Fed Targets Year-end for Check 21 Proposed Regulation
WASHINGTON-The Federal Reserve Board began developing the implementing regulations of the Check Clearing for the 21st Century Act (Check 21) less than a week after it was signed into law. As the proposed regulation is being drafted, CUNA has been invited by the Fed to provide input on the language. The group also plans to comment during the official public comment period. The regulation will include model disclosure language to use in notifying consumers of their rights under the law, according to a statement from the Fed. The proposed rule is expected to be out before the end of the year with a 60-day comment period, according to CUNA Assistant General Counsel Michelle Profit. The law had a one-year effective date, making it Oct. 28, 2004. Check 21 was drafted to foster innovation in the payment system and enhancing efficiency. The law does not require financial institutions to send or accept electronic checks.