---
kind: "section"
citation: "12 U.S.C. § 5002"
title: "12"
title_heading: "Banks and Banking"
number: "5002"
heading: "Definitions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5002"
units:
  - "Chapter 50 — Check Truncation"
---

# §5002. Definitions


For purposes of this chapter, the following definitions shall apply:

- (1) **Account—** The term “account” means a deposit account at a [bank](#2).
- (2) **Bank—** The term “bank” means any [person](#14) that is located in a [State](#17) and engaged in the business of banking and includes—
  - (A) any [depository institution](/usc/12/1861.md?p=b-4) (as defined in [section 461(b)(1)(A) of this title](/usc/12/461.md?p=b-1-A));
  - (B) any Federal reserve [bank](#2);
  - (C) any Federal home loan [bank](#2); or
  - (D) to the extent it acts as a payor—
    - (i) the Treasury of the United States;
    - (ii) the United States Postal Service;
    - (iii) a [State](#17) government; or
    - (iv) a unit of general local government (as defined in [section 4001(24) of this title](/usc/12/4001.md?p=24)).
- (3) **Banking terms—**
  - (A) **Collecting bank—** The term “collecting bank” means any [bank](#2) handling a [check](#6) for collection except the [paying bank](#3-C).
  - (B) **Depositary bank—** The term “depositary bank” means—
    - (i) the first [bank](#2) to which a [check](#6) is transferred, even if such [bank](#2) is also the [paying bank](#3-C) or the payee; or
    - (ii) a [bank](#2) to which a [check](#6) is transferred for deposit in an [account](#1) at such [bank](#2), even if the [check](#6) is physically received and indorsed first by another [bank](#2).
  - (C) **Paying bank—** The term “paying bank” means—
    - (i) the [bank](#2) by which a [check](#6) is payable, unless the [check](#6) is payable at or through another [bank](#2) and is sent to the other [bank](#2) for payment or collection; or
    - (ii) the [bank](#2) at or through which a [check](#6) is payable and to which the [check](#6) is sent for payment or collection.
  - (D) **Returning bank—**
    - (i) **In general—** The term “returning bank” means a [bank](#2) (other than the paying or [depositary bank](#3-B)) handling a returned [check](#6) or notice in lieu of return.
    - (ii) **Treatment as collecting bank—** No provision of this chapter shall be construed as affecting the treatment of a [returning bank](#3-D-i) as a [collecting bank](#3-A) for purposes of section 4–202(b) of the [Uniform Commercial Code](#19).
- (4) **Board—** The term “Board” means the Board of Governors of the Federal Reserve System.
- (5) **Business day—** The term “business day” has the same meaning as in [section 4001(3) of this title](/usc/12/4001.md?p=3).
- (6) **Check—** The term “check”—
  - (A) means a draft, payable on demand and drawn on or payable through or at an office of a [bank](#2), whether or not negotiable, that is handled for [forward collection](#10) or return, including a [substitute check](#16) and a travelers [check](#6); and
  - (B) does not include a [noncash item](#13) or an item payable in a medium other than United States dollars.
- (7) **Consumer—** The term “consumer” means an individual who—
  - (A) with respect to a [check](#6) handled for [forward collection](#10), draws the [check](#6) on a [consumer account](#8); or
  - (B) with respect to a [check](#6) handled for return, deposits the [check](#6) into, or cashes the [check](#6) against, a [consumer account](#8).
- (8) **Consumer account—** The term “consumer account” has the same meaning as in [section 4001(10) of this title](/usc/12/4001.md?p=10).
- (9) **Customer—** The term “customer” means a [person](#14) having an [account](#1) with a [bank](#2).
- (10) **Forward collection—** The term “forward collection” means the transfer by a [bank](#2) of a [check](#6) to a [collecting bank](#3-A) for settlement or the [paying bank](#3-C) for payment.
- (11) **Indemnifying bank—** The term “indemnifying bank” means a [bank](#2) that is providing an indemnity under [section 5005 of this title](/usc/12/5005.md) with respect to a [substitute check](#16).
- (12) **MICR line—** The terms “MICR line” and “magnetic ink character recognition line” mean the numbers, which may include the [bank](#2) routing number, [account](#1) number, [check](#6) number, [check](#6) amount, and other information, that are printed near the bottom of a [check](#6) in magnetic ink in accordance with generally applicable industry standards.
- (13) **Noncash item—** The term “noncash item” has the same meaning as in [section 4001(14) of this title](/usc/12/4001.md?p=14).
- (14) **Person—** The term “person” means a natural person, corporation, unincorporated company, partnership, government unit or instrumentality, trust, or any other entity or organization.
- (15) **Reconverting bank—** The term “reconverting bank” means—
  - (A) the [bank](#2) that creates a [substitute check](#16); or
  - (B) if a [substitute check](#16) is created by a [person](#14) other than a [bank](#2), the first [bank](#2) that transfers or presents such [substitute check](#16).
- (16) **Substitute check—** The term “substitute check” means a paper reproduction of the original [check](#6) that—
  - (A) contains an image of the front and back of the original [check](#6);
  - (B) bears a [MICR line](#12) containing all the information appearing on the [MICR line](#12) of the original [check](#6), except as provided under generally applicable industry standards for [substitute checks](#16) to facilitate the processing of [substitute checks](#16);
  - (C) conforms, in paper stock, dimension, and otherwise, with generally applicable industry standards for [substitute checks](#16); and
  - (D) is suitable for automated processing in the same manner as the original [check](#6).
- (17) **State—** The term “State” has the same meaning as in [section 1813(a) of this title](/usc/12/1813.md?p=a).
- (18) **Truncate—** The term “truncate” means to remove an original paper [check](#6) from the [check](#6) collection or return process and send to a recipient, in lieu of such original paper [check](#6), a [substitute check](#16) or, by agreement, information relating to the original [check](#6) (including data taken from the [MICR line](#12) of the original [check](#6) or an electronic image of the original [check](#6)), whether with or without subsequent delivery of the original paper [check](#6).
- (19) **Uniform Commercial Code—** The term “Uniform Commercial Code” means the Uniform Commercial Code in effect in a [State](#17).
- (20) **Other terms—** Unless the context requires otherwise, the terms not defined in this section shall have the same meanings as in the [Uniform Commercial Code](#19).

## Source credit

(Pub. L. 108–100, § 3, Oct. 28, 2003, 117 Stat. 1178.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in text, was in the original “this Act”, meaning Pub. L. 108–100, Oct. 28, 2003, 117 Stat. 1177, which is classified generally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 5001 of this title and Tables.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective at the end of the 12-month period beginning on Oct. 28, 2003, see section 20 of Pub. L. 108–100, set out as a note under section 5001 of this title.