74884 Federal Register / Vol. 88, No. 210 / Wednesday, November 1, 2023 / Rules and Regulations 

1 ‘‘Authenticity’’ is a presentment guaranty, as 

described by 31 CFR 240.4. 

2 ‘‘Validity’’ and ‘‘valid check’’ are defined in the 

final rule. See section III.B., below. 

Public Reference Room at 

public.referenceroom@ferc.gov. 

VII. Effective Date and Congressional 

Notification 

25. These regulations are effective 

February 1, 2024. The Commission has 

determined, with the concurrence of the 

Administrator of the Office of 

Information and Regulatory Affairs of 

OMB, that this rule is not a ‘‘major rule’’ 

as defined in section 351 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. 

By the Commission. 

Issued October 26, 2023. 

Debbie-Anne A. Reese, 

Deputy Secretary. 

[FR Doc. 2023–24095 Filed 10–31–23; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF THE TREASURY 

Bureau of the Fiscal Service 

31 CFR Part 240 

RIN 1530–AA22 

Indorsement and Payment of Checks 

Drawn on the United States Treasury 

AGENCY: Bureau of the Fiscal Service, 

Treasury. 

ACTION: Final rule. 

SUMMARY: The Bureau of the Fiscal 

Service (Fiscal Service) of the 

Department of the Treasury (Treasury) is 

amending its regulations that govern the 

payment of checks drawn on the United 

States Treasury (Treasury checks). The 

amendments coincide with the 

development of Fiscal Service’s 

enhanced check post payment 

processing system, which will provide 

Treasury check return information to 

financial institutions more quickly than 

today. Financial institutions will receive 

this information through their existing 

communication channels with the 

Federal Reserve Banks (FRBs), generally 

prior to the expiration of the time 

periods in which financial institutions 

must make Treasury check deposits 

available for withdrawal as prescribed 

by Regulation CC, Availability of Funds 

and Collection of Checks. Accordingly, 

Fiscal Service is amending its 

regulations so that, with certain 

exceptions, a financial institution will 

be liable if it pays a canceled Treasury 

check, also known as a payment over 

cancellation (POC), without waiting to 

receive the return information that 

would enable the financial institution to 

know the check has been canceled. 

DATES: Effective December 1, 2023. 

FOR FURTHER INFORMATION CONTACT: Gary 

Swasey, Director, Post Payment Division 

at (215) 816–8230 or gary.swasey@

fiscal.treasury.gov; or Thomas Kearns, 

Senior Counsel, at (202) 874–6680 or 

thomas.kearns@fiscal.treasury.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Currently, when either Fiscal Service 

or a payment certifying agency puts a 

‘‘stop payment’’ (also known as a 

‘‘check stop’’) on a Treasury check to 

cancel it, there is a possibility that the 

canceled check may still be paid. Fiscal 

Service or an agency may put a ‘‘stop 

payment’’ on a check payment because 

the payee submitted a check claim (i.e., 

claimed that the check was either lost or 

stolen), because the certifying agency 

realized the payment was incorrect, or 

because it was otherwise improper. 

When a canceled or ‘‘stopped’’ check is 

subsequently paid, this leads to what is 

known as a payment over cancellation 

(POC). POCs are improper payments, 

which can amount to $100 million or 

more each year. 

Fiscal Service is developing 

enhancements to its post payment 

processing system that will result in 

Treasury check return information being 

made available to financial institutions 

sooner than is the case today. With 

Fiscal Service’s current post payment 

processing system, several days often 

pass before Fiscal Service can provide 

information on Treasury check returns 

that the Federal Reserve Banks (FRBs) 

transmit to financial institutions 

through existing communication 

channels. The system enhancements 

will enable Fiscal Service to provide 

check return information to financial 

institutions through these existing 

channels within the time periods 

prescribed by Regulation CC, 

Availability of Funds and Collection of 

Checks (12 CFR part 229), for when a 

financial institution must make funds 

deposited by Treasury check available 

for withdrawal. 

Under the current regulations at 31 

CFR part 240, a financial institution 

generally is not liable for a POC if the 

institution has taken ‘‘reasonable 

efforts’’ to ensure the check is 

authentic.1 The final rule amends the 

definition of ‘‘reasonable efforts’’ found 

at 31 CFR 240.2 to include a 

requirement that financial institutions 

wait for check return information within 

the time periods set out by Regulation 

CC to help verify that a Treasury check 

is valid 2 and authentic. It is also making 

conforming changes to 31 CFR part 240 

to require that financial institutions 

ensure a Treasury check has not been 

canceled before making the funds 

associated with that check available for 

withdrawal. 

In those instances where a financial 

institution has taken reasonable efforts 

but check return information for a POC 

on a properly presented check is not 

transmitted to the financial institution 

prior the funds availability timeframe 

specified in Regulation CC, the financial 

institution would not be liable for 

releasing the funds associated with the 

Treasury check. While Fiscal Service 

expects this circumstance to be 

uncommon, it understands that 

compliance with Regulation CC requires 

the release of the funds within certain 

timeframes, and thus under the final 

rule a financial institution will not be 

liable for a POC due to complying with 

Regulation CC. (Note, however, that this 

does not affect the presentment 

guarantees found in 31 CFR 240.4. As is 

currently the case, if Fiscal Service 

declines a check due to improper 

presentment and reverses the 

provisional credit, the presenting 

financial institution may still be liable 

for payment on the check regardless of 

Regulation CC’s requirements.) 

