---
kind: "section"
citation: "31 C.F.R. § 240.6"
title: "31"
number: "240.6"
heading: "Provisional credit; first examination; declination; final payment."
url: "https://uscodex.org/cfr/31/240.6"
---

# §240.6. Provisional credit; first examination; declination; final payment.

- (a) Any credit issued by a Federal Reserve Bank to a financial institution shall be a provisional credit until Treasury completes first examination of the check, or as provided in [paragraph (d)](#d) of this section.
- (b) Treasury shall have the right as a drawee to complete first examination of checks presented for payment, to reconcile checks, and, when appropriate, to make a declination on any check.
- (c) Treasury will decline payment on a check when first examination by Treasury establishes that:
  - (1) The check has a material defect or alteration;
  - (2) The check bears a forged or unauthorized drawer's signature;
  - (3) Treasury has already received presentment of a substitute check, electronic check, or original check relating to the check being presented, such that Treasury is being requested to make payment on a check it has already paid; or Treasury is being requested to make payment on a check that is not valid due to a stop payment or other cancellation.
  - (4) In the case of an electronic check, Treasury cannot determine whether the check contains a material defect or alteration without examining the original check or a better quality image of the check and Treasury is on notice of a question of law or fact about whether the check is properly payable; or
  - (5) In the case of a substitute check, Treasury has a warranty or indemnity claim arising under 12 CFR [229.52](/cfr/12/229.52.md) or [229.53](/cfr/12/229.53.md).
- (d) Treasury shall have a reasonable amount of time to complete first examination. However, except as provided in [paragraph (e)](#e) of this section, if Treasury has not declined payment on a check within 60 days after the check is presented to a Federal Reserve Processing Center for payment, Treasury will be deemed to have made final payment on the check.
- (e) Notwithstanding the provisions of [paragraph (d)](#d) of this section, in accordance with [31 U.S.C. 3328(a)(2)](/usc/31/3328.md?p=a-2), if, upon presentment for payment, Treasury is on notice of a question of law or fact about whether a check is properly payable, Treasury may defer final payment until the question is settled.
- (f) If a Federal Reserve Bank debits a financial institution's reserve account as a result of an erroneous declination, Treasury will promptly refund the amount of the payment.

## Notes

### Amendments

[69 FR 61568, Oct. 19, 2004, as amended at 88 FR 74889, Nov. 1, 2023]

### Authority

Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 321, 3327, 3328, 3331, 3334, 3343, 3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 318 U.S. 363 (1943).

### Source

Source: 69 FR 61568, Oct. 19, 2004, unless otherwise noted.

### Amendments

[69 FR 61568, Oct. 19, 2004, as amended at 88 FR 74889, Nov. 1, 2023]