Which regulation establishes procedures for the interbank system of collecting checks and wire transfers?

Which regulation establishes procedures for the interbank system of collecting checks and wire transfers?

• A. Regulation E
• B. Regulation D
• C. Regulation J
• D. OCC 235

Answer: (C)

Regulation J is the correct answer because it specifically governs the procedures for the collection and return of checks and wire transfers within the interbank system. This regulation outlines the framework through which the Federal Reserve Banks operate as clearinghouses, facilitating the settlement of these transactions between banks. Regulation J addresses the responsibilities and liabilities of both collecting banks and paying banks, ensuring that there is a uniform procedure across the banking system for the processing of these items. Regulation E, while related to electronic funds transfers, does not cover check collection and wire transfer processes in the same way as Regulation J. Regulation D deals primarily with reserve requirements and may impact the liquidity of banks but does not govern the collection procedures for checks and wire transfers. OCC 235 does not provide a regulatory framework for interbank transactions; rather, it is more focused on the operations and lending authority of federally chartered banks under the Office of the Comptroller of the Currency. Thus, Regulation J stands out in specifically covering the interbank system for collecting checks and wire transfers, making it the correct choice.

Regulation J is the correct answer because it specifically governs the procedures for the collection and return of checks and wire transfers within the interbank system. This regulation outlines the framework through which the Federal Reserve Banks operate as clearinghouses, facilitating the settlement of these transactions between banks. Regulation J addresses the responsibilities and liabilities of both collecting banks and paying banks, ensuring that there is a uniform procedure across the banking system for the processing of these items.

Regulation E, while related to electronic funds transfers, does not cover check collection and wire transfer processes in the same way as Regulation J. Regulation D deals primarily with reserve requirements and may impact the liquidity of banks but does not govern the collection procedures for checks and wire transfers. OCC 235 does not provide a regulatory framework for interbank transactions; rather, it is more focused on the operations and lending authority of federally chartered banks under the Office of the Comptroller of the Currency.

Thus, Regulation J stands out in specifically covering the interbank system for collecting checks and wire transfers, making it the correct choice.