check has been paid by Treasury, it is found to: (1) Bear a forged or unauthorized indorsement; or (2) Contain any other material defect or alteration which was not discovered upon…”
United States v. Llwellyn Greene-Thapedi, 398 F.3d 635 (7th Cir. 2005).
“”); 31 C.F.R. § 240.6 (b) (“Treasury shall have the right as a drawee to complete first examination of checks presented for payment, to reconcile checks, and, when appropriate, to make a declination on any check.”
United States v. Jeffrey Page (9th Cir. 2024).
“§ 3328 (f); see also 31 C.F.R. § 240.6 (b). In other words, the Treasury has no obligation to pay the taxpayer until after the check is presented to the Federal Reserve Bank and the Secretary authorizes payment.”
United States v. Jeffrey Page (9th Cir. 2024).
“§ 3328 (f); see also 31 C.F.R. § 240.6 (b). In other words, the Treasury has no obligation to pay the taxpayer until after the check is presented to the Federal Reserve Bank and the Secretary authorizes payment.”
United States v. Greene-Thapedi (7th Cir. 2005).
“”); 31 C.F.R. § 240.6 (b) (“Treasury shall have the right as a drawee to complete first examination of checks presented for payment, to reconcile checks, and, when appropriate, to make a declination on any check.”
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