§5002 Definitions

Summary

Defines the main words used in this chapter about checks and how banks handle them. Account — a bank deposit account. Bank — a person or firm doing banking in a State, and this includes depository institutions, Federal Reserve banks, Federal Home Loan banks, and, when they pay money, the U.S. Treasury, the U.S. Postal Service, a State government, or a local government unit. Collecting bank — any bank that handles a check for collection other than the paying bank. Depositary bank — the first bank a check is sent to for deposit or transfer. Paying bank — the bank that must pay the check or the bank where the check is sent for payment. Returning bank — a bank (not the paying or depositary bank) that handles a returned check or a notice in place of a return; this does not change how returning banks are treated under section 4–202(b) of the Uniform Commercial Code. Board — the Board of Governors of the Federal Reserve System. Business day — has the same meaning as in section 4001(3) of this title. Check — a demand draft drawn on or payable through a bank, including substitute checks and travelers checks, but not noncash items or checks payable in foreign currency. Consumer — an individual who writes a check on a consumer account for forward collection or who deposits or cashes a check into or against a consumer account for return. Consumer account — has the same meaning as in section 4001(10) of this title. Customer — a person with an account at a bank. Forward collection — a bank’s transfer of a check to a collecting or paying bank for settlement or payment. Indemnifying bank — a bank that gives an indemnity under section 5005 for a substitute check. MICR line — the magnetic numbers printed at the bottom of a check (routing number, account number, check number, amount, and similar data) as set by industry standards. Noncash item — has the same meaning as in section 4001(14). Person — an individual, corporation, partnership, trust, government unit, or other organization. Reconverting bank — the bank that makes a substitute check or, if someone else makes it, the first bank that transfers or presents it. Substitute check — a paper copy of the original check that shows front and back images, has a MICR line with the same info (subject to industry standards), meets industry size and paper standards, and can be processed like the original. State — has the same meaning as in section 1813(a) of this title. Truncate — to take the original paper check out of the collection or return process and send a substitute check or related electronic information instead, with or without later sending the original. Uniform Commercial Code — the Uniform Commercial Code as it applies in a State. Terms not defined here — use the meanings given in the Uniform Commercial Code unless the chapter requires otherwise.