regulation cc check endorsement standards

A reconverting bank satisfies its obligation to preserve all previously applied indorsements by overlaying a bank's indorsement that previously was applied electronically onto a substitute check that the reconverting bank creates. If the bank truncates that item, it should ensure that it also applies an indorsement to the item electronically. A bank might use check-processing equipment that captures an image of a check prior to spraying an indorsement onto that item. If a subsequent substitute check is created in the course of collection or return, that substitute check will contain, in its image of the back of the previous substitute check, reproductions of indorsements that were sprayed or overlaid onto the previous item.Ĥ. Banks generally apply indorsements to a paper check in one of two ways: (1) In accordance with ANS X9.100-111, banks print or “spray” indorsements onto a paper check when the check is processed through the banks' automated check sorters (regardless of whether the checks are original checks or substitute checks), and (2) in accordance with ANS X9.100-140, reconverting banks print or “overlay” previously applied electronic indorsements and their own indorsements and identifications onto a substitute check at the time that the substitute check is created. For example, although ANS X9.100-187 is an industry standard for banks' exchange of electronic checks, the parties may agree to send and receive electronic checks that conform to a different standard.ģ. The parties sending and receiving a check may agree that different indorsement standards will apply to such checks. The Board, however, may by rule or order determine that different standards apply.Ģ. Electronic checks must be indorsed in accordance ANS X9.100-187. Substitute checks must be indorsed in accordance with ANS X9.100-140. Paper checks must be indorsed in accordance with ANS X9.100-111. The indorsement standard a bank must use depends on the type of check being indorsed.

It is designed to facilitate the identification of the depositary bank and the prompt return of checks.

This section requires banks to use a standard form of indorsement when indorsing checks during the forward collection and return process.

Regulation cc check endorsement standards