[Code of Federal Regulations]

[Title 12, Volume 3]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR229.39]



[Page 565-566]

 

                       TITLE 12--BANKS AND BANKING

 

                   CHAPTER II--FEDERAL RESERVE SYSTEM

 

PART 229_AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS (REGULATION CC)

--Table of Contents

 

                     Subpart C_Collection of Checks

 

Sec. 229.39  lnsolvency of bank.



    (a) Duty of receiver. A check or returned check in, or coming into, 

the possession of a paying, collecting, depositary, or returning bank 

that suspends payment, and which is not paid, shall be returned by the 

receiver, trustee, or agent in charge of the closed bank to the bank or 

customer that transferred the check to the closed bank.

    (b) Preference against paying or depositary bank. If a paying bank 

finally pays a check, or if a depositary bank becomes obligated to pay a 

returned check, and suspends payment without making a settlement for the 

check or returned check with the prior bank that is or becomes final, 

the prior bank



[[Page 566]]



has a preferred claim against the paying bank or the depositary bank.

    (c) Preference against collecting, paying, or returning bank. If a 

collecting, paying, or returning bank receives settlement from a 

subsequent bank for a check or returned check, which settlement is or 

becomes final, and suspends payments without making a settlement for the 

check with the prior bank, which is or becomes final, the prior bank has 

a preferred claim against the collecting or returning bank.

    (d) Preference against presenting bank. If a paying bank settles 

with a presenting bank for one or more checks, and if the presenting 

bank breaches a warranty specified in Sec. 229.34(c) (1) or (3) with 

respect to those checks and suspends payments before satisfying the 

paying bank's warranty claim, the paying bank has a preferred claim 

against the presenting bank for the amount of the warranty claim.

    (e) Finality of settlement. If a paying or depositary bank gives, or 

a collecting, paying, or returning bank gives or receives, a settlement 

for a check or returned check and thereafter suspends payment, the 

suspension does not prevent or interfere with the settlement becoming 

final if such finality occurs automatically upon the lapse of a certain 

time or the happening of certain events.



[Reg. CC, 53 FR 19433, May 27, 1988, as amended at 57 FR 46973, Oct. 14, 

1992; Reg. CC, 62 FR 13810, Mar. 24, 1997]