-CITE-
    12 USC CHAPTER 50 - CHECK TRUNCATION                        01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
                       CHAPTER 50 - CHECK TRUNCATION                   

-MISC1-
    Sec.                                                     
    5001.       Findings; purposes.                                   
    5002.       Definitions.                                          
    5003.       General provisions governing substitute checks.       
    5004.       Substitute check warranties.                          
    5005.       Indemnity.                                            
    5006.       Expedited recredit for consumers.                     
    5007.       Expedited recredit procedures for banks.              
    5008.       Delays in an emergency.                               
    5009.       Measure of damages.                                   
    5010.       Statute of limitations and notice of claim.           
    5011.       Consumer awareness.                                   
    5012.       Effect on other law.                                  
    5013.       Variation by agreement.                               
    5014.       Regulations.                                          
    5015.       Study and report on funds availability.               
    5016.       Statistical reporting of costs and revenues for
                 transporting checks between reserve banks.           
    5017.       Evaluation and report by the Comptroller General.     
    5018.       Depositary services efficiency and cost reduction.    

-End-



-CITE-
    12 USC Sec. 5001                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5001. Findings; purposes

-STATUTE-
    (a) Findings
      The Congress finds as follows:
        (1) In the Expedited Funds Availability Act [12 U.S.C. 4001 et
      seq.], enacted on August 10, 1987, the Congress directed the
      Board of Governors of the Federal Reserve System to consider
      establishing regulations requiring Federal reserve banks and
      depository institutions to provide for check truncation, in order
      to improve the check processing system.
        (2) In that same Act, the Congress - 
          (A) provided the Board of Governors of the Federal Reserve
        System with full authority to regulate all aspects of the
        payment system, including the receipt, payment, collection, and
        clearing of checks, and related functions of the payment system
        pertaining to checks; and
          (B) directed that the exercise of such authority by the Board
        superseded any State law, including the Uniform Commercial
        Code, as in effect in any State.

        (3) Check truncation is no less desirable in 2003 for both
      financial service customers and the financial services industry,
      to reduce costs, improve efficiency in check collections, and
      expedite funds availability for customers than it was over 15
      years ago when Congress first directed the Board to consider
      establishing such a process.
    (b) Purposes
      The purposes of this chapter are as follows:
        (1) To facilitate check truncation by authorizing substitute
      checks.
        (2) To foster innovation in the check collection system without
      mandating receipt of checks in electronic form.
        (3) To improve the overall efficiency of the Nation's payments
      system.

-SOURCE-
    (Pub. L. 108-100, Sec. 2, Oct. 28, 2003, 117 Stat. 1177.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The Expedited Funds Availability Act, referred to in subsec.
    (a)(1), (2), is title VI of Pub. L. 100-86, Aug. 10, 1987, 101
    Stat. 635, as amended, which is classified principally to chapter
    41 (Sec. 4001 et seq.) of this title. For complete classification
    of this Act to the Code, see Short Title note set out under section
    4001 of this title and Tables.
      This chapter, referred to in subsec. (b), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out below and Tables.


-MISC1-
                              EFFECTIVE DATE                          
      Pub. L. 108-100, Sec. 20, Oct. 28, 2003, 117 Stat. 1194, provided
    that: "This Act [enacting this chapter, amending section 412 of
    this title, and enacting provisions set out as notes under this
    section] shall take effect at the end of the 12-month period
    beginning on the date of the enactment of this Act [Oct. 28, 2003],
    except as otherwise specifically provided in this Act."

                                SHORT TITLE                            
      Pub. L. 108-100, Sec. 1(a), Oct. 28, 2003, 117 Stat. 1177,
    provided that: "This Act [enacting this chapter, amending section
    412 of this title, and enacting provisions set out as notes under
    this section] may be cited as the 'Check Clearing for the 21st
    Century Act' or the 'Check 21 Act'."

-End-



-CITE-
    12 USC Sec. 5002                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5002. Definitions

