Treasury Amends Check Reclamation Rules
Check reclamation is a recovery procedure used by Treasury Department’s Financial Management Service (FMS) to obtain a refund (reclamation) from a presenting financial institution for paid federal government checks.
The regulation sets forth how checks may be endorsed and the remedies available to Treasury when checks are improperly negotiated.
FMS amended its reclamation rules, effective Oct. 19, 2011.
The revised regulation directs Federal Reserve Banks to debit a financial institution’s master account for all check reclamations against the financial institution that the
institution hasn’t protested. Cashier’s check payments to FMS will no longer be accepted.
Financial institutions will continue to have the right to file a protest with FMS if they believe a proposed reclamation is in error.