12 U.S.C. § 5007 — Expedited recredit procedures for banks

Page 1780 TITLE 12—BANKS AND BANKING § 5007 subsection (c) to any consumer account may impose any overdraft fees with respect to drafts drawn by the consumer on such recred- ited 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 determina- tion— (A) the original check or a copy of the original check (including an image or a sub- stitute check) that— (i) accurately represents all of the infor- mation on the front and back of the origi- nal 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 de- termination 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 deter- mination. (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 busi- ness 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 addi- tional damages under section 5005 or 5009 of this title. (h) Clarification concerning consumer posses- sion A consumer who was provided a substitute check may make a claim for an expedited re- credit under this section with regard to a trans- action involving the substitute check whether or not the consumer is in possession of the sub- stitute check. (i) Scope of application This section shall only apply to customers who are consumers. (Pub. L. 108–100, § 7, Oct. 28, 2003, 117 Stat. 1182.) 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. § 5007. Expedited recredit procedures for banks (a) Recredit claims (1) In general A bank may make a claim against an indem- nifying 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 con- sumer under section 5006 of this title with respect to a substitute check or would have been subject to such a claim had the con- sumer’s account been charged; (B) the claimant bank has suffered a re- sulting loss or is obligated to recredit a con- sumer account under section 5006 of this title with respect to such substitute check; and (C) production of the original check, an- other 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 sub- mitted by the claimant bank to an indem- nifying bank before the end of the 120-day pe- riod 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 in- demnifying bank— (A) a description of— (i) the claim, including an explanation of why the substitute check cannot be prop- erly 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 Page 1781 TITLE 12—BANKS AND BANKING § 5008 the consumer’s account under section 5006 of this title, together with an estimate of the amount of the loss or recredit; (C) the reason why production of the origi- nal check, another substitute check, or a better copy of the original check is nec- essary to determine the validity of the charge to the consumer account or the war- ranty claim; and (D) information sufficient for the indem- nifying bank to identify the substitute check and to investigate the claim. (2) Requirements relating to copies of sub- stitute checks If the information submitted by a claimant bank pursuant to paragraph (1) in connection with a claim for an expedited recredit includes a copy of any substitute check for which any such claim is made, the claimant bank shall take reasonable steps to ensure that any such copy cannot be— (A) mistaken for the legal equivalent of the check under section 5003(b) of this title; or (B) sent or handled by any bank, including the indemnifying bank, as a forward collec- tion or returned check. (3) Claim in writing (A) In general An indemnifying bank may, in the discre- tion of the bank, require the claimant bank to submit the information required by para- graph (1) in writing, including a copy of the written or electronically submitted claim, if any, that the consumer provided in accord- ance with section 5006(b) of this title. (B) Means of submission An indemnifying bank that requires a sub- mission of information under subparagraph (A) may permit the claimant bank to make the submission electronically, if the claim- ant bank has agreed to communicate with the indemnifying bank in that manner. (c) Recredit by indemnifying bank (1) Prompt action required No later than 10 business days after the busi- ness day on which an indemnifying bank re- ceives a claim under subsection (a) from a claimant bank with respect to a substitute check, the indemnifying bank shall— (A) provide, to the claimant bank, the original check (with respect to such sub- stitute check) or a copy of the original check (including an image or a substitute check) that— (i) accurately represents all of the infor- mation on the front and back of the origi- nal check (as of the time the original check was truncated); or (ii) is otherwise sufficient to determine the bank’s claim is not valid; and (B) recredit the claimant bank for the amount of the claim up to the amount of the substitute check, plus interest if applicable; or (C) provide information to the claimant bank as to why the indemnifying bank is not obligated to comply with subparagraph (A) or (B). (2) Recredit does not abrogate other liabilities Providing a recredit under this subsection to a claimant bank with respect to a substitute check shall not absolve the indemnifying bank from liability for claims brought under any other law or from additional damages under section 5005 or 5009 of this title with respect to such check. (3) Refund to indemnifying bank If a claimant bank reverses, in accordance with section 5006(e) of this title, a recredit pre- viously made to a consumer account under section 5006(c) of this title, or otherwise re- ceives a credit or recredit with regard to such substitute check, the claimant bank shall promptly refund to any indemnifying bank any amount previously advanced by the in- demnifying bank in connection with such sub- stitute check. (d) Production of original check or a sufficient copy governed by section 5005(d) If the indemnifying bank provides the claim- ant bank with the original check or a copy of the original check (including an image or a sub- stitute check) under subsection (c)(1)(A), section 5005(d) of this title shall govern any right of the indemnifying bank to any repayment of any funds the indemnifying bank has recredited to the claimant bank pursuant to subsection (c). (Pub. L. 108–100, § 8, Oct. 28, 2003, 117 Stat. 1186.) 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. § 5008. Delays in an emergency A delay by a bank beyond the time limits pre- scribed or permitted by this chapter shall be ex- cused if the delay is caused by interruption of communication or computer facilities, suspen- sion of payments by another bank, war, emer- gency conditions, failure of equipment, or other circumstances beyond the control of a bank and if the bank uses such diligence as the cir- cumstances require. (Pub. L. 108–100, § 9, Oct. 28, 2003, 117 Stat. 1188.) 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.