The Federal Reserve Banks’ Return Check Clearing Service provides financial institutions with a paper return item deposit option to return unpaid checks to the bank of first deposit (BOFD) or to a correspondent bank or processor designated by the BOFD. The Federal Reserve Banks can help you expedite your check returns by handling your return items, regardless of who processed the items during forward collection.
Preparing dishonored check items by qualifying them for automated processing can decrease your return item costs.
Dishonored check items that have not been prepared for automated processing will be qualified by the Federal Reserve Banks. This is a useful service if your institution does not have encoding equipment, your return items have attachments or the BOFD cannot be identified.
For all returned checks for $2,500 or more, current law requires you to notify the bank of first deposit by 4 p.m. local time on the second banking day after the check is presented. To help your institution meet this requirement, the Federal Reserve offers this service.