12 U.S.C. § 5003: General provisions governing…

Summary

You can deposit, present, or send a substitute check for collection or return without getting special permission, as long as a bank has made the required promises about that check. A substitute check counts as the same as the original check if it accurately shows all the front and back information from when the original was truncated and it includes a clear notice that it is a legal copy you can use the same way as the original. The bank that creates the substitute check must include any earlier endorsements and must identify itself as the reconverting bank while keeping prior reconverting bank IDs. If the substitute check is the legal equivalent, it is treated the same as the original under 12 CFR part 229 (Regulation CC), the Uniform Commercial Code, and other federal or state laws, as long as those laws do not conflict with this chapter.

Title 12, §5003

Banks and Banking, Source: USLM XML via OLRC

(a)No agreement required

A person may deposit, present, or send for collection or return a substitute check without an agreement with the recipient, so long as a bank has made the warranties in section 5004 of this title with respect to such substitute check.

(b)Legal equivalence

A substitute check shall be the legal equivalent of the original check for all purposes, including any provision of any Federal or State law, and for all persons if the substitute check—

(1)accurately represents all of the information on the front and back of the original check as of the time the original check was truncated; and

(2)bears the legend: “This is a legal copy of your check. You can use it the same way you would use the original check.”

(c)Endorsements

A bank shall ensure that the substitute check for which the bank is the reconverting bank bears all endorsements applied by parties that previously handled the check (whether in electronic form or in the form of the original paper check or a substitute check) for forward collection or return.

(d)Identification of reconverting bank

A bank shall identify itself as a reconverting bank on any substitute check for which the bank is a reconverting bank so as to preserve any previous reconverting bank identifications in conformance with generally applicable industry standards.

(e)Applicable law

A substitute check that is the legal equivalent of the original check under subsection (b) shall be subject to any provision, including any provision relating to the protection of customers, of part 229 of title 12 of the Code of Federal Regulations, the Uniform Commercial Code, and any other applicable Federal or State law as if such substitute check were the original check, to the extent such provision of law is not inconsistent with this chapter.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (e), was in the original “this Act”, meaning Pub. L. 108–100, Oct. 28, 2003, 117 Stat. 1177, which is classified generally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 5001 of this title and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective at the end of the 12-month period beginning on Oct. 28, 2003, see section 20 of Pub. L. 108–100, set out as a note under section 5001 of this title.

§5003 General Provisions Governing Substitute Checks