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NAFCU lent support Tuesday to a Federal Reserve Regulation CC proposal to create a regulatory presumption for resolving disputes over certain potentially altered or forged checks.

The proposal, which would modify Reg CC's liability provisions, would create a rebuttable presumption of alteration in certain types of disputes where the original paper check is not available for inspection. NAFCU backs the proposal "with the expectation that it will provide certainty and predictability in the check collection process," NAFCU Regulatory Affairs Counsel Andrew Morris said in an official comment letter to the Fed Tuesday.

The proposed rule, issued in May, is aimed at providing clarity regarding the burden of proof.

"NAFCU anticipates that a regulatory presumption will help resolve conflicting court opinions which address whether a fraudulent substitute or electronic check should be treated as altered or forged when the original check cannot be presented as evidence," Morris wrote.

Of note, Morris urged that the Fed do a full assessment of the proposal – if it becomes final – to ensure that the presumption does not favor certain types of depository institutions and, more specifically, that the loss allocation framework of the presumption doesn't create unfair burdens for smaller financial institutions.

NAFCU also weighed in with its support of this proposal and echoed its suggestions in an industry trades letter sent Tuesday. Along with NAFCU, other signers on the letter included the American Bankers Association, CUNA, The Clearing House Payments Co. LLC, the Electronic Check Clearing House Organization and the Independent Community Bankers of America.