Browse Arkansas Code titles and sections
12 U.S.C. § 5006 — Expedited recredit for consumers
Federal law — U.S. Code and appendices · legal_authorities
**(a) Recredit claims**
(1) **In general** — A consumer may make a claim for expedited recredit from the bank that holds the account of the consumer with respect to a substitute check, if the consumer asserts in good faith that—
(A) the bank charged the consumer’s account for a substitute check that was provided to the consumer;
(B) either—
(i) the check was not properly charged to the consumer’s account; or
(ii) the consumer has a warranty claim with respect to such substitute check;
(C) the consumer suffered a resulting loss; and
(D) the production of the original check or a better copy of the original check is necessary to determine the validity of any claim described in subparagraph (B).
(2) **40-day period** — Any claim under paragraph (1) with respect to a consumer account may be submitted by a consumer before the end of the 40-day period beginning on the later of—
(A) the date on which the financial institution mails or delivers, by a means agreed to by the consumer, the periodic statement of account for such account which contains information concerning the transaction giving rise to the claim; or
(B) the date on which the substitute check is made available to the consumer.
(3) **Extension under extenuating circumstances** — If the ability of the consumer to submit the claim within the 40-day period under paragraph (2) is delayed due to extenuating circumstances, including extended travel or the illness of the consumer, the 40-day period shall be extended by a reasonable amount of time.
**(b) Procedures for claims**
(1) **In general** — To make a claim for an expedited recredit under subsection (a) with respect to a substitute check, the consumer shall provide to the bank that holds the account of such consumer—
(A) a descript
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5006
Stored review status: release_metadata_unconfirmed. A text match is a research starting point; applicability is not established.
Original supplied file — preserved unchanged
Download original Markdown file
File SHA-256: 196ff614db75a45c838d092ab8cc58861e4ca5ff2558d455170be033e749981a. The original may include catalog metadata, neighboring provisions, or embedded records outside this collection's scope. Search shows only the selected federal record. Historical editions and unverified snapshots are not a statement of current law.
Authority boundary: historical or unconfirmed source not current law verified.
Open the recorded source website ↗
Record provenance
Stable record: federal_law:legal_authorities:record_usc_9d38e62ec4c7f975147585bb
Source file: Laws/federal/codes/united-states-code/title-12/section-5006-expedited-recredit-for-consumers--77a88c831e.md
Pages: Not recorded – Not recorded
Passage SHA-256: 3931b8f550ba15385422c25117e8125c79ca9c9af2e5256c06c5c9e55853d265
Source location: Title 12, Chapter 50, § 5006; chapter-050-check-truncation.md
Stored source content
**(a) Recredit claims**
(1) **In general** — A consumer may make a claim for expedited recredit from the bank that holds the account of the consumer with respect to a substitute check, if the consumer asserts in good faith that—
(A) the bank charged the consumer’s account for a substitute check that was provided to the consumer;
(B) either—
(i) the check was not properly charged to the consumer’s account; or
(ii) the consumer has a warranty claim with respect to such substitute check;
(C) the consumer suffered a resulting loss; and
(D) the production of the original check or a better copy of the original check is necessary to determine the validity of any claim described in subparagraph (B).
(2) **40-day period** — Any claim under paragraph (1) with respect to a consumer account may be submitted by a consumer before the end of the 40-day period beginning on the later of—
(A) the date on which the financial institution mails or delivers, by a means agreed to by the consumer, the periodic statement of account for such account which contains information concerning the transaction giving rise to the claim; or
(B) the date on which the substitute check is made available to the consumer.
(3) **Extension under extenuating circumstances** — If the ability of the consumer to submit the claim within the 40-day period under paragraph (2) is delayed due to extenuating circumstances, including extended travel or the illness of the consumer, the 40-day period shall be extended by a reasonable amount of time.
**(b) Procedures for claims**
(1) **In general** — To make a claim for an expedited recredit under subsection (a) with respect to a substitute check, the consumer shall provide to the bank that holds the account of such consumer—
(A) a description of the claim, including an explanation of—
(i) why the substitute check was not properly charged to the consumer’s account; or
(ii) the warranty claim with respect to such check;
(B) a statement that the consumer suffered a loss and an estimate of the amount of the loss;
(C) the reason why production of the original check or a better copy of the original check is necessary to determine the validity of the charge to the consumer’s account or the warranty claim; and
(D) sufficient information to identify the substitute check and to investigate the claim.