After enhancements to Treasury’s post 

payment processing system have been 

implemented and the final rule’s 

requirements become effective (no 

sooner than 30 days after publication of 

the final rule), the system and rule 

changes should greatly reduce payment 

issues involving Treasury checks and 

more closely align the treatment of 

canceled Treasury checks with industry 

practices for other canceled checks in 

the banking system. The changes will 

eliminate many POCs, because they will 

allow a certifying agency to place a 

‘‘true stop’’ on a Treasury check. The 

system changes will also help reduce 

instances where a Treasury check (or an 

item purporting to be a Treasury check) 

may be charged back to the financial 

institution, because they will allow the 

financial institution to verify that the 

check is not counterfeit, that the amount 

has not been altered, that the check is 

not stale-dated, and that the check has 

not been previously negotiated. For 

these non-POC circumstances, financial 

institutions are already liable for 

accepting such instruments. While the 

final rule does not impact a financial 

institution’s liability in these other 

circumstances, Fiscal Service’s 

enhanced post payment processing 


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Federal Register / Vol. 88, No. 210 / Wednesday, November 1, 2023 / Rules and Regulations 74885 

system will help financial institutions 

avoid the liability. Furthermore, in 

those instances where a financial 

institution does release the funds 

associated with a Treasury check prior 

to receiving the check return 

information, that financial institution 

has an increased likelihood of being 

able to recover those funds, because the 

return information will be available a 

short time after the funds are released 

(typically no more than a few days, as 

opposed to up to 18 months later if a 

reclamation following a check claim 

were to occur). 

In addition to receiving check return 

information through existing channels, a 

financial institution may choose to 

obtain early notice regarding the 

validity and authenticity of Treasury 

checks by using the Fiscal Service’s 

Treasury Check Verification System 

(TCVS). While financial institutions will 

not be required to use TCVS, the use of 

TCVS may allow financial institutions 

to catch canceled, duplicate, or other 

problematic checks at the time of 

presentment, as opposed to after 

presentment but before the financial 

institution makes deposited funds 

available for withdrawal. TCVS, in 

conjunction with the enhanced post 

payment system, will help financial 

institutions avoid accepting duplicate 

presentations, thus avoiding the 

associated liability. The enhancements 

to Treasury’s post payment processing 

system will not eliminate acceptance of 

duplicate presentations entirely, but in 

those instances where the subsequent 

presentation of a Treasury check occurs 

after Treasury’s records have been 

updated, TCVS will allow a financial 

institution to avoid liability by 

declining the previously negotiated 

Treasury check when presented again. 

TCVS will similarly be of assistance to 

financial institutions in identifying 

Treasury checks where the payment 

amount has been altered, as well as for 

counterfeit instruments purporting to be 

Treasury checks. 

II. Response to Comments 

During the comment period, Fiscal 

Service received nine comments on the 

notice of proposed rulemaking (NPRM) 

that was published on February 1, 2023 

(88 FR 6674), from individuals and from 

the banking industry. The industry 

commenters supported Fiscal Service’s 

effort to combat check fraud and to 

reduce POCs. However, some 

commenters also expressed concerns 

with aspects of the NPRM. As many of 

these comments addressed the same or 

similar issues, below we respond to 

these comments in the following 

categories: 

• Required Use of TCVS, 

• Financial Institution Liability for 

POCs, 

• Presentment to Non-Financial 

Institutions, 

• Communicate Check Cancellation 

Information to Federal Reserve Banks, 

and 

• Reduce the Number of Treasury 

Checks. 

A. Required Use of TCVS 

A majority of the comments expressed 

concerns over the proposed requirement 

to use TCVS to verify that a Treasury 

check has not been canceled for a 

financial institution to avoid liability for 

a POC. Issues raised related to the 

required use of TCVS included: 

concerns regarding what would happen 

if TCVS is out of service when a 

financial institution attempts to verify a 

Treasury check; the amount of time 

required for tellers to manually verify a 

Treasury check using TCVS; 

unavailability of TCVS when Treasury 

checks are deposited remotely or by 

ATM; and the expense and time for 

financial institutions to implement 

technological upgrades or alterations of 

their systems to integrate the use of 

TCVS. 

The final rule addresses these 

concerns by removing the requirement 

that a financial institution use TCVS to 

verify that a Treasury check has not 

been canceled to avoid liability for a 

POC. Instead, to avoid liability for a 

POC, and in alignment with comments 

received, the final rule allows a 

financial institution to rely on the check 

return information that it already 

receives through the FRBs’ established 

channels of communication. Fiscal 

Service’s enhanced post payment 

processing system will enable the FRBs 

to provide check return information on 

a properly presented Treasury check to 

the financial institution within the 

timeframes prescribed by Regulation CC 

for making funds from a deposited 

Treasury check available for 

withdrawal. The financial institution 

will not be required to make changes to 

its check processing system to receive 

the check return information from the 

FRBs because the information will move 

through existing communication 

channels. 

Although the use of TCVS is not 

required under the final rule, TCVS will 

still be available for financial 

institutions to voluntarily obtain 

information regarding the status of a 

Treasury check. In addition to giving 

financial institutions early notice of 

check cancellation information, TCVS 

may assist financial institutions in 

reducing the risk of liability for 

counterfeit instruments and duplicate 

presentations of Treasury checks. 

B. Financial Institution Liability for 

POCs 

Several commenters expressed 

concern over the shift in liability to 

financial institutions for POCs on 

Treasury checks. Some of these 

concerns were tied to issues arising 

from the requirement to use TCVS to 

avoid liability and, thus, have been 

resolved because the final rule does not 

contain such a requirement (see 

preceding section 2.A.). The approach 

under the final rule to avoid liability for 

a POC on a Treasury check instead 

relies on the FRBs’ existing channels of 

communication for check return 

information. The onus is on Fiscal 

Service’s post payment processing 

system to provide the check return 

information to the FRBs in an 

accelerated fashion, so that financial 

institutions may receive this 

information from the FRBs within the 

timeframes prescribed by Regulation CC 

for making funds deposited by Treasury 

check available for withdrawal. 

