Help! At this morning's Manager's Meeting we had a lengthly discussion on check imaging and how some customers insist on getting their original checks back. I asked if they would like documentation to show their customers imaging is accepted by IRS/Courts. Wouldn't you know... the file I made on this is no-where to be found.

Can someone point me in the right direction where this might be? I'm in the search mode on the internet and only seem to be picking up banks and credit unions across the nation who have check imaging.
Your help is greatly appreciated.

It should be located in your state law statutes.

Cheryle:

You can find this in the manuals provided by your compliance group under Negotiable Instruments as follows:

Truncated check statement for IRS procedures. The Internal Revenue Service has provided guidance on the circumstances under which a taxpayer might use secondary evidence to prove payment of an amount. A canceled check is normally sought. However, in the absence of a canceled check, an account statement may be used by the taxpayer to prove payment of an amount if the account statement shows the following:

a. The check number;

b. The amount of the check;

c. The name of the payee; and

d. The date the institution posted the check.

To be accepted as proof of payment, the account statement must exhibit a high degree of legibility and readability. See Rev. Proc. 92-71; 1992-2 CB 437.

Thank you Tina - this is what I needed. Merry Christmas.
Cheryle

Same to you Cheryle.

In Texas: Texas Business and Commerce Code §4.406 subsection (a), a statement of account must provide information “sufficient to allow the customer reasonably to identify the paid items.” The Uniform Commercial Code Comment to subsection (a) states, “If the bank supplies its customer with an image of the paid item, it complies with this standard. Subsection (b) provides that “If items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of seven years after receipt of the items.”

Now, as to whether these imaged checks will be allowed as evidence in a court at law, we need to look at Rule of Evidence 1004. This rule states that the original is not required, and other evidence of the contents of a writing, recording, or photograph is admissible if: (a) All originals are lost or have been destroyed, unless the proponent lost or destroyed them in bad faith. Since the bank is destroying the checks as part of its check imaging process, as allowed by the Business & Commerce Code, and not out of bad faith, the copy should be admitted.

Your state probably has this same rule of evidence. You should check it out.

Here's Alabama, Florida, and Georigia's opinion on the topic. It will be in your state law somewhere.

Alabama Law:
Section 5-4A-1
Certain records to be retained; disposition of records after retention for prescribed period; reproduction of records and books.
(a) Every bank shall retain its business records for such periods as may be prescribed by regulation adopted pursuant to Section 5-2A-9.
(b) Any bank may dispose of any records which have been retained for the period prescribed by the superintendent.
(c) Any bank may cause any or all books and records at any time in its custody and books and records relating to trusts, estates and other fiduciary accounts, to be reproduced by photostatic, photographic, or microphotographic process, or by any other generally recognized reproduction process, and reproduction so made, whether enlarged or not, shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

Florida

Chapter 655.91 Records of institutions and copies thereof; retention and destruction.-- (1) In this section, "records" of an institution means and includes all books of account and other books of every kind, journals, ledgers, statements, instruments, documents, files, messages, writings of every kind, and other internal or other data and other information of every description, made or received by an institution in the regular course of its business or otherwise, regardless of the mode in which it is recorded. (2) Institutions need not preserve or retain any of their records or copies thereof for a period longer than is expressly required by an applicable statute or rule or regulation of this state or the United States which identifies, either specifically or by type or category, the relevant records or copies thereof or, if there is no such statute or rule or regulation which specifies a retention period applicable to the records or copies thereof, for a period longer than 5 years. An institution may destroy any of its records or copies thereof after the expiration of the retention period determined as provided in this subsection. (3) No liability shall accrue against any institution because of the destruction of any of its records or copies thereof as permitted by subsection (2), and in any judicial or other action or proceeding in which any such records or copies thereof may be called in question or be demanded of the institution or any officer or employee thereof, a showing that such records or copies thereof have been destroyed in accordance with the provisions of subsection (2) is a sufficient excuse for the failure to produce them. (4) Any institution may at any time make, or cause to be made, a copy or copies of any or all of its records, and any such copy duly certified, authenticated, or identified by a responsible officer or agent of the institution under whose supervision the records or copies are kept shall, in all cases and in all courts and places, be admitted and received as evidence with a like force and effect as the original record, whether or not the original is in existence. (5) The original of any record of an institution includes the data or other information comprising a record stored or transmitted in or by means of any electronic, computerized, mechanized, or other information storage or retrieval or transmission system or device which can upon request generate, regenerate, or transmit the precise data or other information comprising the record; and an original also includes the visible data or other information so generated, regenerated, or transmitted if it is legible or can be made legible by enlargement or other process. (6) Copies of records of an institution, heretofore or hereafter made, include duplicates or counterparts of an original produced from the same impression or process as the original by carbon or other chemical or substance or process; negative and positive film and prints of an original or copy and reproductions and facsimiles of an original or copy, whether or not the same size, produced by photographic, microphotographic, photostatic, xerographic, electronic, computerized, or mechanized process, or by any other process, and enlargements and reductions thereof; and the data or other information comprising a record stored or transmitted as provided in subsection (5), and the visible data or other information generated or regenerated or transmitted by such information storage or retrieval or transmission system or device, if it is legible or can be made legible by enlargement or other process. History.--s. 57, ch. 92-303.

