Indeed, such fraudulent customers pose risks to the bank beyond any Reg CC claim. We were charged back on the mobile Our customer mobile deposited a check with their signature endorsement along with a restrictive endorsement of "mobile deposit only [FI name] [date]". Thus, a bank should review remote deposit capture (including non-mobile remote deposit capture) agreements with businesses and consider adding a requirement to include a restrictive endorsement to protect the bank and limit its potential liability. Contact ABA, © Copyright 2015-2020, American Bankers Association. “Went to quickly deposit a check via mobile app. The customer then scratched/crossed out the restrictive endorsement and negotiated the item a second time. Visit our Privacy Policy to know more. A recent glitch in Wells Fargo Bank’s mobile deposit offering illustrates how some restrictive endorsements for check deposits can be too restrictive. We were charged back on the mobile deposit. With customers increasingly turning to mobile deposits as a primary means of depositing paper checks, they expect their financial provider to deliver an experience that is fast, error-free, and easy to use. Am I correct or does this provision only apply to mobile deposits? App … When Can My Bank Cease Compliance with the Remittance Transfer Rule? The customer then scratched/crossed out the restrictive endorsement and negotiated the item a second time. You are correct. This document serves to provide information about Mobile Deposit's Restrictive Endorsement functionality, which has been a part of Mobile Deposit since version 4.1, released in 2013. BankersOnline.com - For bankers. We use cookies to improve your experience. A. Looking for effective, convenient training on a particular subject. deposit. Answers do not provide, nor are they intended to substitute for, professional legal advice. By continuing to visit this site you accept our use of cookies. This type of endorsement includes your signature and the words, "for deposit only." Advertisers and sponsors are not responsible for site content. COVID-19 Fraud: How BSA and Fraud Professionals Can Increase Productivity, Collateralization and Covenant Management: Best Practices for Lenders in Volatile Times, Five Reasons Banks Are Now Using Digital SBA Lending Programs, Podcast: Believing in What Banking Can Do, Podcast: ‘Folks Who Are Low-Wealth Also Need Wealth Advisers’, Bonus Podcast: Key Banking-Related Cases Before the Supreme Court. Answers were current as of the response date shown at the end of each item. Tuesday, Oct 2, 2018. American Bankers Association From bankers. The vendor responded that Reg CC only applies to mobile remote deposit capture; it does not apply to commercial remote deposit capture. Effective July 1, 2018, the Federal Reserve Board made amendments to Regulation CC providing clarification on the requirements of mobile deposit endorsements and who has liability in the event of a duplicated check deposit. From training, policies, forms, and publications, to office products and occasional gifts, it’s available here: BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between. My understanding is that this provision applies to any type of remote deposit capture (including non-mobile) and that Reg CC applies not only to consumer accounts, but also to business deposit accounts. BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. It apparently chose your bank. Support our advertisers and sponsors by clicking through to learn more about their products and services. Section 229.34(f), as amended, spells out the new indemnity provisions for duplicate deposits … It would be unusual and risky for business customers, who are subject to stricter due diligence, to be deliberately depositing checks electronically and then cashing those checks elsewhere. Share. However, it is not required. Thus, a bank should review remote deposit capture (including non-mobile remote deposit capture) agreements with businesses and consider adding a requirement to include a restrictive endorsement to protect the bank and limit its potential liability. Learn about our FREE and Premium Newsletters and Briefings. The … 2020 Operations Compliance Triage Conference, 2020 Lending Compliance Triage Conference, Community Banks Define Success Through Design, Management information system can improve client retention, Specially Designated Nationals List (SDN). Market Guide for Identity Proofing and Affirmation 2020. It is also worth noting that the restrictive endorsement protects the bank in the event its customer deposited the check using remote deposit capture and then cashed the check elsewhere. The Twitter-verse was set abuzz on Friday by disgruntled Wells Fargo customers after a glitch in the bank’s mobile deposit app left many with checks they couldn’t deposit and bills they couldn’t pay. Thus, it will not make a huge amount of difference for business accounts—as they are unlikely to be the ones to deposit checks and then cash them elsewhere. Financial institutions are free to reach their own private agreements about how to handle losses, and the second bank in duplicate deposit situations is not required to file a claim over the lack of a restrictive endorsement. It is still up to the bank whether it wants to require an endorsement or not. The practice of depositing a check using remote deposit capture and then cashing it elsewhere (e.g., at a check casher) is typically associated with consumer accounts. Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, senior compliance analyst, ABA Center for Regulatory Compliance. 1-800-BANKERS (800-226-5377) | www.aba.com (Response provided Dec. 2018). 1120 Connecticut Ave NW With customers increasingly turning to mobile deposits as a primary means of depositing paper checks, they expect their financial provider to deliver an experience that is fast, error-free, and easy to use. I understand we did not process the paper check, however the restrictive endorsement was on the mobile deposit and later scratched out. Our customer mobile deposited a check with their signature endorsement along with a restrictive endorsement of "mobile deposit only [FI name] [date]". All Rights Reserved, Financial Inclusion in 2020: A Podcast Series, IRS to Issue Regulations Confirming S-Corporation State Tax Deductions, Regulators Exploring Asset Threshold Relief for Banks Participating in COVID-19 Programs, Podcast: ‘Banking Is Not a Commodity. Restrictive endorsement. It’s a Necessity’, ABA, Industry Groups Launch Awareness Campaign for Struggling Mortgage Borrowers, FHFA Validates Classic FICO for Fannie Mae, Freddie Mac, Fed to Hold Most Payments Services Fees Steady for 2021, Small Business Optimism Remains Unchanged in October, A Practical Approach to PEP Risk Management, FSB Flags Third-Party Risk in New Consultation Paper, OCC: Pandemic, Low Rates Shape Risk Environment for Banks.

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