However, other commenters 

expressed concerns regarding the shift 

in liability for POCs that were not 

related to the use of TCVS. Fiscal 

Service believes that because (1) the 

enhanced post payment system will 

make check return information available 

on an accelerated basis compared to 

today, and (2) financial institutions will 

receive information confirming that a 

Treasury check has been canceled 

through existing communication 

channels, it is not unreasonable for 

financial institutions to accept liability 

for POCs. Further, this shift in liability 

will bring the processing of Treasury 

checks more in alignment with the 

processing of checks generally, where 

the liability for releasing funds on a 

canceled non-Treasury check falls on 

the financial institution accepting the 

check. A financial institution may avoid 

this liability by not making the funds 

associated with a Treasury check 

available for withdrawal until the 

financial institution receives the check 

return information from an FRB, 

provided that it receives notice of a POC 

prior to the expiration of the Regulation 

CC funds availability time periods. 

Additionally, in those instances where 

the return information is unavailable for 

the financial institution to verify the 

status of a properly presented Treasury 

check before the financial institution is 

required to release the funds under 

Regulation CC, the financial institution 

will not be liable if the release of funds 

necessary to comply with Regulation CC 

results in a POC. 


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C. Presentment to Non-Financial 

Institutions 

A few commenters raised the issue of 

how the proposed rule and its shift in 

liability for POCs would operate in 

conjunction with Treasury checks 

presented to businesses that cash checks 

that are not financial institutions, and 

the financial institutions that service 

them. One commenter pointed out that 

the NPRM did not address whether the 

agreements between these businesses 

and financial institutions could 

continue to address how the liability for 

POCs would be assigned. The final rule 

is silent on that issue and is not 

intended to alter the ability of entities 

entering into such agreements to assign 

liability for POCs or otherwise declined 

checks. To the extent that such 

assignment of liability is allowable by 

other applicable laws and rules, the 

final rule does not affect these entities’ 

ability to negotiate such agreements. 

However, such agreements will have no 

impact on financial institutions’ liability 

due to POCs on Treasury checks with 

regard to the Federal Government, as 

described by the final rule. 

To the extent that commenters 

identified concerns with the 

unavailability of TCVS in situations 

where businesses that are not financial 

institutions cash Treasury checks, the 

final rule addresses those concerns by 

removing the requirement to use TCVS 

to avoid liability for a POC on a 

Treasury check. 

D. Communicate Check Cancellation 

Information to Federal Reserve Banks 

A few commenters suggested that a 

better method for addressing POCs, 

rather than require the use of TCVS by 

financial institutions, would be to 

communicate the check cancellation 

information to the FRBs’ check 

processing system and have the system 

communicate this information to 

financial institutions with the FRBs’ 

check return information. These 

commenters pointed out this approach 

would not require financial institutions 

to modify their check processing 

systems to accommodate the required 

use of TCVS, would work with the 

financial institutions’ current systems, 

and would entail little or no cost to the 

financial institutions. 

Consistent with these comments, 

under the final rule, financial 

institutions will continue to receive 

check return information from the FRB 

check processing system’s existing 

channels of communication, as they 

currently do. The enhancements to 

Fiscal Service’s post payment 

processing system will enable Fiscal 

Service to communicate check 

information to the FRBs more quickly, 

including the information that a 

Treasury check has been canceled. 

Financial institutions do not need to 

make any changes to continue receiving 

this information from the FRB’s check 

processing system; the information will 

simply be available more rapidly 

through the channels already in use. 

Two commenters suggested that the 

FRBs should provide this check 

cancellation information to the financial 

institution of first deposit, rather than 

the presenting financial institution. This 

suggestion is out of scope and nonviable 

at this time because of the changes that 

would be required of the FRBs’ check 

processing system (and possibly of the 

financial institutions receiving the 

cancellation information). However, 

Fiscal Service is receptive to 

considering this possibility at a later 

date. In the meantime, although not 

required, financial institutions of first 

deposit can use TCVS to help reduce 

their risk of liability for POCs prior to 

receiving the check return information 

through existing communication 

channels. 

E. Reduce the Number of Treasury 

Checks 

One commenter pointed out that an 

effective method of reducing POCs is to 

reduce the number of Treasury checks 

issued in the first place and that Fiscal 

Service should educate payment-issuing 

agencies regarding the benefits of 

electronic payments. Fiscal Service 

agrees that reducing the number of 

checks issued for Federal payments is a 

worthy objective. Fiscal Service has 

long worked with Federal agencies to 

reduce the number of checks they issue 

and to make payments electronically. 

For more than a decade, the number of 

Treasury checks issued each year has 

generally declined, from approximately 

170 million in 2012, for example, to 

approximately 45 million in fiscal year 

2023. 

Despite the effort to reduce the 

number of Treasury checks issued, 

Treasury checks will continue to be 

issued for the foreseeable future 

(although in reduced numbers). 

Additionally, although 31 U.S.C. 3332 

requires most Federal payments to be 

made electronically, this provision does 

not apply to payments made pursuant to 

the Internal Revenue Code. Within these 

limitations, Fiscal Service fully supports 

and actively works to promote the 

continued decrease in the number of 

Treasury checks issued each year. 

