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FED E R A L R ESER VE BANK O F NEW YORK No. 8 2 4 2 - 1 [ Circular December 22, 1977 J Disputed (Late) Returns of Unpaid Cash Items To the Member Banks of the Second Federal Reserve District, and Others Concerned: In our Circular N o. 7801, dated January 22, 1976, you were advised, am ong other matters, o f the Federal R eserve System ’ s new procedure fo r handling disputed (la te) returns o f unpaid cash items. T he new procedure was implemented to handle dishonored checks and other cash items that a paying bank allegedly has not returned or on which it has not otherw ise taken proper action w ithin the time limits prescribed by Regulation J o f the B oard o f G overnors o f the Federal R eserve System. A s part o f the new procedure, it was requested that, when a sending bank requests credit fo r an alleged late return item, the fa cts o f the case be outlined in a written state ment (accom pan yin g the unpaid item ), which should be submitted to this Bank in duplicate. A sample fo rm fo r this purpose was distributed with our Circular N o. 7801. W h en a pay ing bank, on the other hand, asserts that the return o f the item in question was timely, the procedure calls fo r the paying bank to return the item accom panied by a statement o f the details o f its timely handling so that the paying bank may be recredited. Recently, it has been brought to our attention that paying banks are not always thoroughly docum enting their handling o f items allegedly returned late. In order to assure that sufficient inform ation is gathered from both parties, tw o form s, one fo r the sending bank alleging late return and one fo r the paying bank asserting timely return, have been developed. W e a sk th a t y o u u se th e se f o r m s f r o m n o w on. Samples o f the form s to be used are enclosed with this circular. W h en used, the appropriate fo rm should be submitted to this Bank in d u p lic a te . Please note that the sample fo rm fo r the sending bank has been slightly revised from the one previously distributed. I f you have any questions regarding this matter, you may contact any o f the follow in g : H e a d O ffice Jerome P. P erlongo, M anager, Check Adjustm ent and Return Items Department (T e l. N o. 212-7 9 1-52 9 2) B u ffa lo B ra n c h R obert J. M cD onnell, Operations Officer (T el. N o. 716-849-5022) C r a n fo r d O ffice Fred A . Denesevich, M anager (T e l. N o. 201-272-9000, E xt. 2 1 3 ) J erich o O ffice L eonard I. Bennetts, M anager (T el. N o. 516-997-4569) Utica Office R obert C. Thom an, V ice President (T e l. N o. 315-736-8321) P a u l A. V o l c k e r , P r e s id e n t. Sample Form ALLEGATION OF LATE RETURN (Sending Bank) To: FEDERAL RESERVE BANK OF _____________________ ___ The dishonored check described below and attached is being resent to you because o f LATE RETURN: AMOUNT $_____________________ DATE ____________________________ DRAWN BY (MAKER) ____________________________ CHECK N O .________________ PAYABLE TO (PAYEE) __________________________ Deposited by our bank as a cash item w ith __________________________ 1n cash l e t t e r dated _____________________ to ta lin g $_______________________ , tape to ta l $__________________ __ lis te d between items fo r $_______________________ and $________________________ » I.D . No. fCLAIM: We claim th a t th is item , according to our records and the endorsements and stamps on the item , was returned by the paying bank a f t e r It s midnight deadline, and we c e r t if y th a t, as to notice o f dishonor o f the item , we received CHECK ONE (___ ) wire notice on (d a te ) ________ ' _______ (___ ) no notice other than the returned item. We fu rth e r claim th a t we received the unpaid Item on ( d a t e ) ______________ from your bank in return item le t t e r dated ________ ______ , to ta lin g $ tape to ta l $ , lis te d between items fo r $ _ an? $____________ ~ We c e r t if y th a t such delay in return caused us to incur a fin a n c ia l lo ss, in th a t pl £As £ CreCi i T ouft account pro visionally and Ad v is e . BY Sending Bank O ffic ia l Signature [TO BE PREPARED AND SUBMITTED IN DUPLICATE BY SENDING BANK ON ITS LETTERHEAD] [E n c. C ir. No. 82 L 2 ] Sample Form » DISCLAIMER OF LATE RETURN (Paying Bank) TO: FEDERAL RESERVE BANK OF ______________________ _ Your advice o f d e b it d a te d ______________________ Indicated th a t a return item in the amount of $_________________________ , forwarded to you in our return Item le t t e r dated ______________________, in the amount o f $___________________ , tape to ta l $___________ , lis te d between items fo r $_____________________and $_____________________, has been provision a lly charged back to us because the sending bank alleges "Late Return". Our records in d ic a te th a t the item was received as a cash item in your cash l e t ^ t e r dated _____________________, in the amount o f $____________________________ . tape to ta l $_____________________, lis te d between items fo r $___________________ and $___________ I Wire notice of return was given on th is item (d ate) _______ *______________ . Paying Banlc O ffic ia l Signature ♦Enter "none" i f no wire notice was given or "phone and date" i f notice was given by telephone. ^ T O BE PREPARED AND SUBMITTED IN DUPLICATE BY PAYING BANK ON ITS LETTERHEAD] [E n c. C ir. No. 82^2] .
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