-STATUTE-
      For purposes of this chapter, the following definitions shall
    apply:
      (1) Account
        The term "account" means a deposit account at a bank.
      (2) Bank
        The term "bank" means any person that is located in a State and
      engaged in the business of banking and includes - 
          (A) any depository institution (as defined in section
        461(b)(1)(A) of this title);
          (B) any Federal reserve bank;
          (C) any Federal home loan bank; or
          (D) to the extent it acts as a payor - 
            (i) the Treasury of the United States;
            (ii) the United States Postal Service;
            (iii) a State government; or
            (iv) a unit of general local government (as defined in
          section 4001(24) of this title).
      (3) Banking terms
        (A) Collecting bank
          The term "collecting bank" means any bank handling a check
        for collection except the paying bank.
        (B) Depositary bank
          The term "depositary bank" means - 
            (i) the first bank to which a check is transferred, even if
          such bank is also the paying bank or the payee; or
            (ii) a bank to which a check is transferred for deposit in
          an account at such bank, even if the check is physically
          received and indorsed first by another bank.
        (C) Paying bank
          The term "paying bank" means - 
            (i) the bank by which a check is payable, unless the check
          is payable at or through another bank and is sent to the
          other bank for payment or collection; or
            (ii) the bank at or through which a check is payable and to
          which the check is sent for payment or collection.
        (D) Returning bank
          (i) In general
            The term "returning bank" means a bank (other than the
          paying or depositary bank) handling a returned check or
          notice in lieu of return.
          (ii) Treatment as collecting bank
            No provision of this chapter shall be construed as
          affecting the treatment of a returning bank as a collecting
          bank for purposes of section 4-202(b) of the Uniform
          Commercial Code.
      (4) Board
        The term "Board" means the Board of Governors of the Federal
      Reserve System.
      (5) Business day
        The term "business day" has the same meaning as in section
      4001(3) of this title.
      (6) Check
        The term "check" - 
          (A) means a draft, payable on demand and drawn on or payable
        through or at an office of a bank, whether or not negotiable,
        that is handled for forward collection or return, including a
        substitute check and a travelers check; and
          (B) does not include a noncash item or an item payable in a
        medium other than United States dollars.
      (7) Consumer
        The term "consumer" means an individual who - 
          (A) with respect to a check handled for forward collection,
        draws the check on a consumer account; or
          (B) with respect to a check handled for return, deposits the
        check into, or cashes the check against, a consumer account.
      (8) Consumer account
        The term "consumer account" has the same meaning as in section
      4001(10) of this title.
      (9) Customer
        The term "customer" means a person having an account with a
      bank.
      (10) Forward collection
        The term "forward collection" means the transfer by a bank of a
      check to a collecting bank for settlement or the paying bank for
      payment.
      (11) Indemnifying bank
        The term "indemnifying bank" means a bank that is providing an
      indemnity under section 5005 of this title with respect to a
      substitute check.
      (12) MICR line
        The terms "MICR line" and "magnetic ink character recognition
      line" mean the numbers, which may include the bank routing
      number, account number, check number, check amount, and other
      information, that are printed near the bottom of a check in
      magnetic ink in accordance with generally applicable industry
      standards.
      (13) Noncash item
        The term "noncash item" has the same meaning as in section
      4001(14) of this title.
      (14) Person
        The term "person" means a natural person, corporation,
      unincorporated company, partnership, government unit or
      instrumentality, trust, or any other entity or organization.
      (15) Reconverting bank
        The term "reconverting bank" means - 
          (A) the bank that creates a substitute check; or
          (B) if a substitute check is created by a person other than a
        bank, the first bank that transfers or presents such substitute
        check.
      (16) Substitute check
        The term "substitute check" means a paper reproduction of the
      original check that - 
          (A) contains an image of the front and back of the original
        check;
          (B) bears a MICR line containing all the information
        appearing on the MICR line of the original check, except as
        provided under generally applicable industry standards for
        substitute checks to facilitate the processing of substitute
        checks;
          (C) conforms, in paper stock, dimension, and otherwise, with
        generally applicable industry standards for substitute checks;
        and
          (D) is suitable for automated processing in the same manner
        as the original check.
      (17) State
        The term "State" has the same meaning as in section 1813(a) of
      this title.
      (18) Truncate
        The term "truncate" means to remove an original paper check
      from the check collection or return process and send to a
      recipient, in lieu of such original paper check, a substitute
      check or, by agreement, information relating to the original
      check (including data taken from the MICR line of the original
      check or an electronic image of the original check), whether with
      or without subsequent delivery of the original paper check.
      (19) Uniform Commercial Code
        The term "Uniform Commercial Code" means the Uniform Commercial
      Code in effect in a State.
      (20) Other terms
        Unless the context requires otherwise, the terms not defined in
      this section shall have the same meanings as in the Uniform
      Commercial Code.

-SOURCE-
    (Pub. L. 108-100, Sec. 3, Oct. 28, 2003, 117 Stat. 1178.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in text, was in the original "this
    Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177, which
    is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5003                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5003. General provisions governing substitute checks

-STATUTE-
    (a) No agreement required
      A person may deposit, present, or send for collection or return a
    substitute check without an agreement with the recipient, so long
    as a bank has made the warranties in section 5004 of this title
    with respect to such substitute check.
    (b) Legal equivalence
      A substitute check shall be the legal equivalent of the original
    check for all purposes, including any provision of any Federal or
    State law, and for all persons if the substitute check - 
        (1) accurately represents all of the information on the front
      and back of the original check as of the time the original check
      was truncated; and
        (2) bears the legend: "This is a legal copy of your check. You
      can use it the same way you would use the original check.".
    (c) Endorsements
      A bank shall ensure that the substitute check for which the bank
    is the reconverting bank bears all endorsements applied by parties
    that previously handled the check (whether in electronic form or in
    the form of the original paper check or a substitute check) for
    forward collection or return.
    (d) Identification of reconverting bank
      A bank shall identify itself as a reconverting bank on any
    substitute check for which the bank is a reconverting bank so as to
    preserve any previous reconverting bank identifications in
    conformance with generally applicable industry standards.
    (e) Applicable law
      A substitute check that is the legal equivalent of the original
    check under subsection (b) shall be subject to any provision,
    including any provision relating to the protection of customers, of
    part 229 of title 12 of the Code of Federal Regulations, the
    Uniform Commercial Code, and any other applicable Federal or State
    law as if such substitute check were the original check, to the
    extent such provision of law is not inconsistent with this chapter.

-SOURCE-
    (Pub. L. 108-100, Sec. 4, Oct. 28, 2003, 117 Stat. 1180.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (e), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5004                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5004. Substitute check warranties

-STATUTE-
      A bank that transfers, presents, or returns a substitute check
    and receives consideration for the check warrants, as a matter of
    law, to the transferee, any subsequent collecting or returning
    bank, the depositary bank, the drawee, the drawer, the payee, the
    depositor, and any endorser (regardless of whether the warrantee
    receives the substitute check or another paper or electronic form
    of the substitute check or original check) that - 
        (1) the substitute check meets all the requirements for legal
      equivalence under section 5003(b) of this title; and
        (2) no depositary bank, drawee, drawer, or endorser will
      receive presentment or return of the substitute check, the
      original check, or a copy or other paper or electronic version of
      the substitute check or original check such that the bank,
      drawee, drawer, or endorser will be asked to make a payment based
      on a check that the bank, drawee, drawer, or endorser has already
      paid.

-SOURCE-
    (Pub. L. 108-100, Sec. 5, Oct. 28, 2003, 117 Stat. 1181.)

