Preparing For Canadian Cheque Image Exchange · 15/10/2015 · Bill of Exchange – Canadian Payments Act - Establishes the ... Preparing For Canadian Cheque Image Exchange Oct.
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
NOTICESThis presentation may provide an introduction to or summary of variousaspects of check payments and the legal and rules framework for checkimage exchange in the U.S. and Canada. Responsibility for compliance withimage exchange rules, and/or the legal, operational and regulatoryrequirements applicable to check image exchange, remains at all times withthe financial institution participating in check image exchange and/or theindividual or company using a check image exchange service.
This presentation and the information contained herein is not intended aslegal or compliance advice or recommendation to any person or company.This document could include technical inaccuracies or typographical errorsand individual users are responsible for verifying any information found in thispresentation.
Financial institutions should consult with their legal counsel regarding legaland operational requirements applicable to any check image exchangeprogram they may offer or in which they participate.
In the event of a conflict between this presentation and information obtained from the Canadian Payments Association (CPA), the CPA rules will govern.
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Overview of Canadian Banking• Cheque Image Transformation• Status of Canadian FI Progress• Characteristics of Processing• Approved ECCHO Rules for Clearing in
U.S.
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Overview of Canadian Banking
ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
– IS - The operating body that governs payments clearing and settlement in Canada at a national level• Manages the central settlement system (ACSS) for
cheque and EFT• Manages the network for exchange of EFT and will
be available for exchange of Image Captured Payment (ICP) files
– IS NOT - A standards development organization• Provides standards specific to its mandate,
supporting its members in participating in the national payments process and owns the standards
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Canadian Payments Association Image Rule Project– Phase III – March 2012 – approved amendments to
rule A10 related to creation and use of Clearing Replacement Documents (CRD) effective Oct 1, 2012
– Phase IV – June 2013 – approved final rule amendments to allow Direct Clearers to exchange electronic payment files containing Image Captured Payments (ICP) with partner that has agreed to participate in ICP Exchange, effective August 12, 2013
• ICP Standard 015 – Companion Document to X9.100-187
• Bilateral Agreements
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Retain aspects of Current Process• CRD and RRD Print Capability • Infrastructure Changes• Single Electronic Processing Site• Preparing for All Source Channel Capture• Preparing for Image Exchange• National Clearing (Optional)
– Cash letter per region included in one ICP (X9)• Preparing for Day 2• Movement Away from Outsourcing
– 3 of largest moving to in-house– 2 of largest moving to new outsource provider– Technical and, more importantly, Operational Impact
Several FIs in full production (with CRD print), others preparing for full deployment in early 2016
Mobile RDC Three FIs are in production (with CRD print), most other major FIs have projects underway for 2016 implementation
Branch One FI - teller capture implemented by October, 2015. One FI - back counter completed in November, 2015. Others have projects in place, including both teller and back counter solutions for completion in 2016 and 2017.
Image ATM Two FIs in deployment with completion in 2016. Others preparing for roll out in early 2016. A few FIs will keep current paper processing in place for now
Image Exchange
Two FIs will begin in October 2015 with a third to beginprior to year-end. Most plan to begin exchanging some volume in 2016
Northbound ICL Several FIs are accepting X9 and printing CRDs
Southbound ICL Some FIs will continue clearing southbound cheques using commercial RDC products through US FIs or print IRDs
ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Standards– Northbound: Companion Document follow Standard 015– Southbound: Companion Document follow X9.100-187– BiTonal image: 200 dpi in tiff - standard to both countries
• R/T Format– Retain “dash” in RT Fields ex. 12345-010 In Record 25
• US Dollar vs Canadian Dollar Funded Accounts– Both have XXXXX-YYY RT format– US Dollar Funded Accounts: “45” in tran code field
• See appendix A for list of other characteristics
– US Dollar Funded Accounts: Canadian Funded Accounts – “Hand-written” – US FUNDS
– Canadian Cheques without TC 45 will likely require operator review for proper designation
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Definitions for Exchange of Images of Canadian Items– Canadian Item– Canadian Correspondent FI– Canadian Paper Return Item– Canadian Paying FI– Canadian Law– Gateway Receiving Bank
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ECCHOInsights: Preparing For Canadian Cheque Image Exchange Oct. 15, 2015
• Depositing customer agreement required– If RDC, destroy original check within 120 days
• Rules do not cover RDC– Type of item customer will receive for return– Prohibition of redeposit without permission– Reg CC availability not apply to foreign
checks– Responsible for check deposit relationship
with customer– Review current terms of account agreement
• Rejection, return and correction or adjustment of Images of Canadian Items– Return or reject prior to Canada or by Canadian FI– Reg CC and Code return timeframes not apply– May return Image or Canadian Paper Return to FI
that previously sent and maintain return reason codes– Return or reject sent to Member originally transmitted
or to other Member that agrees to receive return or reject
– If Gateway Receiving Bank returns paper return, other Members maintain in paper form during return process
– Only subsequent exchange of returned items if instructed or eligible under Canadian Law
• Review the following excerpts for more specific information on the identification of the various currency designations when dealing with Canadian cheques– Standard 006 – page 53