- § 424.350 - Replacement of checks that are lost, stolen, defaced, mutilated, destroyed, or paid on forged endorsements.
- § 424.352 - Intermediary and carrier checks that are lost, stolen, defaced, mutilated, destroyed or paid on forged endorsements.
§ 424.350 - Replacement of checks that are lost, stolen, defaced, mutilated, destroyed, or paid on forged endorsements.
(a) U.S. Government checks—(1) Responsibility. The Treasury Department is responsible for the investigation and settlement of claims in connection with Treasury checks issued on behalf of CMS.
(2) Action by CMS. CMS forwards reports of lost, stolen, defaced, mutilated, destroyed, or forged Treasury checks to the Treasury Department disbursing center responsible for issuing checks.
(3) Action by the Treasury Department. The Treasury Department will replace and begin reclamation of Treasury checks in accordance with Treasury Department regulations (31 CFR parts 235, 240, and 245).
(b) Intermediary and carrier benefit checks. Checks issued by intermediaries and carriers are drawn on commercial banks and are not subject to the Federal laws and Treasury Department regulations that govern Treasury checks. Replacement procedures are carried out in accordance with § 424.352 under applicable State law (including any Federal banking laws or regulations that may affect the relevant State proceedings).
§ 424.352 - Intermediary and carrier checks that are lost, stolen, defaced, mutilated, destroyed or paid on forged endorsements.
(a) When an intermediary or carrier is notified by a payee that a check has been lost, stolen, defaced, mutilated, destroyed, or paid on forged endorsement, the intermediary or carrier contacts the commercial bank on whose paper the check was drawn and determines whether the check has been negotiated.
(b) If the check has been negotiated—
(1) The intermediary or carrier provides the payee with a copy of the check and other pertinent information (such as a claim form, affidavit or questionnaire to be completed by the payee) required to pursue his or her claim in accordance with State law and commercial banking regulations.
(2) To pursue the claim, the payee must examine the check and certify (by completing the claim form, questionnaire or affidavit) that the endorsement is not the payee's.
(3) The claim form and other pertinent information is sent to the intermediary or carrier for review and processing of the claim.
(4) The intermediary or carrier reviews the payee's claim. If the intermediary or carrier determines that the claim appears to be valid, it forwards the claim and a copy of the check to the issuing bank. The intermediary or carrier takes further action to recover the proceeds of the check in accordance with the State law and regulations.
(5) Once the intermediary or carrier recovers the proceeds of the initial check, the intermediary or carrier issues a replacement check to the payee.
(6) If the bank of first deposit refuses to settle on the check for good cause, the payee must pursue the claim on his or her own and the intermediary or carrier will not reissue the check to the payee.
(c) If the check has not been negotiated—
(1) The intermediary or carrier arranges with the bank to stop payment on the check; and
(2) Except as provided in paragraph (d), the intermediary or carrier reissues the check to the payee.
(d) No check may be reissued under (c)(2) unless the claim for a replacement check is received by the intermediary or carrier no later than 1 year from the date of issuance of the original check, unless State law (including any applicable Federal banking laws or regulations that may affect the relevant State proceeding) provides a longer period which will control.