-End-



-CITE-
    12 USC Sec. 5005                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5005. Indemnity

-STATUTE-
    (a) Indemnity
      A reconverting bank and each bank that subsequently transfers,
    presents, or returns a substitute check in any electronic or paper
    form, and receives consideration for such transfer, presentment, or
    return shall indemnify the transferee, any subsequent collecting or
    returning bank, the depositary bank, the drawee, the drawer, the
    payee, the depositor, and any endorser, up to the amount described
    in subsections (b) and (c), as applicable, to the extent of any
    loss incurred by any recipient of a substitute check if that loss
    occurred due to the receipt of a substitute check instead of the
    original check.
    (b) Indemnity amount
      (1) Amount in event of breach of warranty
        The amount of the indemnity under subsection (a) shall be the
      amount of any loss (including costs and reasonable attorney's
      fees and other expenses of representation) proximately caused by
      a breach of a warranty provided under section 5004 of this title.
      (2) Amount in absence of breach of warranty
        In the absence of a breach of a warranty provided under section
      5004 of this title, the amount of the indemnity under subsection
      (a) shall be the sum of - 
          (A) the amount of any loss, up to the amount of the
        substitute check; and
          (B) interest and expenses (including costs and reasonable
        attorney's fees and other expenses of representation).
    (c) Comparative negligence
      (1) In general
        If a loss described in subsection (a) results in whole or in
      part from the negligence or failure to act in good faith on the
      part of an indemnified party, then that party's indemnification
      under this section shall be reduced in proportion to the amount
      of negligence or bad faith attributable to that party.
      (2) Rule of construction
        Nothing in this subsection reduces the rights of a consumer or
      any other person under the Uniform Commercial Code or other
      applicable provision of Federal or State law.
    (d) Effect of producing original check or copy
      (1) In general
        If the indemnifying bank produces the original check or a copy
      of the original check (including an image or a substitute check)
      that accurately represents all of the information on the front
      and back of the original check (as of the time the original check
      was truncated) or is otherwise sufficient to determine whether or
      not a claim is valid, the indemnifying bank shall - 
          (A) be liable under this section only for losses covered by
        the indemnity that are incurred up to the time that the
        original check or copy is provided to the indemnified party;
        and
          (B) have a right to the return of any funds it has paid under
        the indemnity in excess of those losses.
      (2) Coordination of indemnity with implied warranty
        The production of the original check, a substitute check, or a
      copy under paragraph (1) by an indemnifying bank shall not
      absolve the bank from any liability on a warranty established
      under this chapter or any other provision of law.
    (e) Subrogation of rights
      (1) In general
        Each indemnifying bank shall be subrogated to the rights of any
      indemnified party to the extent of the indemnity.
      (2) Recovery under warranty
        A bank that indemnifies a party under this section may attempt
      to recover from another party based on a warranty or other claim.
      (3) Duty of indemnified party
        Each indemnified party shall have a duty to comply with all
      reasonable requests for assistance from an indemnifying bank in
      connection with any claim the indemnifying bank brings against a
      warrantor or other party related to a check that forms the basis
      for the indemnification.

-SOURCE-
    (Pub. L. 108-100, Sec. 6, Oct. 28, 2003, 117 Stat. 1181.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (d)(2), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5006                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5006. Expedited recredit for consumers

-STATUTE-
    (a) Recredit claims
      (1) In general
        A consumer may make a claim for expedited recredit from the
      bank that holds the account of the consumer with respect to a
      substitute check, if the consumer asserts in good faith that - 
          (A) the bank charged the consumer's account for a substitute
        check that was provided to the consumer;
          (B) either - 
            (i) the check was not properly charged to the consumer's
          account; or
            (ii) the consumer has a warranty claim with respect to such
          substitute check;

          (C) the consumer suffered a resulting loss; and
          (D) the production of the original check or a better copy of
        the original check is necessary to determine the validity of
        any claim described in subparagraph (B).
      (2) 40-day period
        Any claim under paragraph (1) with respect to a consumer
      account may be submitted by a consumer before the end of the 40-
      day period beginning on the later of - 
          (A) the date on which the financial institution mails or
        delivers, by a means agreed to by the consumer, the periodic
        statement of account for such account which contains
        information concerning the transaction giving rise to the
        claim; or
          (B) the date on which the substitute check is made available
        to the consumer.
      (3) Extension under extenuating circumstances
        If the ability of the consumer to submit the claim within the
      40-day period under paragraph (2) is delayed due to extenuating
      circumstances, including extended travel or the illness of the
      consumer, the 40-day period shall be extended by a reasonable
      amount of time.
    (b) Procedures for claims
      (1) In general
        To make a claim for an expedited recredit under subsection (a)
      with respect to a substitute check, the consumer shall provide to
      the bank that holds the account of such consumer - 
          (A) a description of the claim, including an explanation of -
        
            (i) why the substitute check was not properly charged to
          the consumer's account; or
            (ii) the warranty claim with respect to such check;

          (B) a statement that the consumer suffered a loss and an
        estimate of the amount of the loss;
          (C) the reason why production of the original check or a
        better copy of the original check is necessary to determine the
        validity of the charge to the consumer's account or the
        warranty claim; and
          (D) sufficient information to identify the substitute check
        and to investigate the claim.
      (2) Claim in writing
        (A) In general
          The bank holding the consumer account that is the subject of
        a claim by the consumer under subsection (a) may, in the
        discretion of the bank, require the consumer to submit the
        information required under paragraph (1) in writing.
        (B) Means of submission
          A bank that requires a submission of information under
        subparagraph (A) may permit the consumer to make the submission
        electronically, if the consumer has agreed to communicate with
        the bank in that manner.
    (c) Recredit to consumer
      (1) Conditions for recredit
        The bank shall recredit a consumer account in accordance with
      paragraph (2) for the amount of a substitute check that was
      charged against the consumer account if - 
          (A) a consumer submits a claim to the bank with respect to
        that substitute check that meets the requirement of subsection
        (b); and
          (B) the bank has not - 
            (i) provided to the consumer - 
              (I) the original check; or
              (II) a copy of the original check (including an image or
            a substitute check) that accurately represents all of the
            information on the front and back of the original check, as
            of the time at which the original check was truncated; and

