Browse Arkansas Code titles and sections
12 U.S.C. § 5004 — Substitute check warranties
Federal law — U.S. Code and appendices · legal_authorities
A bank that transfers, presents, or returns a substitute check and receives consideration for the check warrants, as a matter of law, to the transferee, any subsequent collecting or returning bank, the depositary bank, the drawee, the drawer, the payee, the depositor, and any endorser (regardless of whether the warrantee receives the substitute check or another paper or electronic form of the substitute check or original check) that—
(1) the substitute check meets all the requirements for legal equivalence under [section 5003(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5003/b&num=0&edition=prelim); and
(2) no depositary bank, drawee, drawer, or endorser will receive presentment or return of the substitute check, the original check, or a copy or other paper or electronic version of the substitute check or original check such that the bank, drawee, drawer, or endorser will be asked to make a payment based on a check that the bank, drawee, drawer, or endorser has already paid.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5004
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: 7879b8b257e60c14c86c74424abdd9d82ed1728783985d4b916d7f0919837ff3. 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_fbf8532a26ac349566cc34ca
Source file: Laws/federal/codes/united-states-code/title-12/section-5004-substitute-check-warranties--13d9ad54ba.md
Pages: Not recorded – Not recorded
Passage SHA-256: 5fb52ab0b3b452153acdacd3b35913e412dfd9a531a26412bdebe0558bd1ee8b
Source location: Title 12, Chapter 50, § 5004; chapter-050-check-truncation.md
Stored source content
A bank that transfers, presents, or returns a substitute check and receives consideration for the check warrants, as a matter of law, to the transferee, any subsequent collecting or returning bank, the depositary bank, the drawee, the drawer, the payee, the depositor, and any endorser (regardless of whether the warrantee receives the substitute check or another paper or electronic form of the substitute check or original check) that—
(1) the substitute check meets all the requirements for legal equivalence under [section 5003(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5003/b&num=0&edition=prelim); and
(2) no depositary bank, drawee, drawer, or endorser will receive presentment or return of the substitute check, the original check, or a copy or other paper or electronic version of the substitute check or original check such that the bank, drawee, drawer, or endorser will be asked to make a payment based on a check that the bank, drawee, drawer, or endorser has already paid.
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) 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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5004&num=0&edition=prelim) 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 S
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5003
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) Indemnity** A reconverting bank and each bank that subsequently transfers, presents, or returns a substitute check in any electronic or paper form, and receives consideration for such transfer, presentment, or return shall indemnify the transferee, any subsequent collecting or returning bank, the depositary bank, the drawee, the drawer, the payee, the depositor, and any endorser, up to the amount described in subsections (b) and (c), as applicable, to the extent of any loss incurred by any recipient of a substitute check if that loss occurred due to the receipt of a substitute check instead of the original check.
**(b) Indemnity amount**
(1) **Amount in event of breach of warranty** — The amount of the indemnity under subsection (a) shall be the amount of any loss (including costs and reasonable attorney’s fees and other expenses of representation) proximately caused by a breach of a warranty provided under [section 5004 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5004&num=0&edition=prelim).
(2) **Amount in absence of breach of warranty** — In the absence of a breach of a warranty provided under [section 5004 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5004&num=0&edition=prelim), the 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 expenses 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 indemnified party, then that party’s indemnif
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5005
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 1777
TITLE 12—BANKS AND BANKING
§ 5005
(Pub. L. 108–100, § 3, Oct. 28, 2003, 117 Stat. 1178.)
Editorial Notes
REFERENCES IN TEXT
This chapter, referred to in text, 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
(a) No agreement required
A person may deposit, present, or send for col-
lection 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 equiva-
lent of the original check for all purposes, in-
cluding any provision of any Federal or State
law, and for all persons if the substitute check—
(1) accurately represents all of the informa-
tion 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 elec-
tronic form or in the form of the original paper
check or a substitute check) for forward collec-
tion or ret
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 5004
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.