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U.S. Code as of:
01/19/04
Section 4008. Regulations and reports by Board
(a) In general
After notice and opportunity to submit comment in accordance with
section 553(c) of title 5, the Board shall prescribe regulations -
(1) to carry out the provisions of this chapter;
(2) to prevent the circumvention or evasion of such provisions;
and
(3) to facilitate compliance with such provisions.
(b) Regulations relating to improvement of check processing system
In order to improve the check processing system, the Board shall
consider (among other proposals) requiring, by regulation, that -
(1) depository institutions be charged based upon notification
that a check or similar instrument will be presented for payment;
(2) the Federal Reserve banks and depository institutions
provide for check truncation;
(3) depository institutions be provided incentives to return
items promptly to the depository institution of first deposit;
(4) the Federal Reserve banks and depository institutions take
such actions as are necessary to automate the process of
returning unpaid checks,
(5) each depository institution and Federal Reserve bank -
(A) place its endorsement, and other notations specified in
regulations of the Board, on checks in the positions specified
in such regulations; and
(B) take such actions as are necessary to -
(i) automate the process of reading endorsements; and
(ii) eliminate unnecessary endorsements;
(6) within one business day after an originating depository
institution is presented a check (for more than such minimum
amount as the Board may prescribe) -
(A) such originating depository institution determines
whether it will pay such check; and
(B) if such originating depository institution determines
that it will not pay such check, such originating depository
institution directly notify the receiving depository
institution of such determination;
(7) regardless of where a check is cleared initially, all
returned checks be eligible to be returned through the Federal
Reserve System;
(8) Federal Reserve banks and depository institutions
participate in the development and implementation of an
electronic clearinghouse process to the extent the Board
determines, pursuant to the study under subsection (f) of this
section, that such a process is feasible; and
(9) originating depository institutions be permitted to return
unpaid checks directly to, and obtain reimbursement for such
checks directly from, the receiving depository institution.
(c) Regulatory responsibility of Board for payment system
(1) Responsibility for payment system
In order to carry out the provisions of this chapter, the Board
of Governors of the Federal Reserve System shall have the
responsibility to regulate -
(A) any aspect of the payment system, including the receipt,
payment, collection, or clearing of checks; and
(B) any related function of the payment system with respect
to checks.
(2) Regulations
The Board shall prescribe such regulations as it may determine
to be appropriate to carry out its responsibility under paragraph
(1).
(d) Reports
(1) Implementation progress reports
(A) Required reports
The Board shall transmit a report to both Houses of the
Congress not later than 18, 30, and 48 months after August 10,
1987.
(B) Contents of report
Each such report shall describe -
(i) the actions taken and progress made by the Board to
implement the schedules established in section 4002 of this
title, and
(ii) the impact of this chapter on consumers and depository
institutions.
(2) Evaluation of temporary schedule report
(A) Report required
The Board shall transmit a report to both Houses of the
Congress not later than 2 years after August 10, 1987,
regarding the effects the temporary schedule established under
section 4002(c) of this title have had on depository
institutions and the public.
(B) Contents of report
Such report shall also assess the potential impact the
implementation of the schedule established in section 4002(b)
of this title will have on depository institutions and the
public, including an estimate of the risks to and losses of
depository institutions and the benefits to consumers. Such
report shall also contain such recommendations for legislative
or administrative action as the Board may determine to be
necessary.
(3) Comptroller General evaluation report
Not later than 6 months after September 1, 1988, the
Comptroller General of the United States shall transmit a report
to the Congress evaluating the implementation and administration
of this chapter.
(e) Consultation
In prescribing regulations under subsections (a) and (b) of this
section, the Board shall consult with the Comptroller of the
Currency, the Board of Directors of the Federal Deposit Insurance
Corporation, the Federal Home Loan Bank Board, and the National
Credit Union Administration Board.
(f) Electronic clearinghouse study
(1) Study required
The Board shall study the feasibility of modernizing and
accelerating the check payment system through the development of
an electronic clearinghouse process utilizing existing
telecommunications technology to avoid the necessity of actual
presentment of the paper instrument to a payor institution before
such institution is charged for the item.
(2) Consultation; factors to be studied
In connection with the study required under paragraph (1), the
Board shall -
(A) consult with appropriate experts in telecommunications
technology; and
(B) consider all practical and legal impediments to the
development of an electronic clearinghouse process.
(3) Report required
The Board shall report its conclusions to the Congress within 9
months of August 10, 1987.
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