III. Summary of Proposed Rule Changes 

A. Amendment to the Definition of, and 

Guarantee Regarding, ‘‘Reasonable 

Efforts’’ 

Part 240 currently includes a 

presentment guarantee, made by the 

guarantor of a check presented to 

Treasury for payment, that the guarantor 

has made all reasonable efforts to ensure 

that the check is an authentic Treasury 

check and not a counterfeit check. The 

existing definition of ‘‘reasonable 

efforts’’ focuses on the watermark or 

other security features of a security 

check, to ensure that the Treasury check 

is authentic and not counterfeit. The 

final rule amends the definition of 

‘‘reasonable efforts’’ to add the 

requirement of verifying not only the 

Treasury check’s authenticity, but also 

the check’s validity, by requiring a 

financial institution to receive the check 

return information before making funds 

from a Treasury check available for 

withdrawal to ensure that the check has 

not been canceled. An exception to this 

requirement will apply if the check’s 

return information is not transmitted to 

the financial institution prior the 

appropriate funds availability timeframe 

specified in Regulation CC, and the 

financial institution must make the 

funds available for withdrawal in order 

to remain in compliance with 

Regulation CC. In such cases, the 

financial institution would not be held 

liable for releasing the funds associated 

with the Treasury check if it results in 

a POC (unless the financial institution is 

otherwise subject to liability under the 

presentment guarantees found in 

§ 240.4). 

A corresponding amendment to the 

presentment guarantees found in 

current regulations would change the 

guarantee of Treasury check’s 

authenticity to include a presentment 

guarantee regarding the check’s validity 

as well, as described below. 

B. Adding a Definition of ‘‘Validity’’ 

Part 240 had not previously included 

a definition of ‘‘validity.’’ The final rule 

adds a definition of ‘‘validity’’ or ‘‘valid 

check’’ as proposed. 

The definition describes a valid 

Treasury check as a payable instrument 

(i.e., not a counterfeit check, as defined 

in the existing regulations) that has not 

been previously negotiated or canceled 

(i.e., meets the criteria for negotiability). 

A corresponding amendment to the 

presentment guarantees would add a 

new presentment guarantee regarding 

the check’s validity. 


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C. Adding a Definition of 

‘‘Cancellation’’ or ‘‘Canceled’’ 

Part 240 had not previously defined 

‘‘cancellation’’ or ‘‘canceled’’ with 

regard to a Treasury check. The final 

rule adds a definition of ‘‘cancellation’’ 

or ‘‘canceled’’ as proposed. 

This definition describes a canceled 

Treasury check as one that was once a 

valid and negotiable instrument, but is 

no longer due to a reason other than the 

Treasury check’s negotiation. A 

Treasury check may be canceled 

because it has limited payability (i.e., it 

is older than one year past its issuance 

date, and thus stale-dated), or because 

Treasury or the certifying agency has 

placed a ‘‘stop payment’’ (as defined 

below) on it. 

D. Adding a Definition of ‘‘Stop 

Payment’’ 

The regulations had not previously 

defined a ‘‘stop payment’’ with regard to 

a Treasury check. The final rule adds a 

definition of this term as proposed. 

This definition describes the situation 

where Treasury or the certifying agency 

has indicated in its systems that an 

authentic Treasury check should not be 

paid. Reasons for issuing a stop 

payment on a Treasury check include 

that the Treasury check has been 

reported lost or stolen, it has been 

issued to a deceased payee, or it was 

discovered to be improper. Once a stop 

payment has been placed on a Treasury 

check, the check has been canceled and 

is no longer a valid Treasury check 

(even though it is an authentic Treasury 

check). 

E. Amendment to the Processing of 

Checks, Declination, and the Reasons 

for Refusal 

Current Treasury regulations require 

that an FRB cash a Treasury check 

presented to it, except in certain 

circumstances where the FRB must 

instead refuse to pay the Treasury 

check. The check must be refused if (1) 

the check bears a material defect or 

alteration, (2) the check was presented 

more than one year later than the 

check’s date of issuance, or (3) the FRB 

has been notified by Treasury, pursuant 

to Treasury regulations, that a check 

was issued to a deceased payee. As 

proposed, the final rule adds a fourth 

circumstance in which an FRB must 

refuse to pay a Treasury check: when 

Treasury has notified the FRB that a 

Treasury check is not valid. 

As noted above, under this definition, 

a Treasury check is invalid if the 

Treasury check is counterfeit, 

previously negotiated, or canceled. 

A corresponding amendment to the 

regulation regarding Treasury’s right of 

first refusal is the instruction for 

Treasury to decline payment of a 

Treasury check when Treasury is being 

requested to make payment on a check 

that is not valid. 

IV. Section-by-Section Analysis 

A. Section 240.2—Definitions 

The final rule amends the definitions 

section of part 240, found at 31 CFR 

240.2, by removing the lettering within 

that section (the list letters (a), (b), (c), 

etc.), and simply listing the terms in 

alphabetical order within the section. 

This comports with the Office of the 

Federal Register’s recommendation for a 

list of definitions found in regulations, 

as stated in section 2–13 of the 

Document Drafting Handbook. This 

change also removes the need to reletter the list of definitions when new 

definitions are added to the list. 

For the reasons set forth above, the 

final rule amends § 240.2 to revise the 

definition of ‘‘reasonable efforts’’; add 

the definition of ‘‘cancellation’’ or 

‘‘canceled’’; add the definition of ‘‘stop 

payment’’ or ‘‘check stop’’ or ‘‘stop’’; 

and add the definition of ‘‘validity’’ or 

‘‘valid check.’’ Except for these four 

definitions, none of the definitions in 

§ 240.2 are being substantively changed. 

