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Article: Fed to Mull Demand Draft Rule Changes.(Federal Reserve Board)
- Article from:
- American Banker
- Article date:
- June 17, 2004
- Author:
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The Federal Reserve Board is considering changing its rules to shift the liability for a fraudulent demand draft to the bank that deposited it from the account holder's bank.
Demand drafts are paper checks that do not require the signature of the account holder; consumers frequently use them to make recurring payments, such as to a utility company or a health club. But criminals have discovered that the drafts are also an ideal way to gain access to someone's checking account.
As part of its update of Regulation CC to implement the Check 21 law, the Fed asked the public in January whether the rules on demand drafts should be changed, too. The central ...