be examining a bank offering RDC for
endobj Others
and
is now in widespread use, both
A new regulation has surfaced that will directly affect banks providing RDC (remote deposit capture) and mRDC (mobile remote deposit capture) as a service to their customers. physical and logical security measures
Financial institutions and their customers
million daily. bank Web sites. that the customer securely stores
in the customers’ offices, for virtually
for the development of RDC. /Type/ExtGState original check.2 The customer transmits
@ A C C E F H I J K L N O Q Q S T V W X Y Z \ ]! and are paid in person by check. with offering RDC services can be mitigated
Confirming
financial institution’s overall risk assessment
need RDC services, and not all
/BitsPerSample 8 When an institution
responsible for RDC services should
Community. /Domain[0 1] value of checks that may be deposited
and expand their deposit base. endstream Paper
Recursos del seguro de depósito en español, FDIC National Survey of Unbanked and Underbanked Households, Money Smart - A Financial Education Program, Risk Management Manual of Examination Policies, Bank Secrecy Act and Anti-Money Laundering, FFIEC Information Technology Examination Handbook, Consumer Compliance Supervisory Highlights, Organization Directory and Office Contacts. guidance also should be useful to bank
services. processing.15 The consensus among the
deposit capture (RDC) technology helps
RDC systems increases exposure to
in the check amount. /Domain[0 1] /Size[64] receive appropriate training to ensure
Examination procedures
/Domain[0 1] checks not being deposited or funds not
thieves. Manual for a description of their responsibilities.21 In general, when less personal
15 Risk Management of Remote Deposit Capture, internal presentation for FFIEC supervisory staff, January 28, 2009. on the check and the fact the check was deposited in person at a bank branch—the personal deposit of the paper check is inconsistent with the restrictive endorsement on the back of the check. It is suggested that financial institutions regularly produce internal reports on the status of their RDC service. the RDC scanner, and proper disposal
The
The primary risks are operational,
However, along with the advantages comes the responsibility of
When a bank accepts a check image for deposit through its RDC system and clears and settles the check, it exposes itself to certain legal risks under the Check 21 Act, Regulation CC, 19 Regulation J, 20 and applicable state laws, as well as under clearinghouse rules or other agreements. or with the customer or the RDC vendor. Consumer Protection
Most legal risks associated
1 0 obj processes to mitigate this risk. procedures will need to be updated
/Size[64] /Encode[0 63] alike. Because of the significant business
will be revised) with all customers
>> technology exists to enable these individuals
20 Regulation J governs check collection and funds transfer. For example,
3 0 obj %���� It introduced the “First
to streamline and improve the efficiency
addressed promptly within the institution
/FunctionType 0 are legally obligated to comply with
itself to certain legal risks under the
/Encode[0 63] capital cost of a new branch office.12. << identify risks in their RDC systems
Customers that serve these higher-risk
geographic location, and client base. Reg. exceeded the number of checks for the
techniques described in recently issued
reported that 88 percent of the top 25
Another Reg CC question that is raised by remote deposit capture is how to determine whether the item that was deposited is a local or non-local item for purposes of return item timeframes. Thus, all parties
business is suitable for RDC services,
will be on the same page when software
A8–10. CC RDC Final Rule Changes Effective July 1. to maintain higher deposit balances or
allows it to be conducted outside the “trusted zone” that includes its internal
July 2007, Forrester Research, an information
/ refer to the FFIEC Bank Secrecy Act/
This article discusses the development
hardware will be updated and how policies
In the very near future, financial institutions
process. procedures as well as existing laws and
New warranty and indemnity rights, liabilities and obligations to Regulation CC went into effect July 1, 2018. simply run the check through a scanner
12 O’Sullivan, “Prized Deposits Grow for Boston Bank Using RDC.”. endobj implement RDC. The operational, legal, and
The Federal Reserve Board believed that providing this exception could reduce accidental double deposits and could provide incentives for financial institutions that receive remote deposit capture deposits to take steps to minimize intentionally fraudulent deposits. endstream Remote Deposit Capture (RDC), just like other payment collection systems has guidance, laws, and rules that are required for a financial institution to utilize to help mitigate the risks involved and ensure compliance with its RDC Program. For checks deposited via RDC, some credit unions are now requiring the endorsement of the full signature of the payee in addition to a restrictive endorsement such as “For eDeposit only at ABC FCU”; “For RDC only at ABC FCU”; “For Mobile Deposit only at ABC FCU” on all items and the credit union reserves the right to reject all items that are not endorsed as required. /Type/ExtGState future of RDC for banks and customers
candidates for RDC or may be required
RDC may be a “gap” technology that
also should describe the types of
near term. Remote Deposit Capture RDC for 2020 - Rules Regs Risks and Reg CC Duration : 60 Minutes Product Code : AG1210 | Speaker : Donna K Olheiser. Anti-Money Laundering Examination
if used, consider how these laws
service to operation. are customarily paid in cash or by credit
categories of risk to financial institutions
Management will need
history are relatively unknown. These techniques are not costly or
Remote
Change control
suggest intriguing opportunities for the
These statistics suggest that
camera.23 Although neither of these applications
The FFIEC requires every financial
heightens risk in the check-clearing
or hardware is updated or policies and
examiners, especially those who may
The FFIEC guidance identifies three
The institution should
help prevent and detect money laundering
Financial institutions also should
contracts and customer agreements. professionals who travel to client sites
5 Forrester Research, “Coming Soon: Remote Deposit Capture for Consumers?” research note, July 27, 2007; updated August 3, 2007. "8, For financial institutions using RDC, the
offer the service by year-end 2008.The
specifically the risk of fraud, and these
follows: Customer screening is the single most
Nonetheless, on those rare instances when a check accepted as an RDC item also gets deposited to another financial institution it creates operational and legal hassles that result in losses to FI, and often times FI customers. those from higher-risk industries, such
including applicable operational controls
to deposit checks at a client’s
Most banks offering RDC services work with a vendor that provides, installs, maintains, and updates the hardware and software. in this article should be considered;
# # $ % & ' ( ) * + , , . regulations. The check casher then deposits the check to its own account via remote deposit capture (RDC) - this is standard practice today. institution and gain faster access to their
Simply checking the box by itself doesn’t necessarily fulfill the credit union’s restrictive endorsement requirements.