These other definitions are listed herein 

only to reflect the removal of the list 

lettering schema and a few minor 

changes made for clarity. 

B. Section 240.4—Presentment 

Guarantees 

The final rule amends the 

presentment guarantees to include a 

guarantee that the guarantor has made 

reasonable efforts to ensure that the 

check is an authentic Treasury check 

and that it is valid at the time of 

acceptance. 

C. Section 240.6—Provisional Credit; 

First Examination; Declination; Final 

Payment 

The final rule amends the reasons that 

Treasury will decline a Treasury check 

upon first examination to include the 

fact that the check has been canceled, in 

addition to when the check has already 

been paid. 

D. Section 240.12—Processing of Checks 

The final rule amends the reasons that 

an FRB must refuse payment of a 

Treasury check to include 

circumstances where the FRB has been 

notified that the Treasury check has 

been canceled or is otherwise not valid. 

V. Procedural Analysis 

Regulatory Planning and Review 

The rule does not meet the criteria for 

a ‘‘significant regulatory action’’ as 

defined in Executive Order 12866, as 

amended. Therefore, the regulatory 

review procedures contained therein do 

not apply. 

Regulatory Flexibility Act Analysis 

The Regulatory Flexibility Act, 5 

U.S.C. 601–612, requires that agencies 

review proposed and final rules for their 

potential economic impact on small 

entities, including small businesses, and 

identify alternatives that may reduce 

such impact, unless the agency certifies 

that the rule will not, if promulgated, 

have a significant economic impact on 

a substantial number of small entities. 

In the NPRM published on February 1, 

2023, Fiscal Service certified that the 

final rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Fiscal Service received some 

comments from the entities in the 

banking industry stating that requiring 

financial institutions to use TCVS prior 

to negotiating a Treasury check would 

place burdens on these entities by 

necessitating changes and upgrades to 

their check processing systems. In the 

final rule, the requirement in the NPRM 

to use TCVS has been eliminated. 

Instead, financial institutions will 

receive check return information for a 

properly presented Treasury check from 

the FRBs, through existing 

communication channels. Due to 

enhancements to Fiscal Service’s post 

payment processing system, this check 

return information typically will be 

provided to financial institutions within 

the time periods for making funds 

available prescribed by Regulation CC. 

In the uncommon instances where a 

financial institution does not receive the 

return information within the 

appropriate time period, and must 

release the funds to comply with 

Regulation CC, the financial institution 

will not be held liable if that results in 

a POC (unless the financial institution 

would otherwise be subject to liability 

due to the presentment guarantees in 

§ 240.4). 

Unfunded Mandates Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, 2 U.S.C. 

1532 (Unfunded Mandates Act), 

requires that an agency prepare a 

budgetary impact statement before 

promulgating any rule likely to result in 

a Federal mandate that may result in the 

expenditure by state, local, and tribal 

governments, in the aggregate, or by the 


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74888 Federal Register / Vol. 88, No. 210 / Wednesday, November 1, 2023 / Rules and Regulations 

private sector, of $100 million or more 

in any one year. If a budgetary impact 

statement is required, section 205 of the 

Unfunded Mandates Act also requires 

the agency to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating the 

rule. Fiscal Service has determined that 

this final rule will not result in 

expenditures by state, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year. Accordingly, we have 

not prepared a budgetary impact 

statement or specifically addressed any 

regulatory alternatives. 

List of Subjects in 31 CFR Part 240 

Authenticity, Canceled, Cancellation, 

Check, Check return, Check return 

information, Check stop, Declination, 

Financial institutions, Presentment, 

Presentment guarantees, Processing, 

Reasonable efforts, Stop, Treasury 

check, Valid check, Validity, 

Verification. 

For the reasons set out in the 

preamble, we amend 31 CFR part 240 as 

follows: 

PART 240—INDORSEMENT AND 

PAYMENT OF CHECKS DRAWN UPON 

THE UNITED STATES TREASURY 

■ 1. The authority citation for part 240 

continues to read as follows: 

Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 

U.S.C. 321, 3327, 3328, 3331, 3334, 3343, 

3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 

318 U.S. 363 (1943). 

■ 2. Revise § 240.2 to read as follows: 

§ 240.2 Definitions. 

Administrative offset or offset, for 

purposes of this part, has the same 

meaning as defined in 31 U.S.C. 

3701(a)(1) and 31 CFR part 285. 

Agency means any agency, 

department, instrumentality, office, 

commission, board, service, or other 

establishment of the United States 

authorized to issue Treasury checks or 

for which checks drawn on the United 

States Treasury are issued. 

Cancellation or canceled means that a 

Treasury check is no longer a valid 

instrument, due to the one-year 

limitation on negotiability and payment 

described in § 240.5(a), or the placement 

of a stop payment on the check by 

Treasury or the certifying agency. 

Certifying agency means an agency 

authorizing the issuance of a payment 

by a disbursing official in accordance 

with 31 U.S.C. 3325. 

Check or checks means an original 

check or checks; an electronic check or 

checks; or a substitute check or checks. 

Check payment means the amount 

paid to a presenting bank by a Federal 

Reserve Bank. 

Counterfeit check means a document 

that purports to be an authentic check 

drawn on the United States Treasury, 

but in fact is not an authentic check. 

Days means calendar days. For 

purposes of computation, the last day of 

the period will be included unless it is 

a Saturday, Sunday, or Federal holiday; 

the first day is not included. For 

example, if a reclamation was issued on 

July 1, the 90-day protest period under 

§ 240.9(b) would begin on July 2. If the 

90th day fell on a Saturday, Sunday, or 

Federal holiday, the protest would be 

accepted if received on the next 

business day. 

