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National Check Payments Certification
What Is A Check?
Copyright© 2015 by the Electronic Check Clearing House Organization
NCP 2016 Exam CycleSupplemental Materials: 1.3
2National Check Payments Certification
NOTICESThis training course may provide an introduction to or summary of various aspects of check payments and the legal and rules framework for check image exchange. Responsibility for compliance with image exchange rules, and/or the legal, operational and regulatory requirements applicable to check image exchange, remains at all times with the financial institution participating in check image exchange and/or the individual or company using a check image exchange service.
This presentation and the information contained herein is not intended as legal or compliance advice or recommendation to any person or company. This document could include technical inaccuracies or typographical errors and individual users are responsible for verifying any information found in this presentation and related “live” webinar or webinar playback. Financial institutions should consult with their legal counsel regarding legal and operational requirements applicable to any check image exchange program they may offer or in which they participate.
These materials may not be reproduced or published, in whole or in part, without the express permission of ECCHO.
Copyright© 2015 by the Electronic Check Clearing House Organization(Certain contributed content subject to third party copyrights)
What Is A Check?
4National Check Payments Certification
Payments Teaser
• Start with the images on next few slides–Can you tell which is a check?
–Is this paper check a check?
5National Check Payments Certification
Is This Large Check a Check?
• Hint: Assume this check has a MICR line
6National Check Payments Certification
Is This A Check?
• If this is a check, what type of check is this?
7National Check Payments Certification
Is This A Check?
• Hint: This “cloud” illustrates an image of a check. Is this a check
8National Check Payments Certification
Is This A Check?
• This is a MICR line from a check? –Is this a check?
9National Check Payments Certification
Is This A Check?• Hint: It is being sent directly from a mobile device?
2304North Pole, Inc.124 Elm StreetAnytown, ST 1111
DatePAYTO THEORDER OF
Your Bank4321 Ilala StreetAnytown, ST 1111FOR
2304 011500120 23456789
12/25/2012John Q. Customer
Four hundred thirty-seven and 23/100
$ 437.23
R. G. North
10National Check Payments Certification
Is This A Check?• Hint: This is created and sent from an online bill
pay/accounting software?
11National Check Payments Certification
Negotiable Instrument & Check
• Two Concepts – Two Definitions–Negotiable instrument and check defined UCC–Check considered a “demand draft”
• Check also defined in Reg CC–To be considered a check (not a noncash item), items
must qualify for handling by automated check processing equipment
• Examples shown: Negotiable instrument as a large “Donation” check, but...–Even with all elements of negotiable instrument, it
would not qualify for automated processing
12National Check Payments Certification
UCC 3: Negotiable Instrument
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Negotiable Instrument
• Draft as defined in UCC 3-104• Written order signed by the drawer
–Unconditional order to pay:a fixed sum of moneyon demand or at a definite timeto a named payee or to bearer
14National Check Payments Certification
Check – Negotiable Demand Draft
• Defined in Reg CC 229.2(k) as drawn on:–or payable through or at a bank; –the Federal Reserve Bank or Federal Home Loan
Bank;–the US Treasury;–a state or unit of local government;
• Includes:–a US Postal money order or traveler's check; –an original check and a substitute check
• Does not include a noncash item
15National Check Payments Certification
Noncash Item
• Would otherwise be a check except for special conditions
• Reg CC §229.2 Definitions: Noncash item – item that would otherwise be a check except that:–Passbook, certificate, or other document is attached;–Accompanied by special instructions, such as a request
for special advice of payment or dishonor;–Consists of more than a single thickness of paper,
except checks that may still qualify for handling by automated check processing equipment
– Item not been preprinted or post-encoded in magnetic ink with routing number of paying bank
16National Check Payments Certification
Additional Information
• For details on UCC and Reg CC provisions regarding terms defined in these materials, please see:–UCC Articles 3 & 4–Regulation CC – Availability of Funds and
Collection of Checks
Thank You!
Supplemental Materials: “What Is A Check?”
Electronic Check Clearing House Organization3710 Rawlins Street; Suite 1075
Dallas, Texas 75219
NOTICEThis NCPC Program document contains copyrighted materials of its publisher.
These program training materials may not be reproduced or published, in whole or in part, without the express permission of ECCHO.
Copyright© 2015 by the Electronic Check Clearing House Organization
Ellen Heffner, NCPDirector and Education Manager