(2) **Claim in writing**
(A) *In general* — The bank holding the consumer account that is the subject of a claim by the consumer under subsection (a) may, in the discretion of the bank, require the consumer to submit the information required under paragraph (1) in writing.
(B) *Means of submission* — A bank that requires a submission of information under subparagraph (A) may permit the consumer to make the submission electronically, if the consumer has agreed to communicate with the bank in that manner.
**(c) Recredit to consumer**
(1) **Conditions for recredit** — The bank shall recredit a consumer account in accordance with paragraph (2) for the amount of a substitute check that was charged against the consumer account if—
(A) a consumer submits a claim to the bank with respect to that substitute check that meets the requirement of subsection (b); and
(B) the bank has not—
(i) provided to the consumer—
(I) the original check; or
(II) a copy of the original check (including an image or a substitute check) that accurately represents all of the information on the front and back of the original check, as of the time at which the original check was truncated; and
(ii) demonstrated to the consumer that the substitute check was properly charged to the consumer account.
(2) **Timing of recredit**
(A) *In general* — The bank shall recredit the consumer’s account for the amount described in paragraph (1) no later than the end of the business day following the business day on which the bank determines the consumer’s claim is valid.
(B) *Recredit pending investigation* — If the bank has not yet determined that the consumer’s claim is valid before the end of the 10th business day after the business day on which the consumer submitted the claim, the bank shall recredit the consumer’s account for—
(i) the lesser of the amount of the substitute check that was charged against the consumer account, or $2,500, together with interest if the account is an interest-bearing account, no later than the end of such 10th business day; and
(ii) the remaining amount of the substitute check that was charged against the consumer account, if any, together with interest if the account is an interest-bearing account, not later than the 45th calendar day following the business day on which the consumer submits the claim.
**(d) Availability of recredit**
(1) **Next business day availability** — Except as provided in paragraph (2), a bank that provides a recredit to a consumer account under subsection (c) shall make the recredited funds available for withdrawal by the consumer by the start of the next business day after the business day on which the bank recredits the consumer’s account under subsection (c).
(2) **Safeguard exceptions** — A bank may delay availability to a consumer of a recredit provided under subsection (c)(2)(B)(i) until the start of either the business day following the business day on which the bank determines that the consumer’s claim is valid or the 45th calendar day following the business day on which the consumer submits a claim for such recredit in accordance with subsection (b), whichever is earlier, in any of the following circumstances:
(A) *New accounts* — The claim is made during the 30-day period beginning on the business day the consumer account was established.
(B) *Repeated overdrafts* — Without regard to the charge that is the subject of the claim for which the recredit was made—
(i) on 6 or more business days during the 6-month period ending on the date on which the consumer submits the claim, the balance in the consumer account was negative or would have become negative if checks or other charges to the account had been paid; or
(ii) on 2 or more business days during such 6-month period, the balance in the consumer account was negative or would have become negative in the amount of $5,000 or more if checks or other charges to the account had been paid.
(C) *Prevention of fraud losses* — The bank has reasonable cause to believe that the claim is fraudulent, based on facts (other than the fact that the check in question or the consumer is of a particular class) that would cause a well-grounded belief in the mind of a reasonable person that the claim is fraudulent.
(3) **Overdraft fees** — No bank that, in accordance with paragraph (2), delays the availability of a recredit under subsection (c) to any consumer account may impose any overdraft fees with respect to drafts drawn by the consumer on such recredited amount before the end of the 5-day period beginning on the date notice of the delay in the availability of such amount is sent by the bank to the consumer.
**(e) Reversal of recredit** A bank may reverse a recredit to a consumer account if the bank—
(1) determines that a substitute check for which the bank recredited a consumer account under subsection (c) was in fact properly charged to the consumer account; and
(2) notifies the consumer in accordance with subsection (f)(3).