Declination means the process by 

which Treasury refuses to make final 

payment on a check, i.e., declines 

payment, by instructing a Federal 

Reserve Bank to reverse its provisional 

credit to a presenting bank. 

Declination date means the date on 

which Treasury issues the declination. 

Disbursing official means an official, 

including an official of the Department 

of the Treasury, the Department of 

Defense, any Government corporation 

(as defined in 31 U.S.C. 9101), or any 

official of the United States designated 

by the Secretary of the Treasury, 

authorized to disburse public money 

pursuant to 31 U.S.C. 3321 or another 

law. 

Drawer’s signature means the 

signature of a disbursing official placed 

on the front of a Treasury check as the 

drawer of the check. 

Electronic check means an electronic 

image of a check drawn on the United 

States Treasury, together with 

information describing that check, that 

meets the technical requirements for 

sending electronic items to a Federal 

Reserve Bank as set forth in the Federal 

Reserve Banks’ operating circulars. 

Federal Reserve Bank means a Federal 

Reserve Bank or a branch of a Federal 

Reserve Bank. 

Federal Reserve Processing Center 

means a Federal Reserve Bank center 

that images Treasury checks for 

archiving check information and 

transmitting such information to 

Treasury. 

Financial institution means: 

(1) Any insured bank as defined in 

section 3 of the Federal Deposit 

Insurance Act (12 U.S.C. 1813) or any 

bank which is eligible to make 

application to become an insured bank 

under section 5 of such Act (12 U.S.C. 

1815); 

(2) Any mutual savings bank as 

defined in section 3 of the Federal 

Deposit Insurance Act (12 U.S.C. 1813) 

or any bank which is eligible to make 

application to become an insured bank 

under section 5 of such Act (12 U.S.C. 

1815); 

(3) Any savings bank as defined in 

section 3 of the Federal Deposit 

Insurance Act (12 U.S.C. 1813) or any 

bank which is eligible to make 

application to become an insured bank 

under section 5 of such Act (12 U.S.C. 

1815); 

(4) Any insured credit union as 

defined in section 101 of the Federal 

Credit Union Act (12 U.S.C. 1752) or 

any credit union which is eligible to 

make application to become an insured 

credit union under section 201 of such 

Act (12 U.S.C. 1781); 

(5) Any savings association as defined 

in section 3 of the Federal Deposit 

Insurance Act (12 U.S.C. 1813) which is 

an insured depositary institution (as 

defined in such Act) (12 U.S.C. 1811 et 

seq.) or is eligible to apply to become an 

insured depositary institution under the 

Federal Deposit Insurance Act (12 

U.S.C. 1811 et seq.); and 

(6) Any financial institution outside 

of the United States if it has been 

designated by the Secretary of the 

Treasury as a depositary of public 

money and has been permitted to charge 

checks to the General Account of the 

United States Treasury. 

First examination means Treasury’s 

initial review of a check that has been 

presented for payment. The initial 

review procedures, which establish the 

authenticity and integrity of a check 

presented to Treasury for payment, may 

include reconciliation; retrieval and 

inspection of the check or the best 

available image thereof; and other 

procedures Treasury deems appropriate 

to specific circumstances. 

Forged or unauthorized drawer’s 

signature means a drawer’s signature 

that has been placed on the front of a 

Treasury check by a person other than: 

(1) A disbursing official; or 

(2) A person authorized to sign on 

behalf of a disbursing official. 

Forged or unauthorized indorsement 

means: 

(1) An indorsement of the payee’s 

name by another person who is not 

authorized to sign for the payee; or 

(2) An indorsement of the payee’s 

name made by another person who has 

been authorized by the payee, but who 

has not indorsed the check in 

accordance with §§ 240.4 and 240.13 

through 240.17; or 

(3) An indorsement added by a 

financial institution where the financial 

institution had no authority to supply 

the indorsement; or 


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(4) A check bearing an altered payee 

name that is indorsed using the payee 

name as altered. 

Guarantor means a financial 

institution that presents a check for 

payment and any prior indorser(s) of a 

check. 

Master Account means the record of 

financial rights and obligations of an 

account holder and the Federal Reserve 

Bank with respect to each other, where 

opening, intraday, and closing balances 

are determined. 

Material defect or alteration means: 

(1) The counterfeiting of a check; or 

(2) Any physical change on a check, 

including, but not limited to, a change 

in the amount, date, payee name, or 

other identifying information printed on 

the front or back of the check (but not 

including a forged or unauthorized 

drawer’s signature); or 

(3) Any forged or unauthorized 

indorsement appearing on the back of 

the check. 

Minor means the term minor as 

defined under applicable State law. 

Monthly statement means a statement 

prepared by Treasury that includes the 

following information regarding each 

outstanding reclamation: 

(1) The reclamation date; 

(2) The reclamation number; 

(3) Check identifying information; and 

(4) The balance due, including 

interest, penalties, and administrative 

costs. 

Original check means the first paper 

check drawn on the United States 

Treasury with respect to a particular 

payment transaction. 

Payee means the person that the 

certifying agency designated to receive 

payment pursuant to 31 U.S.C. 3528. 

Person means an individual, 

institution, including a financial 

institution, or any other type of entity; 

the singular includes the plural. 

Presenting bank means: 

(1) A financial institution which, 

either directly or through a 

correspondent banking relationship, 

presents checks to and receives 

provisional credit from a Federal 

Reserve Bank; or 

(2) A depositary which is authorized 

to charge checks directly to Treasury’s 

General Account and present them to 

Treasury for payment through a 

designated Federal Reserve Bank. 