            (ii) demonstrated to the consumer that the substitute check
          was properly charged to the consumer account.
      (2) Timing of recredit
        (A) In general
          The bank shall recredit the consumer's account for the amount
        described in paragraph (1) no later than the end of the
        business day following the business day on which the bank
        determines the consumer's claim is valid.
        (B) Recredit pending investigation
          If the bank has not yet determined that the consumer's claim
        is valid before the end of the 10th business day after the
        business day on which the consumer submitted the claim, the
        bank shall recredit the consumer's account for - 
            (i) the lesser of the amount of the substitute check that
          was charged against the consumer account, or $2,500, together
          with interest if the account is an interest-bearing account,
          no later than the end of such 10th business day; and
            (ii) the remaining amount of the substitute check that was
          charged against the consumer account, if any, together with
          interest if the account is an interest-bearing account, not
          later than the 45th calendar day following the business day
          on which the consumer submits the claim.
    (d) Availability of recredit
      (1) Next business day availability
        Except as provided in paragraph (2), a bank that provides a
      recredit to a consumer account under subsection (c) shall make
      the recredited funds available for withdrawal by the consumer by
      the start of the next business day after the business day on
      which the bank recredits the consumer's account under subsection
      (c).
      (2) Safeguard exceptions
        A bank may delay availability to a consumer of a recredit
      provided under subsection (c)(2)(B)(i) until the start of either
      the business day following the business day on which the bank
      determines that the consumer's claim is valid or the 45th
      calendar day following the business day on which the consumer
      submits a claim for such recredit in accordance with subsection
      (b), whichever is earlier, in any of the following circumstances:
        (A) New accounts
          The claim is made during the 30-day period beginning on the
        business day the consumer account was established.
        (B) Repeated overdrafts
          Without regard to the charge that is the subject of the claim
        for which the recredit was made - 
            (i) on 6 or more business days during the 6-month period
          ending on the date on which the consumer submits the claim,
          the balance in the consumer account was negative or would
          have become negative if checks or other charges to the
          account had been paid; or
            (ii) on 2 or more business days during such 6-month period,
          the balance in the consumer account was negative or would
          have become negative in the amount of $5,000 or more if
          checks or other charges to the account had been paid.
        (C) Prevention of fraud losses
          The bank has reasonable cause to believe that the claim is
        fraudulent, based on facts (other than the fact that the check
        in question or the consumer is of a particular class) that
        would cause a well-grounded belief in the mind of a reasonable
        person that the claim is fraudulent.
      (3) Overdraft fees
        No bank that, in accordance with paragraph (2), delays the
      availability of a recredit under subsection (c) to any consumer
      account may impose any overdraft fees with respect to drafts
      drawn by the consumer on such recredited amount before the end of
      the 5-day period beginning on the date notice of the delay in the
      availability of such amount is sent by the bank to the consumer.
    (e) Reversal of recredit
      A bank may reverse a recredit to a consumer account if the bank -
    
        (1) determines that a substitute check for which the bank
      recredited a consumer account under subsection (c) was in fact
      properly charged to the consumer account; and
        (2) notifies the consumer in accordance with subsection (f)(3).
    (f) Notice to consumer
      (1) Notice if consumer claim not valid
        If a bank determines that a substitute check subject to the
      consumer's claim was in fact properly charged to the consumer's
      account, the bank shall send to the consumer, no later than the
      business day following the business day on which the bank makes a
      determination - 
          (A) the original check or a copy of the original check
        (including an image or a substitute check) that - 
            (i) accurately represents all of the information on the
          front and back of the original check (as of the time the
          original check was truncated); or
            (ii) is otherwise sufficient to determine whether or not
          the consumer's claim is valid; and

          (B) an explanation of the basis for the determination by the
        bank that the substitute check was properly charged, including
        a statement that the consumer may request copies of any
        information or documents on which the bank relied in making the
        determination.
      (2) Notice of recredit
        If a bank recredits a consumer account under subsection (c),
      the bank shall send to the consumer, no later than the business
      day following the business day on which the bank makes the
      recredit, a notice of - 
          (A) the amount of the recredit; and
          (B) the date the recredited funds will be available for
        withdrawal.
      (3) Notice of reversal of recredit
        In addition to the notice required under paragraph (1), if a
      bank reverses a recredited amount under subsection (e), the bank
      shall send to the consumer, no later than the business day
      following the business day on which the bank reverses the
      recredit, a notice of - 
          (A) the amount of the reversal; and
          (B) the date the recredit was reversed.
      (4) Mode of delivery
        A notice described in this subsection shall be delivered by
      United States mail or by any other means through which the
      consumer has agreed to receive account information.
    (g) Other claims not affected
      Providing a recredit in accordance with this section shall not
    absolve the bank from liability for a claim made under any other
    law, such as a claim for wrongful dishonor under the Uniform
    Commercial Code, or from liability for additional damages under
    section 5005 or 5009 of this title.
    (h) Clarification concerning consumer possession
      A consumer who was provided a substitute check may make a claim
    for an expedited recredit under this section with regard to a
    transaction involving the substitute check whether or not the
    consumer is in possession of the substitute check.
    (i) Scope of application
      This section shall only apply to customers who are consumers.