**(f) Notice to consumer**
(1) **Notice if consumer claim not valid** — If a bank determines that a substitute check subject to the consumer’s claim was in fact properly charged to the consumer’s account, the bank shall send to the consumer, no later than the business day following the business day on which the bank makes a determination—
(A) the original check or a copy of the original check (including an image or a substitute check) that—
(i) accurately represents all of the information on the front and back of the original check (as of the time the original check was truncated); or
(ii) is otherwise sufficient to determine whether or not the consumer’s claim is valid; and
(B) an explanation of the basis for the determination by the bank that the substitute check was properly charged, including a statement that the consumer may request copies of any information or documents on which the bank relied in making the determination.
(2) **Notice of recredit** — If a bank recredits a consumer account under subsection (c), the bank shall send to the consumer, no later than the business day following the business day on which the bank makes the recredit, a notice of—
(A) the amount of the recredit; and
(B) the date the recredited funds will be available for withdrawal.
(3) **Notice of reversal of recredit** — In addition to the notice required under paragraph (1), if a bank reverses a recredited amount under subsection (e), the bank shall send to the consumer, no later than the business day following the business day on which the bank reverses the recredit, a notice of—
(A) the amount of the reversal; and
(B) the date the recredit was reversed.
(4) **Mode of delivery** — A notice described in this subsection shall be delivered by United States mail or by any other means through which the consumer has agreed to receive account information.
**(g) Other claims not affected** Providing a recredit in accordance with this section shall not absolve the bank from liability for a claim made under any other law, such as a claim for wrongful dishonor under the Uniform Commercial Code, or from liability for additional damages under section 5005 or 5009 of this title.
**(h) Clarification concerning consumer possession** A consumer who was provided a substitute check may make a claim for an expedited recredit under this section with regard to a transaction involving the substitute check whether or not the consumer is in possession of the substitute check.
**(i) Scope of application** This section shall only apply to customers who are consumers.
Cross-references
Connections may be documented source relationships, shared citations or nearby passages. Each explains its basis; a connection alone does not establish applicability to your situation.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Findings** The Congress finds as follows:
(1) In the Expedited Funds Availability Act [[12 U.S.C. 4001](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section4001&num=0&edition=prelim) et seq.], enacted on August 10, 1987, the Congress directed the Board of Governors of the Federal Reserve System to consider establishing regulations requiring Federal reserve banks and depository institutions to provide for check truncation, in order to improve the check processing system.
(2) In that same Act, the Congress—
(A) provided the Board of Governors of the Federal Reserve System with full authority to regulate all aspects of the payment system, including the receipt, payment, collection, and clearing of checks, and related functions of the payment system pertaining to checks; and
(B) directed that the exercise of such authority by the Board superseded any State law, including the Uniform Commercial Code, as in effect in any State.
(3) Check truncation is no less desirable in 2003 for both financial service customers and the financial services industry, to reduce costs, improve efficiency in check collections, and expedite funds availability for customers than it was over 15 years ago when Congress first directed the Board to consider establishing such a process.
**(b) Purposes** The purposes of this chapter are as follows:
(1) To facilitate check truncation by authorizing substitute checks.
(2) To foster innovation in the check collection system without mandating receipt of checks in electronic form.
(3) To improve the overall efficiency of the Nation’s payments system.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5001
Stored review status: release_metadata_unconfirmed. Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Recredit claims**
(1) **In general** — A bank may make a claim against an indemnifying bank for expedited recredit for which that bank is indemnified if—
(A) the claimant bank (or a bank that the claimant bank has indemnified) has received a claim for expedited recredit from a consumer under [section 5006 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5006&num=0&edition=prelim) with respect to a substitute check or would have been subject to such a claim had the consumer’s account been charged;
(B) the claimant bank has suffered a resulting loss or is obligated to recredit a consumer account under [section 5006 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5006&num=0&edition=prelim) with respect to such substitute check; and
(C) production of the original check, another substitute check, or a better copy of the original check is necessary to determine the validity of the charge to the customer account or any warranty claim connected with such substitute check.
(2) **120-day period** — Any claim under paragraph (1) may be submitted by the claimant bank to an indemnifying bank before the end of the 120-day period beginning on the date of the transaction that gave rise to the claim.