Provisional credit means the initial 

credit provided to a presenting bank by 

a Federal Reserve Bank. Treasury may 

reverse a provisional credit until 

Treasury deems completion of first 

examination or final payment made 

pursuant to § 240.6(d). 

Reasonable efforts means, at a 

minimum: 

(1) Confirming the validity of a check 

by obtaining the check return 

information prior to making the funds 

from the check available for withdrawal 

(except when the check return 

information has not been provided 

within the applicable timeframe 

prescribed by Regulation CC, and 

making funds available for withdrawal 

is necessary to comply with Regulation 

CC; however, this exception does not 

apply if the presenting bank is 

otherwise subject to liability due to the 

presentment guarantees found in 

§ 240.4); and 

(2) Confirming the authenticity of the 

check such as by verifying the existence 

of the Treasury watermark on an 

original check. 

(3) Acceptance of a check by 

electronic image or other non-physical 

means does not impact reasonable 

efforts requirements. Based upon the 

facts at hand, including whether a check 

is an original check, a substitute check, 

or an electronic check, reasonable 

efforts may require the verification of 

other security features. 

Reclamation means a demand for the 

amount of a check for which Treasury 

has requested an immediate refund. 

Reclamation date means the date on 

which Treasury issues a reclamation. 

Normally, Treasury sends demands to 

presenting banks or other indorsers 

within two business days of the 

reclamation date. 

Reclamation debt means the amount 

owed as a result of Treasury’s demand 

for refund of a check payment, and 

includes interest, penalties and 

administrative costs assessed in 

accordance with § 240.8. 

Reclamation debtor means a 

presenting bank or other indorser of a 

check from whom Treasury has 

demanded a refund in accordance with 

§§ 240.8 and 240.9. The reclamation 

debtor does not include a presenting 

bank or other indorser who may be 

liable for a reclamation debt, but from 

which Treasury has not demanded a 

refund. 

Recurring benefit payment includes 

but is not limited to a payment of 

money for any Federal Government 

entitlement program or annuity. 

Stop payment means that Treasury or 

a certifying agency has indicated that a 

Treasury check should not be paid and 

instead should be canceled. A stop 

payment could be placed on a Treasury 

check for reasons including that the 

check was reported lost or stolen; the 

check was determined to have been 

issued improperly; the payee was 

deceased prior to the issuance of the 

check; or any other allowable reason. 

Substitute check means a paper 

reproduction of a check drawn on the 

United States Treasury that meets the 

definitional requirements set forth at 12 

CFR 229.2(aaa). 

Treasury means the United States 

Department of the Treasury, or when 

authorized, an agent designated by the 

Secretary of the Treasury or his or her 

delegee. 

Treasury Check Offset means the 

collection of an amount owed by a 

presenting bank in accordance with 31 

U.S.C. 3712(e). 

Truncate means to remove a paper 

check from the forward collection or 

return process and send to a recipient, 

in lieu of such paper check, a substitute 

check or an electronic check. 

U.S. securities means securities of the 

United States and securities of Federal 

agencies and Government corporations 

for which Treasury acts as the transfer 

agent. 

Validity or valid check means an 

authentic Treasury check that is a 

payable instrument and has not been 

previously negotiated or canceled. 

Writing includes electronic 

communications when specifically 

authorized by Treasury in implementing 

instructions. 

■ 3. Amend § 240.4 by revising 

paragraph (d) to read as follows: 

§ 240.4 Presentment guarantees. 

* * * * * 

(d) Authenticity and validity. That the 

guarantors have made all reasonable 

efforts to ensure that a check is both an 

authentic Treasury check (i.e., it is not 

a counterfeit check) and a valid 

Treasury check (i.e., it has not been 

previously negotiated or canceled). 

* * * * * 

■ 4. Amend § 240.6 by revising 

paragraph (c)(3) to read as follows: 

§ 240.6 Provisional credit; first 

examination; declination; final payment. 

* * * * * 

(c) * * * 

(3) Treasury has already received 

presentment of a substitute check, 

electronic check, or original check 

relating to the check being presented, 

such that Treasury is being requested to 

make payment on a check it has already 

paid; or Treasury is being requested to 

make payment on a check that is not 

valid due to a stop payment or other 

cancellation. 

* * * * * 

■ 5. Amend § 240.12 by revising 

paragraphs (a)(1)(ii) and (iii) and adding 

paragraph (a)(1)(iv) to read as follows: 

§ 240.12 Processing of checks. 

(a) * * * 


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74890 Federal Register / Vol. 88, No. 210 / Wednesday, November 1, 2023 / Rules and Regulations 

(1) * * * 

(ii) A check was issued more than one 

year prior to the date of presentment; 

(iii) The Federal Reservice Bank has 

been notified by Treasury, in 

accordance with § 240.15(c), that a 

check was issued to a deceased payee; 

or 

(iv) The Federal Reserve Bank has 

been notified by Treasury that a check 

is not valid. 

* * * * * 

David A. Lebryk, 

Fiscal Assistant Secretary. 

[FR Doc. 2023–24039 Filed 10–31–23; 8:45 am] 

BILLING CODE 4810–AS–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

43 CFR Part 3170 

[BLM_HQ_FRN_MO4500173878] 

RIN 1004–AE90 

Onshore Oil and Gas Operations; 

Federal and Indian Oil and Gas Leases; 

Codification of Onshore Orders 1, 2, 6, 

and 7; Correction 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Correcting amendment. 

