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Rule 9 – ECCHO Rules Section XIX(O)

ECCHO Members' Rule 9 Status


”Rule 9” is the common industry term for ECCHO Forged and Counterfeit Warranties in which a Depositary bank warrants to the Paying bank that (i) the signature of the purported drawer is not forged or otherwise unauthorized, and (ii) the related physical check is not counterfeit.  Rule 9 is only available for electronic checks exchanged by ECCHO members who have not opted out of Rule 9. Rule 9 Reference Guide

What is the Purpose of Rule 9?

Counterfeit items and items with forged drawers’ signatures are often identified by bank customers after the deadline for returning them has passed.  Rule 9 allows a paying bank to make a claim against a depositary bank to recover for such an item.  The depositary bank is liable only if there are sufficient funds in the depositing customer’s account.  Moreover, the depositary bank can often charge the item back to that customer, so no bank is left with a loss from the fraud.

 

All ECCHO Member financial institutions and licensed entity participants are automatically subject to Rule 9 although there is an opt out provision. The opt out decision is an individual bank decision that should be made by carefully weighing the risks against the benefits and under the guidance of your legal team.

Institutions in Active Opt Out Status
Disclaimer: Some exchanges may mandate Rule 9 despite opt out. Please check with processor on application of Rule 9 through their exchange.  Note: Rule 9 opt outs are on an institution-wide basis. All RTs for an institution are opted out, although only the primary routing number is listed below.
 Member Name  Routing Transit Number  Opt Out Effective Date
 Bankers’ Bank  075912479  03/01/2012
 Citibank, N.A. 021000089  12/01/2006
 Citizens National Bank of Texas 111901629 03/01/2018
 Deutsche Bank  021001033 01/01/2007
 First National Bank of Omaha 104000016 10/01/2014
 Fortress Bank  071111986 10/01/2012
 HSBC Bank, USA 021001088 12/01/2006
 HTLF Bank 107005953 02/01/2009
 The Bank of New York Mellon 021000018 11/01/2012
 The Canandaigua National Bank and Trust Company  022303659  08/01/2021
 U.S. Bank, NA  042000013  09/01/2007
 Woodforest National Bank  113008465  11/01/2010

 

Institutions Where Opt Out Has Been Rescinded – Now Actively Using Rule 9

Member Name
  Routing Transit Number Opt Out Effective Date  Cancellation of Opt Out Effective Date
Banc of California  122238200 09/01/2019 10/01/2024
PNC Bank, N.A.  043000096  01/01/2007  08/01/2007
Westamerica Bank  121140218  03/01/2014  06/01/2017

 

Opt Out Details
A Financial Institution may opt out of the rule for all exchanges subject to the ECCHO Rules. However, the Financial Institution may not opt out if it is subject to another agreement that makes the rule mandatory (e.g. another clearing house rule).

 
Opt out submitted before the 21st of the month is effective the next following month; an opt out occurring after the 21st will be effective the first of the month following the next month. Exception: An opt out election can be effective immediately with the activation of an initial ECCHO membership. Cancel Opt Out: 6 months restriction on re-electing opt out.


If your financial institution is Seeking to Opt Out (or cancel opt out):

  • The opt out election must be made by an authorized representative that is also an officer of the Financial Institution
  • ECCHO Full, Associate or Participating Member – Email request to Stephanie Porter
  • ECCHO Sponsored Member – Notify your Sponsoring Organization
  • Licensed Entity Participant (SVPCO participant that is not an ECCHO member) – Notify your SVPCO Representative
  • When accepted, originating authorized representative will receive a confirmation via email with the opt out effective date (or cancel opt out)

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