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Home >> Checks/Money Orders
Regulation for Timely Processing of Check
Is there a federal banking regulation that dictates a time period (i.e, 24 or 48 hours) during which a bank must act after it has been presented with a check for payment? I've found Regulation CC, but I'm not 100% sure if this is the exact one for which I should be looking.
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 Regulation CC does provide a requirement for prompt return and, in some cases, notification to the depositary bank concerning the return. However, the Uniform Commercial Code, a version of which is adopted by each of the states, DC, Puerto Rico and other U.S. jurisdictions, imposes a midnight deadline for acting on a check. The midnight in question is midnight at the end of the business day next following the business day on which the check was presented for payment.
If a check is received by a bank for payment on Monday, it appears on the bank's records as posted on Tuesday. If the bank is to return the check for stop payment, insufficient funds, unauthorized signature, stale date, etc., it must start the check on its return journey by midnight Tuesday. If it is unable to send the physical check, it must notify the depositary bank of the return or send a notice in lieu of return, stating the reason for the return.
Published on BankingQuestions.com 5/19/10
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