[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: 31CFR240.7]

[Page 85-86]
 
                  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.  240.7  Declination protest.

    (a) Who may protest. Only a presenting bank may protest the 
declination of a check that it has presented to a Federal Reserve Bank 
for payment.
    (b) Basis for protest. Where Treasury, in accordance with Sec.  
240.6, has made a declination of a check presented for payment and a 
Federal Reserve Bank has reversed its provisional credit to the 
presenting bank, the presenting bank may file a protest challenging the

[[Page 86]]

factual basis for such declination. Protests may be filed challenging 
the following determinations:
    (1) Counterfeit checks. The presenting bank may offer evidence that 
the check is not a counterfeit.
    (2) Altered checks. The presenting bank may offer evidence that the 
check is not altered.
    (3) Checks bearing forged or unauthorized drawer's signatures. The 
presenting bank may offer evidence that the drawer's signature was 
authentic or was authorized.
    (4) Checks bearing a forged or unauthorized indorsement. The 
presenting bank may offer evidence that an indorsement on the back of 
the check was not forged or was otherwise authorized in accordance with 
the requirements of Sec. Sec.  240.13 through 240.17.
    (5) Prior presentment. The presenting bank may offer evidence that 
the check or a paper or electronic representation thereof has not 
already been presented to, and paid by, Treasury.
    (6) Adequacy of substitute check or electronic check. The presenting 
bank may offer an original check or a copy of the check that is 
sufficient to support a determination that the check does not contain a 
material defect or alteration.
    (c) Procedures for filing a protest. A declination protest must be 
in writing, and must be sent to: Department of the Treasury, Financial 
Management Service, Branch Manager, Financial Processing Division, Check 
Reconciliation Branch, Room 700-A, 3700 East-West Highway, Hyattsville, 
MD 20782, or to such other address as Treasury may publish in the 
Treasury Financial Manual, which can be found at http://
www.fms.treas.gov. Treasury will not consider any protest unless it is 
received within 90 days from the declination date.
    (d) Review of a declination protest. The Director, Financial 
Processing Division, or an authorized designee, will make every effort 
to decide any protest properly submitted under this section within 60 
days, and will notify the presenting bank of Treasury's decision. In 
those cases where it is not possible to render a decision within 60 
days, the Director, Financial Processing Division, or an authorized 
designee, will notify the presenting bank of the delay. Neither the 
Director, Financial Processing Division, nor an authorized designee, 
will have any involvement in the decision to deny payment of a check 
under Sec.  240.6 of this part.
    (1) If, based on the evidence provided, the Director of the 
Financial Processing Division, or an authorized designee, finds that the 
presenting bank has met, by a preponderance of the evidence, the 
criteria in paragraph (b) of this section, Treasury will reverse its 
decision to decline payment on the check by directing a Federal Reserve 
Bank to provide credit in the amount of the check to the presenting 
bank.
    (2) If, based on the evidence provided, the Director of the 
Financial Processing Division, or an authorized designee, finds that the 
presenting bank has failed to meet, by a preponderance of the evidence, 
the criteria in paragraph (b) of this section, the declination will not 
be reversed.