-SOURCE-
    (Pub. L. 108-100, Sec. 7, Oct. 28, 2003, 117 Stat. 1182.)

-End-



-CITE-
    12 USC Sec. 5007                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5007. Expedited recredit procedures for banks

-STATUTE-
    (a) Recredit claims
      (1) In general
        A bank may make a claim against an indemnifying bank for
      expedited recredit for which that bank is indemnified if - 
          (A) the claimant bank (or a bank that the claimant bank has
        indemnified) has received a claim for expedited recredit from a
        consumer under section 5006 of this title with respect to a
        substitute check or would have been subject to such a claim had
        the consumer's account been charged;
          (B) the claimant bank has suffered a resulting loss or is
        obligated to recredit a consumer account under section 5006 of
        this title with respect to such substitute check; and
          (C) production of the original check, another substitute
        check, or a better copy of the original check is necessary to
        determine the validity of the charge to the customer account or
        any warranty claim connected with such substitute check.
      (2) 120-day period
        Any claim under paragraph (1) may be submitted by the claimant
      bank to an indemnifying bank before the end of the 120-day period
      beginning on the date of the transaction that gave rise to the
      claim.
    (b) Procedures for claims
      (1) In general
        To make a claim under subsection (a) for an expedited recredit
      relating to a substitute check, the claimant bank shall send to
      the indemnifying bank - 
          (A) a description of - 
            (i) the claim, including an explanation of why the
          substitute check cannot be properly charged to the consumer
          account; or
            (ii) the warranty claim;

          (B) a statement that the claimant bank has suffered a loss or
        is obligated to recredit the consumer's account under section
        5006 of this title, together with an estimate of the amount of
        the loss or recredit;
          (C) the reason why production of the original check, another
        substitute check, or a better copy of the original check is
        necessary to determine the validity of the charge to the
        consumer account or the warranty claim; and
          (D) information sufficient for the indemnifying bank to
        identify the substitute check and to investigate the claim.
      (2) Requirements relating to copies of substitute checks
        If the information submitted by a claimant bank pursuant to
      paragraph (1) in connection with a claim for an expedited
      recredit includes a copy of any substitute check for which any
      such claim is made, the claimant bank shall take reasonable steps
      to ensure that any such copy cannot be - 
          (A) mistaken for the legal equivalent of the check under
        section 5003(b) of this title; or
          (B) sent or handled by any bank, including the indemnifying
        bank, as a forward collection or returned check.
      (3) Claim in writing
        (A) In general
          An indemnifying bank may, in the discretion of the bank,
        require the claimant bank to submit the information required by
        paragraph (1) in writing, including a copy of the written or
        electronically submitted claim, if any, that the consumer
        provided in accordance with section 5006(b) of this title.
        (B) Means of submission
          An indemnifying bank that requires a submission of
        information under subparagraph (A) may permit the claimant bank
        to make the submission electronically, if the claimant bank has
        agreed to communicate with the indemnifying bank in that
        manner.
    (c) Recredit by indemnifying bank
      (1) Prompt action required
        No later than 10 business days after the business day on which
      an indemnifying bank receives a claim under subsection (a) from a
      claimant bank with respect to a substitute check, the
      indemnifying bank shall - 
          (A) provide, to the claimant bank, the original check (with
        respect to such substitute check) or a copy of the original
        check (including an image or a substitute check) that - 
            (i) accurately represents all of the information on the
          front and back of the original check (as of the time the
          original check was truncated); or
            (ii) is otherwise sufficient to determine the bank's claim
          is not valid; and

          (B) recredit the claimant bank for the amount of the claim up
        to the amount of the substitute check, plus interest if
        applicable; or
          (C) provide information to the claimant bank as to why the
        indemnifying bank is not obligated to comply with subparagraph
        (A) or (B).
      (2) Recredit does not abrogate other liabilities
        Providing a recredit under this subsection to a claimant bank
      with respect to a substitute check shall not absolve the
      indemnifying bank from liability for claims brought under any
      other law or from additional damages under section 5005 or 5009
      of this title with respect to such check.
      (3) Refund to indemnifying bank
        If a claimant bank reverses, in accordance with section 5006(e)
      of this title, a recredit previously made to a consumer account
      under section 5006(c) of this title, or otherwise receives a
      credit or recredit with regard to such substitute check, the
      claimant bank shall promptly refund to any indemnifying bank any
      amount previously advanced by the indemnifying bank in connection
      with such substitute check.
    (d) Production of original check or a sufficient copy governed by
      section 5005(d)
      If the indemnifying bank provides the claimant bank with the
    original check or a copy of the original check (including an image
    or a substitute check) under subsection (c)(1)(A), section 5005(d)
    of this title shall govern any right of the indemnifying bank to
    any repayment of any funds the indemnifying bank has recredited to
    the claimant bank pursuant to subsection (c).

-SOURCE-
    (Pub. L. 108-100, Sec. 8, Oct. 28, 2003, 117 Stat. 1186.)

-End-



-CITE-
    12 USC Sec. 5008                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5008. Delays in an emergency

-STATUTE-
      A delay by a bank beyond the time limits prescribed or permitted
    by this chapter shall be excused if the delay is caused by
    interruption of communication or computer facilities, suspension of
    payments by another bank, war, emergency conditions, failure of
    equipment, or other circumstances beyond the control of a bank and
    if the bank uses such diligence as the circumstances require.

