(Page 244) indorsement on the back of an Image of an Electronic [This is not a Regulation CC related change.] Returned Check. The proposed draft rule changes the current rule which references an indorsement is “that physically printed on the back of the Electronic Image.” Section XX(D)(1) Made conforming changes Proposed revisions to Commentary are mostly conforming to the Commentary to changes or additional text to Commentary to reflect the Commentary reflect proposed changes to above described ECCHO Rules changes to Section Section XX(D)(1) regarding XX(D)(1). (Page 249) reliance on X9 standard and Regulation CC for indorsement requirements. Added new Commentary to explain the new ECCHO Rule that states that the return reason does not have to appear on the front of the Electronic Returned Check. Deleted Commentary The Commentary reference to indorsements is “overlay” stating that use of an proposed for deletion because the ECCHO Rules intend to indorsement rely on the ANSI X9.100-187 standard regarding “overlay” satisfies the indorsement indorsements without any expansion or variation. ANSI requirement. Commentary X9.100-187 does include a statement regarding the use of now refers to the applicable overlay indorsements. X9 industry standard governing indorsements that are made applicable by Regulation CC to Electronic Returned Checks. Removed Commentary that The current Commentary statement recommending retention recommended retention of of prior indorsements is proposed for deletion because the prior indorsements on an statement could be viewed as inconsistent with the obligation Electronic Returned Check. of banks to comply with X9 standard regarding indorsements, Revised explanation of as made applicable by amended Regulation CC. The possible liability to proposed revised Commentary retains the current Returning Member that did explanation of how liability arises when a Commentary’s not include prior Returning Member does not include prior indorsements when indorsements. sending an Electronic Returned Check. Section XX(D)(4) Added The newly added text on return reason “suspected “suspect duplicate” return reason as provides a more common return reason example. duplicate” Commentary an example of a situation where a paying bank [This is not a Regulation CC related change.]
(Page 244) indorsement on the back of an Image of an Electronic Returned Check. The proposed draft rule changes the current rule which references an indorsement “that is physically printed on the back of the Electronic Image.” [This is not a Regulation CC related change.] Section XX(D)(1) Commentary (Page 249) Made conforming changes to the Commentary to reflect proposed changes to Section XX(D)(1) regarding reliance on X9 standard and Regulation CC for indorsement requirements. Added new Commentary to explain the new ECCHO Rule that states that the return reason does not have to appear on the front of the Electronic Returned Check. Deleted Commentary stating that use of an “overlay” indorsement satisfies the indorsement requirement. Commentary now refers to the applicable X9 industry standard governing indorsements that are made applicable by Regulation CC to Electronic Returned Checks. Removed Commentary that recommended retention of prior indorsements on an Electronic Returned Check. Revised explanation of possible liability to Returning Member that did not include prior indorsements. Proposed revisions to Commentary are mostly conforming changes or additional text to Commentary to reflect the above described ECCHO Rules changes to Section XX(D)(1). The Commentary reference to “overlay” indorsements is proposed for deletion because the ECCHO Rules intend to rely on the ANSI X9.100-187 standard regarding indorsements without any expansion or variation. ANSI X9.100-187 does include a statement regarding the use of overlay indorsements. The current Commentary statement recommending retention of prior indorsements is proposed for deletion because the statement could be viewed as inconsistent with the obligation of banks to comply with X9 standard regarding indorsements, as made applicable by amended Regulation CC. The proposed revised Commentary retains the current Commentary’s explanation of how liability arises when a Returning Member does not include prior indorsements when sending an Electronic Returned Check. Section XX(D)(4) Commentary Added “suspected duplicate” return reason as an example of a situation where a paying bank The newly added text on “suspect duplicate” return reason provides a more common return reason example. [This is not a Regulation CC related change.]