I am a management associate in a training program and my president has given me an interesting assignement to complete.

How long does a bank have to return a check that required two signatures and only one signature was present?

The amount of the check was approximately $130,000 and we had already paid the other bank. I originally thought Reg J 210.6 (c) which stated it was 2 years after the claim acrues. However, I was wrong. Please, include reference to Reg CC or UCC.

It's unlcear how providing you the answer with citations would assist in your training...start your UCC research using the term "midnight deadline."

Thank you for your guidance.

That is what I am searching for really, guidance. I have read the UCC sections 3 and 4 until I am blue in the face. My problem is that I don't know when to utilize the Reg CC, Reg J or UCC in this situation?

thanks again for your guidance.

Ok...I have a little deeper and think I may have come a little closer to the answer: 30 days after knowledge of breach of warranty (UCC 4.208(e)) ?

Try again. If the contract between the depositor and the bank states that two signatures are required (that means the bank agreed to the requirement, and it has no escape language in its contract), a missing signature is the legal equivalent to having no authorized signature.

Midnight deadline applies.

Now your decision is whether the customer is entitled to collect from you. That's a separate question.

To clarify, as I believe I mistated my question, the check was made payable to two companies. One company endorsed the check and deposited into their bank account titled with their company name only.

Our bank, after paying the depository bank, has realized it was improperly endorsed with only one company's endorsement and would like to return the check. How long do we have to return the check to the depository bank?

Thanks for the clarification.

Warranty claims for missing or forged endorsements must be brought within three years (shorter period in Florida and some other states).

The 30-day reference is to the time within which you must notify a warranting endorser once you are aware of the claim and have identified the warranting party. If you delay beyond the 30-day period, and the warranting party's losses become larger because of your delay, the warranting party's liability will be reduced by the amount of those increased losses.