-SOURCE-
    (Pub. L. 108-100, Sec. 9, Oct. 28, 2003, 117 Stat. 1188.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in text, was in the original "this
    Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177, which
    is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5009                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5009. Measure of damages

-STATUTE-
    (a) Liability
      (1) In general
        Except as provided in section 5005 of this title, any person
      who, in connection with a substitute check, breaches any warranty
      under this chapter or fails to comply with any requirement
      imposed by, or regulation prescribed pursuant to, this chapter
      with respect to any other person shall be liable to such person
      in an amount equal to the sum of - 
          (A) the lesser of - 
            (i) the amount of the loss suffered by the other person as
          a result of the breach or failure; or
            (ii) the amount of the substitute check; and

          (B) interest and expenses (including costs and reasonable
        attorney's fees and other expenses of representation) related
        to the substitute check.
      (2) Offset of recredits
        The amount of damages any person receives under paragraph (1),
      if any, shall be reduced by the amount, if any, that the claimant
      receives and retains as a recredit under section 5006 or 5007 of
      this title.
    (b) Comparative negligence
      (1) In general
        If a person incurs damages that resulted in whole or in part
      from the negligence or failure of that person to act in good
      faith, then the amount of any liability due to that person under
      subsection (a) shall be reduced in proportion to the amount of
      negligence or bad faith attributable to that person.
      (2) Rule of construction
        Nothing in this subsection reduces the rights of a consumer or
      any other person under the Uniform Commercial Code or other
      applicable provision of Federal or State law.

-SOURCE-
    (Pub. L. 108-100, Sec. 10, Oct. 28, 2003, 117 Stat. 1188.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (a)(1), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5010                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5010. Statute of limitations and notice of claim

-STATUTE-
    (a) Actions under this chapter
      (1) In general
        An action to enforce a claim under this chapter may be brought
      in any United States district court, or in any other court of
      competent jurisdiction, before the end of the 1-year period
      beginning on the date the cause of action accrues.
      (2) Accrual
        A cause of action accrues as of the date the injured party
      first learns, or by which such person reasonably should have
      learned, of the facts and circumstances giving rise to the cause
      of action.
    (b) Discharge of claims
      Except as provided in subsection (c), unless a person gives
    notice of a claim to the indemnifying or warranting bank within 30
    days after the person has reason to know of the claim and the
    identity of the indemnifying or warranting bank, the indemnifying
    or warranting bank is discharged from liability in an action to
    enforce a claim under this chapter to the extent of any loss caused
    by the delay in giving notice of the claim.
    (c) Notice of claim by consumer
      A timely claim by a consumer under section 5006 of this title for
    expedited recredit constitutes timely notice of a claim by the
    consumer for purposes of subsection (b).

-SOURCE-
    (Pub. L. 108-100, Sec. 11, Oct. 28, 2003, 117 Stat. 1188.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsecs. (a)(1), (b), was in the
    original "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117
    Stat. 1177, which is classified generally to this chapter. For
    complete classification of this Act to the Code, see Short Title
    note set out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5011                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5011. Consumer awareness

-STATUTE-
    (a) In general
      Each bank shall provide, in accordance with subsection (b), a
    brief notice about substitute checks that describes - 
        (1) how a substitute check is the legal equivalent of an
      original check for all purposes, including any provision of any
      Federal or State law, and for all persons, if the substitute
      check - 
          (A) accurately represents all of the information on the front
        and back of the original check as of the time at which the
        original check was truncated; and
          (B) bears the legend: "This is a legal copy of your check.
        You can use it in the same way you would use the original
        check."; and

        (2) the consumer recredit rights established under section 5006
      of this title when a consumer believes in good faith that a
      substitute check was not properly charged to the account of the
      consumer.
    (b) Distribution
      (1) Existing customers
        With respect to consumers who are customers of a bank on the
      effective date of this chapter and who receive original checks or
      substitute checks, a bank shall provide the notice described in
      subsection (a) to each such consumer no later than the first
      regularly scheduled communication with the consumer after the
      effective date of this chapter.
      (2) New account holders
        A bank shall provide the notice described in subsection (a) to
      each consumer who will receive original checks or substitute
      checks, other than existing customers referred to in paragraph
      (1), at the time at which the customer relationship is initiated.
      (3) Mode of delivery
        A bank may send the notices required by this subsection by
      United States mail or by any other means through which the
      consumer has agreed to receive account information.
      (4) Consumers who request copies of checks
        Notice shall be provided to each consumer of the bank that
      requests a copy of a check and receives a substitute check, at
      the time of the request.
    (c) Model language
      (1) In general
        Before the end of the 9-month period beginning on October 28,
      2003, the Board shall publish model forms and clauses that a bank
      may use to describe each of the elements required by subsection
      (a).
      (2) Safe harbor
        (A) In general
          A bank shall be treated as being in compliance with the
        requirements of subsection (a) if the bank's substitute check
        notice uses a model form or clause published by the Board and
        such model form or clause accurately describes the bank's
        policies and practices.
        (B) Deletion or rearrangement
          A bank may delete any information in the model form or clause
        that is not required by this chapter or rearrange the format.
      (3) Use of model language not required
        This section shall not be construed as requiring any bank to
      use a model form or clause that the Board prepares under this
      subsection.

-SOURCE-
    (Pub. L. 108-100, Sec. 12, Oct. 28, 2003, 117 Stat. 1189.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      The effective date of this chapter, referred to in subsec.
    (b)(1), is at the end of the 12-month period beginning on Oct. 28,
    2003, except as otherwise specifically provided in this chapter,
    see section 20 of Pub. L. 108-100, set out as an Effective Date
    note under section 5001 of this title.
      This chapter, referred to in subsec. (c)(2)(B), was in the
    original "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117
    Stat. 1177, which is classified generally to this chapter. For
    complete classification of this Act to the Code, see Short Title
    note set out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5012                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5012. Effect on other law

-STATUTE-
      This chapter shall supersede any provision of Federal or State
    law, including the Uniform Commercial Code, that is inconsistent
    with this chapter, but only to the extent of the inconsistency.