**(b) Procedures for claims**
(1) **In general** — To make a claim under subsection (a) for an expedited recredit relating to a substitute check, the claimant bank shall send to the indemnifying bank—
(A) a description of—
(i) the claim, including an explanation of why the substitute check cannot be properly charged to the consumer account; or
(ii) the warranty claim;
(B) a statement that the claimant bank has suffered a loss or is obligated to recredit the consumer’s acco
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5007
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Actions under this chapter**
(1) **In general** — An action to enforce a claim under this chapter may be brought in any United States district court, or in any other court of competent jurisdiction, before the end of the 1-year period beginning on the date the cause of action accrues.
(2) **Accrual** — A cause of action accrues as of the date the injured party first learns, or by which such person reasonably should have learned, of the facts and circumstances giving rise to the cause of action.
**(b) Discharge of claims** Except as provided in subsection (c), unless a person gives notice of a claim to the indemnifying or warranting bank within 30 days after the person has reason to know of the claim and the identity of the indemnifying or warranting bank, the indemnifying or warranting bank is discharged from liability in an action to enforce a claim under this chapter to the extent of any loss caused by the delay in giving notice of the claim.
**(c) Notice of claim by consumer** A timely claim by a consumer under [section 5006 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5006&num=0&edition=prelim) for expedited recredit constitutes timely notice of a claim by the consumer for purposes of subsection (b).
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5010
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Each bank shall provide, in accordance with subsection (b), a brief notice about substitute checks that describes—
(1) how a substitute check is the legal equivalent of an original check for all purposes, including any provision of any Federal or State law, and for all persons, if the substitute check—
(A) accurately represents all of the information on the front and back of the original check as of the time at which the original check was truncated; and
(B) bears the legend: “This is a legal copy of your check. You can use it in the same way you would use the original check.”; and
(2) the consumer recredit rights established under [section 5006 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5006&num=0&edition=prelim) when a consumer believes in good faith that a substitute check was not properly charged to the account of the consumer.
**(b) Distribution**
(1) **Existing customers** — With respect to consumers who are customers of a bank on the effective date of this chapter and who receive original checks or substitute checks, a bank shall provide the notice described in subsection (a) to each such consumer no later than the first regularly scheduled communication with the consumer after the effective date of this chapter.
(2) **New account holders** — A bank shall provide the notice described in subsection (a) to each consumer who will receive original checks or substitute checks, other than existing customers referred to in paragraph (1), at the time at which the customer relationship is initiated.
(3) **Mode of delivery** — A bank may send the notices required by this subsection by United States mail or by any other means through which the consumer has agreed to receive account information.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5011
Stored review status: release_metadata_unconfirmed. Incoming connection: Explicit cross-reference supplied in source Markdown; currentness and applicability require review.
Federal law — U.S. Code and appendices · legal_authorities
Page 1778
TITLE 12—BANKS AND BANKING
§ 5006
amount of the indemnity under subsection (a)
shall be the sum of—
(A) the amount of any loss, up to the
amount of the substitute check; and
(B) interest and expenses (including costs
and reasonable attorney’s fees and other ex-
penses of representation).
(c) Comparative negligence
(1) In general
If a loss described in subsection (a) results in
whole or in part from the negligence or failure
to act in good faith on the part of an indem-
nified party, then that party’s indemnification
under this section shall be reduced in propor-
tion to the amount of negligence or bad faith
attributable to that party.
(2) Rule of construction
Nothing in this subsection reduces the rights
of a consumer or any other person under the
Uniform Commercial Code or other applicable
provision of Federal or State law.
(d) Effect of producing original check or copy
(1) In general
If the indemnifying bank produces the origi-
nal check or a copy of the original check (in-
cluding an image or a substitute check) that
accurately represents all of the information
on the front and back of the original check (as
of the time the original check was truncated)
or is otherwise sufficient to determine wheth-
er or not a claim is valid, the indemnifying
bank shall—
(A) be liable under this section only for
losses covered by the indemnity that are in-
curred up to the time that the original
check or copy is provided to the indemnified
party; and
(B) have a right to the return of any funds
it has paid under the indemnity in excess of
those losses.
(2) Coordination of indemnity with implied
warranty
The production of the original check, a sub-
stitute check, or a copy under paragraph (1) by
an indemnifying bank shall not absolve the
ba
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 5006
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.