CUNA Mutual Group Risk Alert: Remote Deposit Capture Indemnity Provision Effective July 1, 2018

A significant risk associated with remote deposit capture (RDC) has been duplicate presentments of checks. Regulation CC’s (Reg CC) new RDC indemnity provision is designed to reduce losses from duplicate presentments; however, it increases risk for credit unions offering this service.

Watch our recorded webinar (33:05), Remote Deposit Capture & Regulation CC’s Indemnity Provision, to learn more about the RDC indemnity provision, understand steps you can take to reduce risk, and learn what mobile RDC vendors are doing to help you mitigate risks.

The RDC indemnity provision in §229.34(f) is designed to protect a depositary institution that accepts an original paper check that is returned unpaid to that institution due to being previously deposited to another institution via RDC. However, the indemnity would not apply if the original paper check contains a restrictive endorsement, such as “for mobile deposit only” plus the depositary institution’s name to which it is being deposited.

For example:

  • A member deposits a check to the credit union via RDC (the original paper check is not restrictively endorsed).
  • The member subsequently deposits the original paper check at another financial institution.
  • The original paper check is returned unpaid to the second institution due to being previously deposited to the credit union via RDC.
  • The other institution makes an indemnity claim against the credit union under §229.34(f), Remote Deposit Capture Indemnity, and the credit union reimburses the other institution. The Federal Reserve Board’s reasoning in adopting the indemnity is depositary institutions offering RDC are in the best position to minimize potential fraud by conducting customer due diligence to qualify for RDC.

Risk Mitigation
Learn more about critical loss controls and what mobile RDC vendors are doing to help you manage the risk created by the RDC indemnity provision in Reg CC by viewing our recorded webinar, Remote Deposit Capture & Regulation CC’s Indemnity provision, which is available in the Protection Resource Center.

Risk Prevention Resources
Access CUNA Mutual Group’s Protection Resource Center at for exclusive risk and compliance resources to assist with your loss control. The Protection Resource Center requires a User ID and password. To learn more about risks and loss controls related to Remote Deposit Capture, review these resources: