What protections does a bank have when a check drawn on us has been deposited at another financial institution, but it was altered, and the other financial institution does not want to credit us with the full amount of the check. The check was deposited via mobile app.

What was altered???

The payee

the fraudster altered the name by making it seem it was for someone else

Since the Uniform Commercial Code assigns liability to the bank of first deposit if it violates any of its presentment warranties (which include warranting that the check is not altered and all endorsements are valid) then your steps are these:

1. Send a without entry claim along with the image of the check and a signed affidavit of alteration from the maker of the check.
2. If the bank of first deposit refuses to accept liability, legal counsel drafts a demand letter reminding the bank of its liabilities under the applicable sections of the Uniform Commercial Code when it violates a presentment warranty.
3. If the bank of first deposit refuses to accept liability, discuss options with legal counsel for suing them.

These claims are all governed under state law. If there is a dispute about responsibility for an item the person who has final say in assigning liability is a judge or jury. There is no "regulation" that forces an institution to reimburse the way there is for electronic payments under Reg E.

This is great help, thank you BrianC.