[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: 31CFR240.9]

[Page 85]
 
                  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. 240.9  Treasury Check Offset.

    (a) If Treasury is unable to effect collection pursuant to 
Sec. 240.7 or Sec. 240.8 of this part, it will collect the principal 
amount of the reclamation, accrued interest, penalty, and administrative 
costs through Treasury Check Offset. Treasury Check Offset occurs when, 
at the direction of Treasury, a Federal Reserve Bank withholds, that is, 
offsets, credit from a presenting bank (e.g., a financial institution 
presenting a Treasury check for ultimate charge to the account of the 
United States Treasury). The amount of credit offset is applied to the 
principal amount of the reclamation, accrued interest, penalties, and 
administrative costs owed by the presenting bank. As provided by the 
provisions of 31 U.S.C. 3712(e), by presenting Treasury checks for 
payment, the presenting bank is deemed to authorize Treasury Check 
Offset.
    (b) If Treasury effects offset under this section and it is later 
determined that the presenting bank paid the principal amount of the 
reclamation and accrued interest, penalties, and administrative costs 
thereon, or that a presenting bank was not liable for the amount of the 
reclamation, Treasury will promptly refund to the presenting bank the 
amount of its payment. Treasury may refund the amount either by applying 
the amount to another reclamation debt in accordance with this Part or 
other applicable law, or by returning the amount to the presenting bank.
    (c) Treasury Check Offset is used for the purpose of collecting debt 
owed by a presenting bank to the Federal Government. As a consequence, 
presenting banks shall not be able to use the fact that Treasury checks 
presented for payment have not been paid as the basis for a claim 
against Treasury, a Federal Reserve Bank, or other persons or entities, 
including payees or other indorsers of checks, for the amount of the 
credit offset pursuant to 31 U.S.C. 3712(e) and this section.
    (d) This section does not apply to a claim based upon a reclamation 
that has been outstanding for more than 10 years from the date of 
delinquency.

[67 FR 36518, May 24, 2002]