§4008 Regulations and reports by Board

Summary

The Federal Reserve Board, working with the Director of the Consumer Financial Protection Bureau, must write rules after public notice and a chance to comment. The rules must carry out the law, stop people from avoiding it, and help banks follow it. The Board should consider rules to modernize how checks are handled. That includes charging banks based on notice a check will be presented, allowing truncation and electronic processing, speeding and automating returns, standardizing endorsements so machines can read them and removing needless endorsements, having the originating bank decide within one business day on checks over a minimum amount the Board sets and tell the receiving bank if it will not pay, making returned checks routable through the Federal Reserve, supporting an electronic clearinghouse if feasible, and letting originating banks return unpaid checks directly and get reimbursed. The Board can regulate any part of the check payment system and must consult the Comptroller of the Currency, the FDIC board, and the NCUA board when making these rules. The Board must report to both Houses of Congress at 18, 30, and 48 months after August 10, 1987, about what it has done and the law’s impact on consumers and banks. It must also report within 2 years after August 10, 1987 on the temporary schedule’s effects and on likely effects of the full schedule, including estimates of risks and losses to banks and benefits to consumers, and any recommendations. The Comptroller General must report to Congress within 6 months after September 1, 1988 about how the law was carried out. The Board must study an electronic clearinghouse, consult telecom experts, look at practical and legal obstacles, and send its conclusions to Congress within 9 months of August 10, 1987.