§501 Liability of Federal Reserve or Member Bank for Certifying Check When Amount of Deposit Was Inadequate

Summary

No officer, director, agent, or employee of a Federal Reserve bank or a member bank may certify a check unless the person or company writing the check actually has at least that amount on deposit with the bank at the moment it is certified. A check properly certified by an authorized bank official is a valid obligation of the bank. If a bank official certifies a check without enough funds, the Board of Governors of the Federal Reserve System may impose penalties under subsection (h) of section 248. If the bank is a national bank, the Comptroller of the Currency may use the liability and procedures in section 192. For other member banks, the Board may apply penalties under subchapter VIII of chapter 3.