Answer:
The payee's claim is not against your bank, it's against your customer for non-payment. Your customer is obligated to the payee until the payee gets paid, and that hasn't happened. The payee will give your customer an affidavit in support of the payee's claim.
Your customer will use the same affidavit to support its claim against you for erroneous payment of the check, and you will use it to support your claim against the depositary bank on its transfer and presentment warranties. If the depositary bank cannot recover the funds from the forger, it is left holding the bag, as it were.
Your claim cannot be pursued through the Fed. It must be bank-to-bank (or through attorneys), in a "without entry" claim. It will have to be filed within thirty days of your learning of the forged endorsement to preserve your rights against the depositary bank. If the depositary bank tries to stonewall you, you may have to talk to an attorney or consider filing suit.
First published on BankersOnline.com 3/15/10
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