12 U.S.C. § 5003 — General provisions governing substitute

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 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 indus- try 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 provi- sion relating to the protection of customers, of part 229 of title 12 of the Code of Federal Regula- tions, 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. (Pub. L. 108–100, § 4, Oct. 28, 2003, 117 Stat. 1180.) 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. § 5004. Substitute check warranties 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 return- ing bank, the depositary bank, the drawee, the drawer, the payee, the depositor, and any en- dorser (regardless of whether the warrantee re- ceives the substitute check or another paper or electronic form of the substitute check or origi- nal check) that— (1) the substitute check meets all the re- quirements for legal equivalence under section 5003(b) of this title; 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 en- dorser has already paid. (Pub. L. 108–100, § 5, Oct. 28, 2003, 117 Stat. 1181.) 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. § 5005. Indemnity (a) Indemnity A reconverting bank and each bank that sub- sequently transfers, presents, or returns a sub- stitute check in any electronic or paper form, and receives consideration for such transfer, presentment, or return shall indemnify the transferee, any subsequent collecting or return- ing bank, the depositary bank, the drawee, the drawer, the payee, the depositor, and any en- dorser, up to the amount described in sub- sections (b) and (c), as applicable, to the extent of any loss incurred by any recipient of a sub- stitute check if that loss occurred due to the re- ceipt of a substitute check instead of the origi- nal check. (b) Indemnity amount (1) Amount in event of breach of warranty The amount of the indemnity under sub- section (a) shall be the amount of any loss (in- cluding costs and reasonable attorney’s fees and other expenses of representation) proxi- mately caused by a breach of a warranty pro- vided under section 5004 of this title. (2) Amount in absence of breach of warranty In the absence of a breach of a warranty pro- vided under section 5004 of this title, the