Section 7: Legal Basis

Introduction: This section cites the laws and regulations governing the check reclamation process.

Title 31

31 U.S.C. 3712

• Establishes Fiscal Service's right to demand a refund from a presenting bank when, after the check is paid, forgery is established or the payee's entitlement stopped with his/her death.
• Establishes Treasury Check Offset.

31 U.S.C. 3701-3720E

• Establishes the government's right to collect debts using various collection tools, including offset.
• Establishes the rates at which a federal entity must assess interest, penalties, and administrative fees on delinquent debts.

31 CFR 240

• Establishes the process by which Fiscal Service will directly debit a presenting bank's federal reserve master account for the full amount of the reclamation if not paid or protested by the 30th calendar day from the reclamation date.
• Establishes the process by which Fiscal Service will add interest, penalties and administrative fees to delinquent reclamation debts, if applicable.
• Establishes the process by which Fiscal Service will refer reclamation debts for collection by offset.
• Establishes that Fiscal Service will take such action as may be necessary to collect delinquent reclamation debts.

Title 4

Limited Payability

The Competitive Equality Banking Act of 1987 (Public Law 100-86), referred to as Limited Payability, significantly reduced the time period for…

• Negotiating U.S. Treasury checks to one year from the check issue date.
• Filing non-receipt claims to one year from the check issue date.
• Initiating a reclamation action against the presenting bank to one and a half years from the date the check is paid.

Exception: In cases of deceased payees, reclamation action must begin within one year from the date the check is paid.