Mobile remote deposit capture, and specifically, the ability for a fraudster or forgetful person to deposit a check by taking a picture using their smart phone, and then depositing the paper copy at a different financial institution or check-cashing business, was not taken into consideration by these two pieces of regulation. RDC was initially developed as a convenience for a business that received checks to deposit the checks electronically (typically using a scanner provided by its bank), and was made possible by Regulation CC, which implements the Expedited Funds Availability Act of 1987 (“EFA Act”) and the Check Clearing for the 21st Century Act of 2003 (“Check 21 Act”). CC now assigns liability of fraud when a check is both deposited remotely and then also deposited or cashed in person.:ĭespite the slight decline in the number of checks written, recipients overwhelmingly prefer to deposit checks from the comfort of their phone, rather than going to a branch or ATM. An article in The Payments Review provides a great understanding of what the new compliance measures means to financial institutions.
The other news is that the new Regulation CC deadline regarding RDC liability is fast approaching. Yesterday, I commented on the news that USAA is suing Wells Fargo over its patents that protect aspects of technology around mobile RDC. There’s a lot going on with remote deposit capture (RDC) these days.
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