12 U.S.C. § 5007: Expedited recredit procedures for banks

the claimant bank (or a bank that the claimant bank has indemnified) has received a claim for expedited recredit from a consumer under section 5006 of this title with respect to a substitute check or would have been subject to such a claim had the consumer’s account been charged; the claimant bank has suffered a resulting loss or is obligated to recredit a consumer account under section 5006 of this title with respect to such substitute check; and production of the original check, another substitute check, or a better copy of the original check is necessary to determine the validity of the charge to the customer account or any warranty claim connected with such substitute check. Any claim under paragraph (1) may be submitted by the claimant bank to an indemnifying bank before the end of the 120-day period beginning on the date of the transaction that gave rise to the claim. the claim, including an explanation of why the substitute check cannot be properly charged to the consumer account; or the warranty claim; a statement that the claimant bank has suffered a loss or is obligated to recredit the consumer’s account under section 5006 of this title , together with an estimate of the amount of the loss or recredit; the reason why production of the original check, another substitute check, or a better copy of the original check is necessary to determine the validity of the charge to the consumer account or the warranty claim; and information sufficient for the indemnifying bank to identify the substitute check and to investigate the claim. mistaken for the legal equivalent of the check under section 5003(b) of this title ; or sent or handled by any bank, including the indemnifying bank, as a forward collection or returned check. An indemnifying bank may, in the discretion of the bank, require the claimant bank to submit the information required by paragraph (1) in writing, including a copy of the written or electronically submitted claim, if any, that the consumer provided in accordance with section 5006(b) of this title . An indemnifying bank that requires a submission of information under subparagraph (A) may permit the claimant bank to make the submission electronically, if the claimant bank has agreed to communicate with the indemnifying bank in that manner. accurately represents all of the information on the front and back of the original check (as of the time the original check was truncated); or is otherwise sufficient to determine the bank’s claim is not valid; and recredit the claimant bank for the amount of the claim up to the amount of the substitute check, plus interest if applicable; or provide information to the claimant bank as to why the indemnifying bank is not obligated to comply with subparagraph (A) or (B). Providing a recredit under this subsection to a claimant bank with respect to a substitute check shall not absolve the indemnifying bank from liability for claims brought under any other law or from additional damages under section 5005 or 5009 of this title with respect to such check. If a claimant bank reverses, in accordance with section 5006(e) of this title , a recredit previously made to a consumer account under section 5006(c) of this title , or otherwise receives a credit or recredit with regard to such substitute check, the claimant bank shall promptly refund to any indemnifying bank any amount previously advanced by the indemnifying bank in connection with such substitute check. If the indemnifying bank provides the claimant bank with the original check or a copy of the original check (including an image or a substitute check) under subsection (c)(1)(A), section 5005(d) of this title shall govern any right of the indemnifying bank to any repayment of any funds the indemnifying bank has recredited to the claimant bank pursuant to subsection (c).