Gold Book: The Check Reclamation Guide

Section 9: Glossary

Abandonment
A process used by FMS to terminate the check reclamation because the financial institutionís liability for the reclamation was deemed inappropriate.

Check reclamation
A procedure used by FMS to obtain a refund from a financial institution when a U.S. Treasury check is presented for payment over a forged or unauthorized endorsement.

Cumulative Notice of Discharged Debt
A monthly report that notifies the financial institution of any canceled debt that is reported to the Internal Revenue Service.

Direct Debit
A process that debits the financial institutionís Federal Reserve master account for the full amount of the reclamation on the 31st calendar day provided the financial institution has not submitted a protest and has not paid the reclamation by an authorization before the 30th calendar day from the reclamation date.

Federal Agency
Any United States Federal Government agency.

Federal Reserve Bank
Serves as the nation's central bank. Functions include the handling of federal government deposits and checks; transferring funds through the Automated Clearing House network and Fedwire; and supervising and regulating federally chartered financial institutions.

FedMail
Fedmail is an application that receives large files for distribution via e-mail, Connect:Direct (C:D) or fax to financial institutions depending on how the financial institution prefers to receive the information.

Financial Institution
A bank, savings bank, savings and loan institution association, credit union or similar institution.

Master Account
The record of financial rights and obligations of an account holder and the Federal Reserve Bank with respect to each other, where opening, intraday, and closing balances are determined.

Offset
A collection method in which the federal government withholds funds payable by the United States to the financial institution and applies the withheld funds to a debt owed to the U.S. federal government. The Financial Management Service (FMS) may initiate an offset to collect a reclamation debt by referring the debt to the Treasury Offset Program or to another federal agency currently making payments to the presenting financial institution.

In addition, FMS may direct the Federal Reserve Bank to withhold credits from presenting financial institutions for application to a delinquent reclamation debt, a process known as Treasury Check Offset. Funds payable by the United States that may be offset include federal tax refunds, vendor payments, and credits from the Federal Reserve Bank for a Treasury check.

Presenting financial institution
A financial institution that directly presents checks to a Federal Reserve Bank and receives credit from the Federal Reserve for the check payment;

or

A depositary which is authorized to charge checks directly to Treasury's General Account and present them to the Department of the Treasury for payment through a designated Federal Reserve Bank.

Protest
A written statement to the Financial Management Service requesting a review of its decision that the financial institution is liable for a check reclamation. It raises a valid legal or factual question and includes any supporting documentation which proves the financial institution is not liable.

Reclamation Date
The date the Request for Refund (Check Reclamation) and/or the Notice of Direct Debit (U.S. Treasury Check Reclamation) was prepared.

Request for Refund (Check Reclamation) or Notice of Direct Debit (U.S. Treasury Check Reclamation)
Initial notice sent to the presenting financial institution advising it of the amount due and the reason for the reclamation.

Summary of Debt Statement
A follow-up notice sent to the presenting financial institution listing their outstanding check reclamation debts.


   Last Updated:  March 14, 2014