I understand we did not process the paper check, however the restrictive endorsement was on the mobile deposit and later scratched out. Support our advertisers and sponsors by clicking through to learn more about their products and services. Do we have any recourse back to the second bank to recover funds? Our customer mobile deposited a check with their signature endorsement along with a restrictive endorsement of "mobile deposit only [FI name] [date]". 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. 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. I understand we did not process the paper check, however the restrictive endorsement was on the mobile deposit … Looking for effective, convenient training on a particular subject. A. Market Guide for Identity Proofing and Affirmation 2020. The customer then scratched/crossed out the restrictive endorsement and negotiated the item a second time. Importantly, the regulation does not specify that the first bank in a duplicate deposit situation HAS to be held liable if it failed to require a restrictive endorsement. 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. 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. 1120 Connecticut Ave NW Indeed, such fraudulent customers pose risks to the bank beyond any Reg CC claim. The vendor responded that Reg CC only applies to mobile remote deposit capture; it does not apply to commercial remote deposit capture. If the check was presented to the paying bank via the Fed, FRBServices check adjustment rules would permit the paying bank to submit either presentment of the check as a PAID adjustment. Am I correct or does this provision only apply to mobile deposits? 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. 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. To support the needs of financial institutions world, Mitek has kept apprised of changes to financial regulations and we continue to enhance the Mobile Deposit application to ensure our customers are able to keep pace. We were charged back on the mobile 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. The customer then scratched/crossed out the restrictive endorsement and negotiated the item a second time. Our customer mobile deposited a check with their signature endorsement along with a restrictive endorsement of "mobile deposit only [FI name] [date]". 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. 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. Answers were current as of the response date shown at the end of each item. Visit our Privacy Policy to know more. Tuesday, Oct 2, 2018. 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. A check endorsed this way can be deposited into a … 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. (Response provided Dec. 2018). 1-800-BANKERS (800-226-5377) | www.aba.com By continuing to visit this site you accept our use of cookies. This leaves financial institutions with a decision to make on whether or not to change the endorsement requirements for any mobile check deposits. American Bankers Association From bankers. BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. App … It apparently chose your bank. We use cookies to improve your experience. Advertisers and sponsors are not responsible for site content. Mobile Deposit Restrictive Endorsement. Restrictive endorsement. At the same time, 6,100 financial institutions have to come to rely on Mitek to provide a Mobile Depsoit solution that utilizes up-to-date technology, helps to prevent fraudulent deposits… Section 229.34(f), as amended, spells out the new indemnity provisions for duplicate deposits … It is still up to the bank whether it wants to require an endorsement or not. My bank contacted a vendor inquiring about the endorsement capabilities of scanners to ensure that its commercial customers apply the restrictive endorsement when using remote deposit capture. 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. Contact ABA, © Copyright 2015-2020, American Bankers Association. At the same time, 6,100 financial institutions have to come to rely on Mitek to provide a Mobile Depsoit solution that utilizes up-to-date technology, helps to prevent fraudulent deposits, and provides near-real-time processing capabilities. However, it is not required. We were charged back on the mobile deposit. 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. Washington, DC 20036 deposit. 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). 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. Please tell us a little bit about yourself. When Can My Bank Cease Compliance with the Remittance Transfer Rule? This type of endorsement includes your signature and the words, "for deposit only." 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. You are correct. Learn about our FREE and Premium Newsletters and Briefings. A recent glitch in Wells Fargo Bank’s mobile deposit offering illustrates how some restrictive endorsements for check deposits can be too restrictive. You're stuck holding the bag unless you can collect from your depositor. “Went to quickly deposit a check via mobile app. 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.

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