I am hoping someone can help me understand the following from The Risk Mangement of Remote Deposit Capture from the FFIEC:

Senior management should identify and assess exposure to legal and compliance risks related to RDC. For example, if a financial institution accepts a deposit of check images from a customer through the RDC system, legal risk exposures may be related to the controls over the process used for image capture or image exchange and the institution’s arrangements and contracts for clearing and settling checks. When a financial institution sends the deposited items, in either electronic or paper form, to another institution for collection or presentment, it should consider the risks it takes under the Check Clearing for the 21st Century Act (Check 21 Act),5 Regulation CC, Regulation J, applicable state laws, or any agreements or clearinghouse rules.6

Some RDC systems employ “least cost routing,” which allows items to be transmitted and settled either through the check collection system or as an ACH transaction. Financial institutions should understand the separate rules7 and liabilities and consider them in the risk assessment.

footnotes:

5 Refer to the FFIEC Check 21 InfoBase for additional discussion of the Check 21 Act and the responsibilities associated with substitute checks at http://www.ffiec.gov/exam/check21.
6 When a financial institution sends a check for collection or presentment, it makes warranties and takes on liabilities with respect to that check under Regulation CC, state law (the Uniform Commercial Code), and, if it sends the check to a Federal Reserve Bank, Regulation J. In addition, the financial institution may take on other responsibilities with respect to the check as agreed to between the participating institutions by contract or clearinghouse rules. The financial institution should consider applicable Federal Reserve Operating Circulars and
governing agreements of relevant third parties involved in their check processing operations (e.g., Electronic Check Clearinghouse Organization [ECCHO]).
7 See the rules of the National Automated Clearing House Association (NACHA) and Regulation E, 12 CFR 205

#1 - I'm pretty clear on the Reg CC stuff, but when it refers to Reg J and state laws (the UCC), isn't it merely referring to understanding the "normal" rules for collection, presentment, and endorsement - i.e., why is it different because of RDC? I am hitting a brick wall trying to understand what they are asking us to assess here.

#2 - I am also having trouble finding any information regarding "least cost routing" that is mentioned in paragraph two. Wouldn't we, as the institution allowing RDC, have control over how the information is transmitted and settled (check collection vs. ACH)?