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Check 21-Enabled Services Frequently Asked Questions

Federal Reserve Financial Services is committed to providing the answers and information you need. Answers to many of our customers' most frequently asked questions can be found using the links below.

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Check 21 Frequently Asked Questions

The following Frequently Asked Questions (FAQs) relate to our FedForward®, FedReturn®, and FedReceipt® services.

  1. What if my financial institution deposits duplicate substitute checks or duplicate items in an Image Cash Letter (ICL) or Returns Image Cash Letter (ICLR)?

    Financial institutions should contact Customer Support at P: (877) 372-2457 with the following information:

    • Date(s)
    • Amount
    • Total number of items involved
    • Detail listing of items involved
    • Reference number

    Financial institutions should not submit an adjustment request for debit entry. The Federal Reserve Banks will handle any adjustment requests submitted by the paying banks involved (for example PAID). Please refer to the Quick Reference Guide (QRG) for specific requirements for these adjustment types.

  2. What if my financial institution receives for presentment a duplicate item/Substitute Check in a FedReceipt or FedReceipt Plus file?

    Financial institutions may submit a PAID adjustment request. When using this adjustment type an immediate provisional entry will be passed if the request is submitted in a timely manner. Alternatively, institutions may submit a Check 21 Warranty/Indemnity Claim (WIC) or an Expedited Recredit (EXRC) request, if the associated requirements are met. However, provisional entries are not provided on WIC and EXRC requests. Please refer to the Quick Reference Guide (QRG) for specific requirements for these adjustment types.

  3. What if an item is charged to my financial institution as a Non-Conforming Image (NCI)?

    Items may be rejected by the Federal Reserve Banks if (1) they fail our image quality standards, (2) are qualified to invalid routing numbers or routing numbers not in the Check 21 sort table, or (3) are ineligible for image clearing (for example foreign items). Financial institutions should take the appropriate action to correct the reported issue and re-introduce the item into the collection stream for processing. For example, if an item was rejected because it did not meet our image quality standards, institutions should re-image the item and re-submit the item in another image cash/return letter (ICL) or deposit the original check in a paper forward/return cash letter.

  4. What if my financial institution receives an illegible substitute check?

    If an item fails to meet legal equivalence requirements, financial institutions may request an adjustment credit for a non-cash item (NCH). Institutions using this adjustment type will receive immediate provisional entry if the timeframes are met. Alternatively, customers may submit a request for information for an Original or Sufficient Copy Request (OSCR) to request the original item or a sufficient copy of an original item.

  5. Why can't I see the usual indorsements on the rear image of checks in the FedReceipt file?

    When processed as paper, financial institution's indorsements appear as printed ink characters on the back of a check. In an electronic check processing environment, the paper is converted to an image and processed electronically. Indorsements are represented electronically in Addenda records as opposed to being physically printed on the back of the check.

    The process of converting a paper check to an electronic item creates a collection of data records for each item that includes:

    • The MICR line data of the check
    • Front image
    • Rear image
    • Electronic Indorsements

    When the bank of first deposit (BOFD) converts a paper check to an electronic item, it should include an electronic BOFD indorsement. Depending on how the item is processed and image captured, the BOFD's physical indorsement may not be visible on the rear image of the check. If the BOFD indorsement is not on the rear image of the check and BOFD Indorsement record is required.

    Each subsequent financial institution that processes an electronic item adds its indorsement electronically to the data records for that item. These electronic indorsements are not visible on the rear image of the item in a FedReceipt file.

    Should you need to return such an item and cannot identify the BOFD, you may do so as an Unqualified Mixed Return. If you are a FedReturn institution, you can qualify the item to the Federal Reserve Bank.

  6. How can I see the electronic indorsements in a Check 21 FedReceipt file?

    Your software vendor should have a means for your staff to view electronic indorsements by looking at records other than the image record in the FedReceipt file. Each electronic indorsement is represented as a record in the FedReceipt file.

  7. Are electronic indorsements visible on substitute checks?

    Yes. Any software that prints substitute checks is required to print the electronic indorsements. A substitute check includes the front and rear images of the check which is a picture of the check when it was converted to an electronic item. Any financial institution that processed the imaged item added an electronic indorsement. When the imaged item is reconverted into a substitute check, these electronic indorsements are printed on the back of the Substitute Check.

    When reviewing a sample substitute check (PDF), the standard ink indorsements are printed from left to right or horizontally on the substitute check. The electronic indorsements are overlaid on the substitute check and appear vertically or from top to bottom. Note that this substitute check has the BOFD's indorsement on the item twice; once from the image of the physical ink indorsement on the paper item and again as an overlay printing of the electronic indorsement. Other electronic, subsequent processor indorsements appear at the right end of the substitute check.

  8. Do electronic indorsements meet legal requirements?

    Yes. Whether printed on a substitute check, or as an electronic record in a FedReceipt file, an electronic indorsement has the same legal effect as a printed indorsement on a paper check. The legal basis of electronic indorsements is founded in Regulations J and CC (Off-site) as well as the Federal Reserve's Operating Circular 3 and legal agreements between the Federal Reserve Banks and financial institutions subscribing to services such as FedForward, FedReturn and FedReceipt. Note that electronic bank of first deposit (BOFD) indorsements printed on a substitute check are not required to have the BOFD's name printed on the indorsement, as required for paper checks.

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