-SOURCE-
    (Pub. L. 108-100, Sec. 13, Oct. 28, 2003, 117 Stat. 1190.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in text, was in the original "this
    Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177, which
    is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5013                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5013. Variation by agreement

-STATUTE-
    (a) Section 5007
      Any provision of section 5007 of this title may be varied by
    agreement of the banks involved.
    (b) No other provisions may be varied
      Except as provided in subsection (a), no provision of this
    chapter may be varied by agreement of any person or persons.

-SOURCE-
    (Pub. L. 108-100, Sec. 14, Oct. 28, 2003, 117 Stat. 1190.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (b), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5014                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5014. Regulations

-STATUTE-
      The Board may prescribe such regulations as the Board determines
    to be necessary to implement, prevent circumvention or evasion of,
    or facilitate compliance with the provisions of this chapter.

-SOURCE-
    (Pub. L. 108-100, Sec. 15, Oct. 28, 2003, 117 Stat. 1190.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in text, was in the original "this
    Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177, which
    is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5015                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5015. Study and report on funds availability

-STATUTE-
    (a) Study
      In order to evaluate the implementation and the impact of this
    chapter, the Board shall conduct a study of - 
        (1) the percentage of total checks cleared in which the paper
      check is not returned to the paying bank;
        (2) the extent to which banks make funds available to consumers
      for local and nonlocal checks prior to the expiration of maximum
      hold periods;
        (3) the length of time within which depositary banks learn of
      the nonpayment of local and nonlocal checks;
        (4) the increase or decrease in check-related losses over the
      study period; and
        (5) the appropriateness of the time periods and amount limits
      applicable under sections 4002 and 4003 of this title, as in
      effect on October 28, 2003.
    (b) Report to Congress
      Before the end of the 30-month period beginning on the effective
    date of this chapter, the Board shall submit a report to the
    Congress containing the results of the study conducted under this
    section, together with recommendations for legislative action.

-SOURCE-
    (Pub. L. 108-100, Sec. 16, Oct. 28, 2003, 117 Stat. 1190.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (a), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.
      The effective date of this chapter, referred to in subsec. (b),
    is at the end of the 12-month period beginning on Oct. 28, 2003,
    except as otherwise specifically provided in this chapter, see
    section 20 of Pub. L. 108-100, set out as an Effective Date note
    under section 5001 of this title.

-End-



-CITE-
    12 USC Sec. 5016                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5016. Statistical reporting of costs and revenues for
      transporting checks between reserve banks

-STATUTE-
      In the annual report prepared by the Board for the first full
    calendar year after October 28, 2003, and in each of the 9
    subsequent annual reports by the Board, the Board shall include the
    amount of operating costs attributable to, and an estimate of the
    Federal Reserve banks' imputed revenues derived from, the
    transportation of commercial checks between Federal Reserve bank
    check processing centers.

-SOURCE-
    (Pub. L. 108-100, Sec. 17, Oct. 28, 2003, 117 Stat. 1191.)

-End-



-CITE-
    12 USC Sec. 5017                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5017. Evaluation and report by the Comptroller General

-STATUTE-
    (a) Study
      During the 5-year period beginning on October 28, 2003, the
    Comptroller General of the United States shall evaluate the
    implementation and administration of this chapter, including - 
        (1) an estimate of the gains in economic efficiency made
      possible from check truncation;
        (2) an evaluation of the benefits accruing to consumers and
      financial institutions from reduced transportation costs, longer
      hours for accepting deposits for credit within 1 business day,
      the impact of fraud losses, and an estimate of consumers' share
      of the total benefits derived from this chapter; and
        (3) an assessment of consumer acceptance of the check
      truncation process resulting from this chapter, as well as any
      new costs incurred by consumers who had their original checks
      returned with their regular monthly statements prior to October
      28, 2003.
    (b) Report to Congress
      Before the end of the 5-year period referred to in subsection
    (a), the Comptroller General shall submit a report to the Congress
    containing the findings and conclusions of the Comptroller General
    in connection with the evaluation conducted pursuant to subsection
    (a), together with such recommendations for legislative and
    administrative action as the Comptroller General may determine to
    be appropriate.

-SOURCE-
    (Pub. L. 108-100, Sec. 18, Oct. 28, 2003, 117 Stat. 1191.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      This chapter, referred to in subsec. (a), was in the original
    "this Act", meaning Pub. L. 108-100, Oct. 28, 2003, 117 Stat. 1177,
    which is classified generally to this chapter. For complete
    classification of this Act to the Code, see Short Title note set
    out under section 5001 of this title and Tables.

-End-



-CITE-
    12 USC Sec. 5018                                            01/03/2007

-EXPCITE-
    TITLE 12 - BANKS AND BANKING
    CHAPTER 50 - CHECK TRUNCATION

-HEAD-
    Sec. 5018. Depositary services efficiency and cost reduction

-STATUTE-
    (a) Findings
      The Congress finds as follows:
        (1) The Secretary of the Treasury has long compensated
      financial institutions for various critical depositary and
      financial agency services provided for or on behalf of the United
      States by - 
          (A) placing large balances, commonly referred to as
        "compensating balances", on deposit at such institutions; and
          (B) using imputed interest on such funds to offset charges
        for the various depositary and financial agency services
        provided to or on behalf of the Government.

