March 14, 2005 News Archive

Request For Comment on Proposal to Set Forth Rules Governing Remotely Created Checks (Regulation CC)
The Federal Reserve Board recently requested public comment on a proposal to amend its Regulation CC to set forth rules governing remotely created checks. In place of a signature, a remotely created check generally bears a statement that the customer authorized the check or bears the customer's printed or typed name.

Under the proposed amendments to Regulation CC, a depositary bank would have the ability to warrant that a remotely created check that it is transferring or presenting to the paying bank is authorized by the accountholder. The proposed warranties would apply only to banks and would ultimately shift liability for losses attributable to an unauthorized remotely created check from the paying bank to the depositary bank. The Federal Reserve said it was offering the plan to reduce the potential for fraud in remotely created checks. The Fed noted that telechecks may be useful payment devices. For example, a customer could authorize a credit card company to create a check remotely by telephone to pay his or her credit card bill in a timely manner and avoid late charges.

Comments are due within 60 days of publication in the Federal Register.
(PDF, 196KB)