[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR240.12]

[Page 90-91]
 
                  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 
 
Sec.  240.12  Processing of checks.

    (a) Federal Reserve Banks. (1) Federal Reserve Banks must cash 
checks for Government disbursing officials when such checks are drawn by 
the disbursing officials to their own order, except that payment of such 
checks must be refused if:
    (i) A check bears a material defect or alteration;
    (ii) A check was issued more than one year prior to the date of 
presentment; or
    (iii) The Federal Reserve Bank has been notified by Treasury, in 
accordance with Sec.  240.15(c), that a check was issued to a deceased 
payee.
    (2) Federal Reserve Banks are not required to cash checks presented 
directly to them by the general public.
    (3) As a depositary of public funds, each Federal Reserve Bank 
shall:
    (i) Receive checks from its member banks, nonmember clearing banks, 
or other depositors, when indorsed by such banks or depositors who 
guarantee all prior indorsements thereon;
    (ii) Give immediate provisional credit therefore in accordance with 
their current Time Schedules and charge the amount of the checks cashed 
or otherwise received to the General Account of the United States 
Treasury, subject to first examination and payment by Treasury;
    (iii) Forward payment records and requested checks to Treasury; and
    (iv) Release the original checks and substitute checks to a 
designated Regional Records Services Facility upon notification from 
Treasury.
    (4) If a check is to be declined under Sec.  240.6, Treasury will 
provide the Federal Reserve Bank with notice of declination upon the 
completion of first examination. Federal Reserve Banks must give 
immediate credit therefor to Treasury's General Account, thereby 
reversing the previous charge to the General Account for such check.
    (5) Treasury authorizes each Federal Reserve Bank to release a copy 
of the check to the presenting bank when payment is declined.
    (b) Treasury General Account (TGA) designated depositaries outside 
the United States. (1) Financial institutions outside the United States 
designated by Treasury as depositaries of public money in accordance 
with 31 U.S.C. 3303 and permitted to charge checks to the General 
Account of the United States Treasury in accordance with

[[Page 91]]

Treasury implementing instructions shall be governed by the operating 
instructions contained in the letter of authorization to them from 
Treasury and are, as presenting banks, subject to the provisions of 
Sec. Sec.  240.4, 240.8, and 240.9.
    (2) If a check is to be declined under Sec.  240.6, Treasury will 
provide the presenting bank with notice of declination upon the 
completion of first examination and will provide the presenting bank 
with a copy or image of the check. Such presenting bank must give 
immediate credit therefore to the General Account of the United States 
Treasury, thereby reversing the previous charge to the Account for such 
check. Treasury authorizes the designated Federal Reserve Bank to return 
to such presenting bank the original check when payment is declined in 
accordance with Sec.  240.5(a) or Sec.  240.15(c).
    (3) To ensure complete recovery of the amount due, reclamation 
refunds require payment in United States dollars with checks drawn on or 
payable through United States financial institutions located in the 
United States. Reclamation refunds initiated by financial institutions 
outside of the United States must be sent through their headquarters or 
U.S. correspondent financial institution only. The payments should be 
accompanied by documentation identifying the check that was the subject 
of the reclamation (such as a copy of the reclamation notice or the 
current monthly statement). Reclamation refunds shall not be deposited 
to Treasury's General Account.
    (4) Additional information relating to designated depositaries 
outside the United States may be found in Volume VI, Chapter 2000, of 
the Treasury Financial Manual, which can be found at http://
www.fms.treas.gov.

                          Indorsement of Checks