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Gold Book: The Check Reclamation Guide

Section 2: Notice of Direct Debit (U. S. Treasury Check Reclamation)

Introduction: The Request for Refund (Check Reclamation) has been renamed the Notice of Direct Debit (U.S. Treasury Check Reclamation). The Request for Refund (Check Reclamation) was sent to financial institutions for reclamations initiated prior to October 19, 2011. All reclamations initiated on and after October 19, 2011 will be sent to the financial institution via a Notice of Direct Debit (U.S. Treasury Check Reclamation). This document contains instructions for processing the Notice of Direct Debit (U.S. Treasury Check Reclamation).

The presenting financial institution will receive...

  • An initial Notice of Direct Debit (U.S. Treasury Check Reclamation); and as necessary,
  • A Summary of Debt Statement.

The Notice of Direct Debit (U.S. Treasury Check Reclamation), the Summary of Debt Statement and other related check reclamation reports are generated by FMS and transmitted through FRB FedMail to the financial institution.

In this section: This section consists of the following topics:

  • The Notice of Direct Debit (U.S. Treasury Check Reclamation)
  • How to Respond to the Notice of Direct Debit (U.S. Treasury Check Reclamation)
  • Summary of Debt Statement
  • Reclamation Status Codes

Notice of Direct Debit (U.S. Treasury Check Reclamation)

Sample: Below is a sample of the Notice of Direct Debit (U.S. Treasury Check Reclamation):

sample request for refund

Purpose: The Notice of Direct Debit (U.S. Treasury Check Reclamation) is the initial notice sent to the presenting financial institution advising it of the amount requested and reason for the reclamation action. A copy of the payee's claim, if applicable, will be included with the Notice of Direct Debit (U.S. Treasury Check Reclamation). Note: If FMS furnishes a sequence number and deposit date, then a check image will not be provided.

How to Respond to the Notice of Direct Debit (U.S. Treasury Check Reclamation)

Response Time: Financial institutions have 30 calendar days from the date of the Notice of Direct Debit (U.S. Treasury Check Reclamation) to make full payment or submit a protest to FMS to avoid the direct debit on their Federal Reserve master account. However, if a bank protest has been submitted within 30 calendar days from the reclamation date, and the reclamation has not been paid, the following fees will be added to the principal amount of the reclamation. These fees will also be added to the principal amount of a reclamation that was initiated prior to October 19, 2011 that has not been paid by the 60th calendar day.

Interest Accrual
Interest will begin to accrue on the 61st day after the reclamation date. It will continue to accrue until the reclamation is paid in full by the financial institution or the reclamation action is abandoned by FMS.

Administrative Fees
Beginning on the 61st day from the reclamation date an additional administrative fee per month per delinquent reclamation will be charged. The administrative fee will continue to be charged each month until the reclamation is either paid in full by the financial institution or the reclamation action is abandoned by FMS. This fee covers the administrative costs Treasury incurs as a result of the delinquent debt.

Penalty
Penalty charges will begin to accrue on the 91st day after the reclamation date. Penalty charges will continue to accrue until the reclamation is either paid in full by the financial institution or the reclamation action is abandoned by FMS.

Procedure: The table below shows how the financial institution should respond to a Notice of Direct Debit (U.S. Treasury Check Reclamation).

Step Action
1 Verify all information on the Notice of Direct Debit (U.S. Treasury Check Reclamation)

If there is any erroneous information, then the financial institution may protest the reclamation action. Protests.
2
  • Authorize the Federal Reserve Bank of Philadelphia to debit the financial institution's Federal Reserve master account for the total amount due. (This is the preferred method for paying the check reclamation.)
Include interest, penalty and administrative fees that appear on the Summary of Debt Statement for that reclamation item, as applicable.
3 Authorizations can be sent to the Federal Reserve Bank of Philadelphia by:
Fax: (215)574-4163
Email: reclamations@phil.frb.org
Or: Fedline Web Access Solution

DO NOT SEND AUTHORIZATIONS TO THE FINANCIAL MANAGEMENT SERVICE.
4 A copy of the Notice of Direct Debit should be retained in the financial institution files.

Summary of Debt Statement

Sample: Below is a sample of the Summary of Debt Statement. Click here for larger view.

sample of a Summary of Debt Statement

Purpose: The Summary of Debt Statement is a follow-up notice sent to the presenting financial institution. It includes the following for each outstanding reclamation listed on the Notice of Direct Debit (U.S. Treasury Check Reclamation):

  • Identifying check information
  • Reclamation information
  • Additional charges associated with the reclamation (interest, penalties, and administrative fees)
  • Status of reclamation

Multi-part form: The Summary of Debt Statement consists of the following parts:

  • Listing of outstanding reclamation(s) and associated information
  • FMS Collection Regulations
  • Explanation of columns on the Summary of Debt Statement

Column explanation: The table below describes the type of information included in each column on the Summary of Debt Statement.

Reference No. Column Explanation
1-2 Check Sym/Serial Check Symbol number and Check Serial number appearing on the check for which there is a reclamation action.
3 Payee Name Name of the person to whom the check was issued for which there is a reclamation action.

4

 Reclamation Date Date shown on the Notice of Direct Debit (U.S. Treasury Check Reclamation).
5 Reclamation Status Code (Headed with the designation of "S" on the Summary of Debt Statement) Current status of the reclamation by code.

Refer to Reclamation Status Codes.)
6 Reclamation Number Request number which appears on the Notice of Direct Debit (U.S. Treasury Check Reclamation).
7 Reclamation Principal Reclamation amount due which appears on the Notice of Direct Debit (U.S. Treasury Check Reclamation).
8 Interest Rate Interest rate being charged on the item because it has remained unpaid for over 60 days.

Note: The rate of interest assessed is the rate of the current value of funds of the U.S. Treasury. Although the interest rate varies, the initial rate charged on reclamation is the rate that remains until it is paid.
9 Interest Due Amount of interest due per item as of the current Summary of Debt Statement.
10 Penalty Due Penalty charges due per item as of the current Summary of Debt Statement.

Note: Penalty is calculated at 6% per annum and does not vary. It is assessed at the 91st day.
11 Admin Fee Due Administrative fee due per item as of the current Summary of Debt Statement.

TThe amount is based on the cost to the U.S. Federal Government for the collection of delinquent items and is assessed at the 61st day.
12 Total Amount Due Total of the...
  • reclamation principal
  • interest due
  • penalty due
  • administrative fee due
as of the current Summary of Debt Statement

Reclamation Status Codes

Introduction: Items appearing on the Notice of Direct Debit (U.S. Treasury Check Reclamation) that have been protested may be annotated by the letter “B” in the Reclamation Status column on the Summary of Debt Statement.

Codes: The table below shows the reclamation status codes and what each code means when it is used on the Summary of Debt Statement.

CODE IDENTIFIES items...
A at least 30 days old

Note: Items will become eligible for offset at 120 days if payment is not received by FMS prior to the 25th day of the month in which the Summary of Debt statement is received.
B for which a protest is being considered.

Note: This code will remain on the statement and additional charges WILL continue to accrue until the protest is resolved. "B" coded items are not eligible for offset.

To view security features of the Treasury Check please click here(1.2 mb)

   Last Updated:  November 09, 2012

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