Georgia Law:
10-12-4. (a) Records and signatures shall not be denied legal effect or validity solely on the grounds that they are electronic. (b) In any legal proceeding, an electronic record or electronic signature shall not be inadmissible as evidence solely on the basis that it is electronic. (c) When a rule of law requires a writing, an electronic record satisfies that rule of law. (d) When a rule of law requires a signature, an electronic signature satisfies that rule of law. (e) When a rule of law requires an original record or signature, an electronic record or electronic signature shall satisfy such rule of law. (f) Nothing in this Code section shall prevent a party from contesting an electronic record or signature on the basis of fraud. (g) Nothing in this Code section shall relieve any party to a legal proceeding from complying with applicable rules of evidence requiring authentication or identification of a record or signature as a condition precedent to its admission into evidence. (h) Where the authenticity or the integrity of an electronic record or signature is challenged in a court of law, the proponent of the electronic record or signature shall have the burden of proving that the electronic record or signature is authentic. (i) Notwithstanding the preceding subsections of this Code section, the legal validity, effect, and admissibility of electronic records and electronic signatures shall be limited as follows: (1) Each department, agency, authority, or instrumentality of the state or its political subdivisions shall determine how and the extent to which it will create, send, receive, store, recognize, accept, be bound by, or otherwise use electronic records or electronic signatures. Nothing in this chapter shall be construed to require any department, agency, authority, or instrumentality of the state or its political subdivisions to create, send, receive, store, recognize, accept, be bound by, or otherwise use electronic records or electronic signatures; (2) A consumer shall not be required to create, send, receive, recognize, accept, be bound by, or otherwise use electronic records or electronic signatures without such consumer's consent. This paragraph shall apply to natural persons when engaged in transactions involving money, property, or services primarily used for household purposes; and (3) The provisions of this Code section shall not apply to any rule of law governing the creation or execution of a will or testamentary or donative trust, living will, or health care power of attorney, or to any record that serves as a unique and transferable physical token of rights and obligations, including, without limitation, negotiable instruments and instruments of title wherein possession of the instrument is deemed to confer title. (j) Any rule of law which requires a notary shall be deemed satisfied by the secure electronic signature of such notary. (k) Even when a statute, regulation, or other rule of law specifies a particular type of record other than an electronic record or a particular type of signature other than an electronic signature, this chapter shall control to permit the use of electronic records and electronic signatures in the circumstances otherwise governed by such statute, regulation, or other rule of law, unless such statute, regulation, or other rule of law expressly refers to and limits the application of this chapter.

Wow!

You just don't know how many times it's been necessary to have those rules all in one place. There's always someone who doesn't believe you when you tell them electronic will work.

Once you look it up, make sure you keep it in a place that readily accessible. Questions will come up from bank personnel and your customers until everyone is used to the process.

Wow! And to think all I was worried about was California.

"secure electronic signature of notary"

Not being a notary, what is that and how does it work?