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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/or (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.

 

Forged and counterfeit items are often identified by bank customers after the return deadlines have passed. Rule 9 allows the Paying bank to file a claim to recover from a fraudulent item after the UCC midnight return deadline. Rule 9 shifts responsibility, in some cases, from the Paying bank (as assigned in UCC 4-407 & 4-408) to the depositor when there are sufficient funds in the depositor’s account. The depositor is generally in the best position to have prevented the loss.  The loss remains with the Paying bank if there are insufficient funds in the depositor’s account.

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

 Canandaigua National Bank and Trust Company

022303659

08/01/2021

 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

 Nicolet National Bank

075917937

09/01/2023

 Pacific Western Bank

122238200

09/01/2019

 The Bank of New York Mellon

021000018

11/01/2012

 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
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)