        (2) As a result of sharp declines in interest rates over the
      last few years to record low levels, or the public debt
      outstanding reaching the statutory debt limit, the Department of
      the Treasury often has had to dramatically increase or decrease
      the size of the compensating balances on deposit at these
      financial institutions.
        (3) The fluctuation of the compensating balances, and the
      necessary pledging of collateral by financial institutions to
      secure the value of compensating balances placed with those
      institutions, have created unintended financial uncertainty for
      the Secretary of the Treasury and for the management by financial
      institutions of their cash and securities.
        (4) It is imperative that the process for providing financial
      services to the Government be transparent, and provide the
      information necessary for the Congress to effectively exercise
      its appropriation and oversight responsibilities.
        (5) The use of direct payment for services rendered would
      strengthen cash and debt management responsibilities of the
      Secretary of the Treasury because the Secretary would no longer
      need to dramatically increase or decrease the level of such
      balances when interest rates fluctuate sharply or when the public
      debt outstanding reaches the statutory debt limit.
        (6) An alternative to the use of compensating balances, such as
      direct payments to financial institutions, would ensure that
      payments to financial institutions for the services they provide
      would be made in a more predictable manner and could result in
      cost savings.
        (7) Limiting the use of compensating balances could result in a
      more direct and cost-efficient method of obtaining those services
      currently provided under compensating balance arrangements.
        (8) A transition from the use of compensating balances to
      another compensation method must be carefully managed to prevent
      higher-than-necessary transitional costs and enable participating
      financial institutions to modify their planned investment of cash
      and securities.
    (b) Authorization of appropriations for services rendered by
      depositaries and financial agencies of the United States
      There are authorized to be appropriated for fiscal years
    beginning after fiscal year 2003 to the Secretary of the Treasury
    such sums as may be necessary for reimbursing financial
    institutions in their capacity as depositaries and financial agents
    of the United States for all services required or directed by the
    Secretary of the Treasury, or a designee of the Secretary, to be
    performed by such financial institutions on behalf of the Secretary
    of the Treasury or another Federal agency, including services
    rendered before fiscal year 2004.
    (c) Orderly transition
      (1) In general
        As appropriations authorized in subsection (b) become
      available, the Secretary of the Treasury shall promptly begin the
      process of phasing in the use of the appropriations to pay
      financial institutions serving as depositaries and financial
      agents of the United States, and transitioning from the use of
      compensating balances to fund these services.
      (2) Post-transition use limited to extraordinary circumstances
        (A) In general
          Following the transition to the use of the appropriations
        authorized in subsection (b), the Secretary of the Treasury may
        use the compensating balances to pay financial institutions
        serving as depositaries and financial agents of the United
        States only in extraordinary situations where the Secretary
        determines that they are needed to ensure the fiscal operations
        of the Government continue to function in an efficient and
        effective manner.
        (B) Report
          Any use of compensating balances pursuant to subparagraph (A)
        shall promptly be reported by the Secretary of the Treasury to
        the Committee on Financial Services of the House of
        Representatives and the Committee on Banking, Housing, and
        Urban Affairs of the Senate.
      (3) Requirements for orderly transition
        In transitioning to the use of the appropriations authorized in
      subsection (b), the Secretary of the Treasury shall take such
      steps as may be appropriate to - 
          (A) prevent abrupt financial disruption to the functions of
        the Department of the Treasury or to the participating
        financial institutions; and
          (B) maintain adequate accounting and management controls to
        ensure that payments to financial institutions for their
        banking services provided to the Government as depositaries and
        financial agents are accurate and that the arrangements last no
        longer than is necessary.
      (4) Reports required
        (A) Annual report
          (i) In general
            For each fiscal year, the Secretary of the Treasury shall
          submit a report to the Congress on the use of compensating
          balances and on the use of appropriations authorized in
          subsection (b) during that fiscal year.
          (ii) Inclusion in budget
            The report required under clause (i) may be submitted as
          part of the budget submitted by the President under section
          1105 of title 31 for the following fiscal year and if so, the
          report shall be submitted concurrently to the Committee on
          Financial Services of the House of Representatives and the
          Committee on Banking, Housing, and Urban Affairs of the
          Senate.
        (B) Final report following transition
          (i) In general
            Following completion of the transition from the use of
          compensating balances to the use of the appropriations
          authorized in subsection (b) to pay financial institutions
          for their services as depositaries and financial agents of
          the United States, the Secretary of the Treasury shall submit
          a report on the transition to the Committee on Financial
          Services of the House of Representatives and the Committee on
          Banking, Housing, and Urban Affairs of the Senate.
          (ii) Contents of report
            The report submitted under clause (i) shall include a
          detailed analysis of - 
              (I) the cost of transition;
              (II) the direct costs of the services being paid from the
            appropriations authorized in subsection (b); and
              (III) the benefits realized from the use of direct
            payment for such services, rather than the use of
            compensating balance arrangements.
    (d) Omitted
    (e) Effective date
      Notwithstanding section 20,(!1) this section shall take effect on
    October 28, 2003.


-SOURCE-
    (Pub. L. 108-100, Sec. 19, Oct. 28, 2003, 117 Stat. 1191.)

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 20, referred to in subsec. (e), means section 20 of Pub.
    L. 108-100, which is set out as an Effective Date note under
    section 5001 of this title.

-COD-
                               CODIFICATION                           
      Section is comprised of section 19 of Pub. L. 108-100. Subsec.
    (d) of section 19 of Pub. L. 108-100 amended section 412 of this
    title.


-MISC1-
        FUNDS FOR REIMBURSEMENT FOR DEPOSITARY AND FINANCIAL AGENCY
                                 SERVICES
      Pub. L. 108-199, div. F, title II, Sec. 218, Jan. 23, 2004, 118
    Stat. 321, provided that: "For fiscal year 2004 and each fiscal
    year thereafter, there are appropriated to the Secretary of the
    Treasury such sums as may be necessary to reimburse financial
    institutions in their capacity as depositaries and financial agents
    of the United States for all services required or directed by the
    Secretary of the Treasury, or the Secretary's designee, to be
    performed by such financial institutions on behalf of the
    Department of the Treasury or other Federal agencies, including
    services rendered prior to fiscal year 2004."

-FOOTNOTE-
    (!1) See References in Text note below.


-End-