Gold Book: The Check Reclamation Guide

Section 7: Legal Basis

Regulations for Electronic Funds Transfer do not apply to checks.

Introduction: This section cites the laws and regulations governing the check reclamation process.

Title 31

31 U.S.C. 3712

  • Establishes FMS's right to demand a refund from a presenting financial institution when, after the check is paid, forgery is established or the payee's entitlement stopped with his/her death.
  • Establishes Treasury Check Offset.

31 U.S.C. 3701-3720E

  • Establishes the government's right to collect debts using various collection tools, including offset.
  • Establishes the rates at which a federal agency must assess interest, penalties, and administrative fees on delinquent debts.

31 CFR 240

  • Establishes the process by which FMS will directly debit a financial institutions federal reserve master account for the full amount of the reclamation if not paid or protested by the 30th calendar day from the reclamation date.
  • Establishes the process by which FMS will add interest, penalties and administrative fees to delinquent reclamation debts.
  • Establishes the process by which FMS will refer reclamation debts for collection by offset.
  • Establishes that FMS will take such action as may be necessary to collect delinquent reclamation debts.

Title 4

4 CFR Part 102

  • Standards for federal agencies when collecting by offset.
  • Rates at which a federal agency must assess interest, penalties and administrative fees.

Limited Payability: The Competitive Equality Banking Act of 1987 (Public Law 100-86), referred to as Limited Payability, significantly reduced the time period for…

  • Negotiating U.S. Treasury checks to one year from the check issue date.
  • Filing non-receipt claims to one year from the check issue date.
  • Initiating a reclamation action against the presenting financial institution to one and a half years from the date the check is paid.

Exception: In cases of deceased payees, reclamation action must begin within one year from the date the check is paid.


   Last Updated:  March 14, 2014