SUMMARY: On June 16, 2023, the Bureau 

of Land Management (BLM) published a 

final rule that codified Onshore Order 

1—Approval of Operations; Onshore 

Order 2—Drilling Operations on Federal 

and Indian Oil and Gas Leases; Onshore 

Order 6—Hydrogen Sulfide Operations; 

and Onshore Order 7—Disposal of 

Produced Water into the Code of 

Federal Regulations (CFR). This action 

corrects two cross references in that 

regulation. 

DATES: Effective on November 1, 2023. 

ADDRESSES: You may send inquiries or 

suggestions to Director (630), Bureau of 

Land Management, 1849 C St. NW, 

Room 5646, Washington, DC 20240; 

Attention: RIN 1004–AE90. 

FOR FURTHER INFORMATION CONTACT: 

Yvette Fields, Chief, Division of Fluid 

Minerals, telephone: 240–712–8358, 

email: yfields@blm.gov; or Faith 

Bremner, Regulatory Analyst, Division 

of Regulatory Affairs, email: fbremner@

blm.gov. Individuals in the United 

States who are deaf, blind, hard of 

hearing, or have a speech disability may 

dial 711 (TTY, TDD, or TeleBraille) to 

access telecommunications relay 

services for contacting Ms. Fields. 

Individuals outside the United States 

should use the relay services offered 

within their country to make 

international calls to the point-ofcontact in the United States. 

SUPPLEMENTARY INFORMATION: The final 

codification rule (June 16, 2023, 88 FR 

39514), placed the four Onshore Orders 

into the CFR without making any 

substantive changes to their content. 

The only changes made to the four 

Onshore Orders were related to 

formatting, such as adding new section 

and paragraph designations, so that the 

Orders conform to the Office of the 

Federal Register’s Document Drafting 

Handbook requirements. Since the four 

Onshore Orders were duly promulgated 

through prior notice-and-comment 

rulemakings, and the final rule did not 

change them, the BLM codified the 

orders in the CFR as a final rule without 

any further public comment. 

The technical amendment that is the 

subject of this correction is prompted by 

the inclusion of two incorrect cross 

references in the final codification rule. 

During the process of preparing the final 

rule for publication and updating cross 

references throughout the document, the 

BLM inadvertently included incorrect 

cross references in a portion of the final 

rule that pertain to blowout preventer 

testing requirements. These 

requirements are found at 43 CFR 

3172.6. These testing requirements have 

been in effect since 1988. 

List of Subjects in 43 CFR Part 3170 

Administrative practice and 

procedure, Disposal of produced water, 

Drilling operations, Flaring, 

Government contracts, Hydrogen sulfide 

operations, Indians-lands, Immediate 

assessments, Mineral royalties, Oil and 

gas exploration, Oil and gas 

measurement, Public lands—mineral 

resources, Reporting and record keeping 

requirements, Royalty-free use, Venting. 

Accordingly, 43 CFR part 3170 is 

corrected by making the following 

correcting amendments: 

PART 3170—ONSHORE OIL AND GAS 

PRODUCTION 

■ 1. The authority citation for part 3170 

continues to read as follows: 

Authority: 25 U.S.C. 396d and 2107; 30 

U.S.C. 189, 306, 359, and 1751; and 43 U.S.C. 

1732(b), 1733, and 1740. 

■ 2. Amend § 3172.6 by revising 

paragraphs (b)(9)(iv) introductory text 

and (b)(9)(xi) to read as follows: 

§ 3172.6 Well control. 

* * * * * 

(b) * * * 

(9) * * * 

(iv) As a minimum, the test in 

paragraphs (b)(9)(ii) and (iii) of this 

section shall be performed: 

* * * * * 

(xi) All of the tests described in 

paragraphs (b)(9)(ii) through (x) of this 

section and/or drills shall be recorded 

in the drilling log. 

* * * * * 

Laura Daniel-Davis, 

Principal Deputy Assistant Secretary, Land 

and Minerals Management. 

[FR Doc. 2023–24053 Filed 10–31–23; 8:45 am] 

BILLING CODE 4331–29–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

[Docket No. FWS–R4–ES–2021–0058; 

FF09E22000 FXES1113090FEDR 234] 

RIN 1018–BE53 

Endangered and Threatened Wildlife 

and Plants; Reclassifying Mitracarpus 

Polycladus From Endangered to 

Threatened With a Section 4(d) Rule 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Final rule. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), are 

reclassifying Mitracarpus polycladus (a 

plant, no common name) from 

endangered to threatened (downlist) 

under the Endangered Species Act of 

1973, as amended (Act). This action is 

based on our evaluation of the best 

available scientific and commercial 

information, which indicates that the 

species’ status has improved such that 

it is not currently in danger of 

extinction throughout all or a significant 

portion of its range, but that it is still 

likely to become so in the foreseeable 

future. We are also finalizing a rule 

issued under section 4(d) of the Act that 

provides for the conservation of the 

species. 

DATES: This rule is effective December 1, 

2023. 

ADDRESSES: The proposed rule, this 

final rule, and supporting documents 

are available at https://www.fws.gov/ 

office/caribbean-ecological-services/ 

library and at https://

www.regulations.gov under Docket No. 

FWS–R4–ES–2021–0058. 

FOR FURTHER INFORMATION CONTACT: 

Edwin Mun ̃iz, Field Supervisor, U.S. 

Fish and Wildlife Service, Caribbean 

Ecological Services Field Office, P.O. 

Box 491, Boquero ́n, PR 00622; email: 


ddrumheller on DSK120RN23PROD with RULES1