CU Trades Give Thumbs Up to Treasury Check Proposal

WASHINGTON-NAFCU and CUNA recently conveyed their overall approval of Treasury’s proposed rule aimed at balancing the demands of the federal check disbursing system with the structure for commercial checks in separate comment letters. “In order to achieve this balance, the proposed rule sets a certain date by which all Treasury checks are deemed paid while allocating the risk of loss to financial institutions only in those instances where reasonable actions, if properly taken by financial institutions, could have prevented a loss to the United States Treasury,” NAFCU President and CEO Fred Becker wrote in the letter. According to CUNA’s letter, the proposal would limit the time Treasury has to reverse final payments; allocate losses for forgeries and counterfeits; and clarify protest procedures against Treasury decisions, along with numerous other changes. The 90 days Treasury gave itself to examine a check before taking the provisional status off the payment is too long, CUNA Assistant General Counsel Michelle Profit wrote in the trade groups comment letter. “Establishing a 90-day timeframe would allow financial institutions to proceed under a more predictable and stable set of expectations that the current rules, which provide no limit, allow. However, CUNA encourages Treasury to reduce the time it needs for an examination and reduce the period accordingly because Treasury allows itself much more time than is provided by the Uniform Commercial Code,” she stated. Additionally, the proposal would require the presenting financial institution to offer “sufficient, credible evidence” that Treasury erroneously declined a check. Treasury’s proposal also modifies the use of powers of attorney in endorsing Treasury checks. -