Reg CC: Managing Fraud and Compliance Risk

The last several years have seen a significant increase in check fraud resulting in significant losses for financial institutions. Deposit Operations and Compliance may find themselves at odds as to the best way to defend the institution from fraud while still complying with applicable consumer protection regulations. Regulation CC can be a tool for combatting fraud as we can delay the availability of checks for a period of time but check holds do not completely insulate us risk. Additionally, our customer may be the victim of stolen or washed checks and understanding our deposit agreement and state Uniform Commercial Code is critical to knowing who is liable for this type of fraud.

In this session, we will explore trends in check fraud and the various options to consider to mitigate our risk, protect our institution and our customers.

Key takeaways:

• Understand proper use of Regulation CC Holds
• Identify acceptable and unacceptable reasonable cause holds
• Understand fraud scenarios where holds are ineffective
• Develop processes for check acceptance
• Understand the relationship between Regulation CC and the Uniform Commercial Code