[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR240.7]

[Page 83-84]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 240--INDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE UNITED STATES TREASURY--Table of Contents
 
Sec. 240.7  Demand and protest.

    (a) For all reclamations an initial demand for refund of the amount 
of a check payment will be made by sending a ``Request for Refund 
(Reclamation),'' to the presenting bank or any other indorser. This 
Request shall advise the presenting bank of the amount demanded and the 
reason for the demand. Treasury will make follow-up demands by including 
each unpaid item on at least three monthly interest billing statements 
sent to the presenting bank. Monthly interest billing statements will 
identify any unpaid reclamation demands and will also show the amount of 
any accrued interest for each outstanding reclamation. Any discrepancies 
should be brought to Treasury's attention immediately at the address 
listed in paragraph (b) of this section. Monthly interest billing 
statements will contain or be accompanied by notice to the bank:
    (1) That Treasury intends to collect the debt through administrative 
offset in accordance with Sec. 240.8 if the reclamation is not paid 
within 120 days of the reclamation date, and if administrative offset is 
unsuccessful, that Treasury intends to collect the debt through Treasury 
Check Offset in accordance with Sec. 240.9;

[[Page 84]]

    (2) That the bank has an opportunity to inspect and copy Treasury's 
records with respect to the reclamation;
    (3) That the bank may, by filing a protest, request Treasury to 
review its decision that the bank is liable for the reclamation; and
    (4) That the bank has an opportunity to enter into a written 
agreement with Treasury for the repayment of the amount of the 
reclamation. A request for a payment agreement must be accompanied by 
proof that satisfies the Treasury that the requesting bank is unable to 
repay the entire amount owed at the time that it is due.
    (b) Requests for an appointment to inspect and copy Treasury's 
records with respect to a reclamation and requests to enter into 
repayment agreements should be sent in writing to: Department of the 
Treasury, Financial Management Service, Financial Processing Division, 
Reclamation Branch, Room 700-D, P.O. Box 1849, Hyattsville, MD 20788.
    (c)(1) If a presenting bank wishes to contest its liability for the 
principal amount demanded, it shall send a protest, i.e., a written 
statement and copies of all documentary evidence (e.g., affidavits, 
account agreements, signature cards) and other written information 
raising a question of law or fact which, if resolved in the presenting 
bank's favor, would show that the presenting bank is not liable, to: 
Department of the Treasury, Financial Management Service, Financial 
Processing Division, Reclamation Branch, Room 700-D, P.O. Box 1849, 
Hyattsville, MD 20788. The Director, Financial Processing Division, who 
has supervisory authority over the Reclamation Branch, or his/her 
authorized subordinate, shall consider and decide any protest properly 
submitted under this paragraph. Neither the Director, Financial 
Processing Division, nor any of his/her subordinates, shall have any 
involvement in the process of making findings or demands under 
Sec. 240.6(a). In order to be considered, and to be timely, a protest 
must be received not later than 90 days after the reclamation date. 
Treasury will refrain from collection in accordance with Sec. 240.8 or 
Sec. 240.9 while a timely protest is being considered. Unresolved 
protested items will be appropriately annotated on the monthly summary 
of debt statement.
    (2) If Treasury accepts the protest, the presenting bank shall be 
notified in writing that efforts to collect the item and any accrued 
interest have been abandoned.
    (3) If the evidence sent by the presenting bank does not satisfy 
Treasury that refund of the amount demanded is not required under 
Sec. 240.6(a), Treasury will notify the presenting bank in writing of 
its decision that the bank is liable for the amount demanded and the 
reasons for its decision. If the presenting bank fails to send the 
amount demanded within 30 days of the date of Treasury's decision, 
Treasury shall proceed to collect the amount owed in accordance with 
Sec. 240.8, provided that no offset shall be taken sooner than 120 days 
after the reclamation date.
    (4) If an item, and/or accrued interest relating to that item 
remains unpaid for 90 days after the reclamation date and if there is no 
unresolved protest associated with the item, the monthly interest 
billing statement will be annotated with a notice that the presenting 
bank has until the next billing date to make payment on the item or be 
subject to offset thereon.

[54 FR 35642, Aug. 29, 1989, as amended at 67 FR 36518, May 24, 2002]