US20080162322A1

US20080162322A1 - Automated return item re-clear

Info

Publication number: US20080162322A1
Application number: US11/983,034
Authority: US
Inventors: Benjamin T. Breeden
Original assignee: Federal Reserve Bank of Richmond
Current assignee: Federal Reserve Bank of Richmond
Priority date: 2006-11-07
Filing date: 2007-11-06
Publication date: 2008-07-03
Also published as: US20080162321A1; US20080159655A1; US20140108243A1; US8296223B2; US20080162320A1; US8112357B2; US20080162319A1; US8595096B2

Abstract

Automatically, electronically re-clearing returned checks for payment and presentment. A check processing entity includes a check processing system. A re-clear module of the check processing system receives electronic information regarding a check returned by a receiving institution. The re-clear module automatically determines whether the check is eligible for re-clearing, i.e., whether the check is eligible for reprocessing for payment and/or presentment. For example, the re-clear module can determine whether the check is eligible based on: (a) whether a depositing institution associated with the check has subscribed to a re-clearing service of the processing entity, (b) whether a value of the check is less than a threshold amount, (c) whether the check has been previously re-cleared, and/or (d) whether a reason why the receiving institution returned the check renders re-clearing undesirable. The check processing system can re-clear each returned check determined to be eligible for re-clearing.

Description

RELATED PATENT APPLICATION

This patent application claims priority under 35 U.S.C. §119 to U.S. Provisional Patent Application No. 60/857,666, entitled “Check Processing Using Substitute Check Images,” filed Nov. 7, 2006, the complete disclosure of which is hereby fully incorporated herein by reference. This patent application also is related to co-pending U.S. patent application Ser. No. ______ [Attorney Docket No. 08898.105034], entitled “Systems and Methods for Preventing Duplicative Check Processing,” filed Nov. 6, 2007, U.S. patent application Ser. No. ______ [Attorney Docket No. 08898.105030], entitled “Prioritizing Checks for Electronic Check Processing,” filed Nov. 6, 2007, U.S. patent application Ser. No. ______ [Attorney Docket No. 08898.105032], entitled “System and Method for Processing Duplicative Electronic Check Return Files,” filed Nov. 6, 2007, and U.S. patent application Ser. No. ______ [Attorney Docket No. 08898.105033], entitled “System and Method for Processing Duplicative Electronic Check Reversal Files,” filed Nov. 6, 2007. The complete disclosure of all of the foregoing related applications is hereby fully incorporated herein by reference.

TECHNICAL FIELD

The invention relates generally to re-clearing checks for check processing and more particularly to automatically, electronically re-clearing returned checks for payment and presentment.

BACKGROUND

Effective Oct. 28, 2004, the Check Clearing for the 21st Century Act (“the Act”) improves the ability of banks to use electronic images of paper checks by, for example, submitting those images, along with associated information, for electronic processing. Under the Act, if a receiving financial institution (“RI”) or its customer requires a paper check, a paper image replacement document (“IRD”), such as a paper “substitute check,” can be created from an electronic check image and associated electronic information. Such a substitute check meeting specified requirements is the legal equivalent of an original paper check, and an RI is required to accept the substitute check for payment. This process enables banks to reduce the costs and inconveniences associated with physically handling and transporting original paper checks.
Under the Act, the substitute check must be essentially an exact copy of the original paper check to be the legal equivalent of the original paper check. In particular, the substitute check must include an exact copy of all of the Magnetic Ink Character Recognition (“MICR”) data provided on the original paper check and all check endorsements.
The terms “check,” “substitute check” and “IRD” generally are used interchangeably herein to refer to any electronic or paper document that can be used for electronic payment processing purposes, whether or not the document is the legal equivalent of a paper check negotiable instrument. The terms “bank,” “customer,” “RI,” and “processing entity” generally are used herein to refer to any party performing conventional or electronic check processing at any stage, including depositing and receiving institutions, their non-bank subsidiaries and affiliates, and any non-bank third party agents that provide processing services to banks.
Typically, a processing entity receives an electronic check for processing in an electronic image cash letter file (hereinafter an “ICL file”), which includes one or more electronic image cash letters (“ICLs”). Each ICL includes one or more electronic bundles of items to be processed. Each bundle includes data for one or more items. The term “item” is used herein to refer to a check or an IRD or information that represents a check or an IRD. For a particular item, the ICL can include one or more electronic images of the item, the complete MICR data provided on the item, and additional financial data related to the item, such as endorsement information (hereinafter “addenda data”).
The ICL can further include a series of records related to the items. For example, for each bundle of items in the ICL, the ICL can include a bundle summary control record comprising information about the bundle, such as a bundle identification number, the number of items in the bundle, the value of each of the items in the bundle, and the total value of all the items in the bundle. The ICL also can include an ICL control record comprising information about the origin and destination of the ICL, and a cash letter bundle summary control record comprising a summary of all the bundle summary control records in the ICL.
In electronic check processing, each item in the ICL is processed for payment and presentment. The check processor can process the items for electronic or paper presentment. For example, the check processor can generate and transmit an ICL with information regarding one or more of the items for electronic presentment to an RI. Similarly, the check processor can print a paper cash letter with information regarding one or more of the items for paper presentment to the RI.
After receiving a paper or electronic cash letter for payment, the RI ultimately may determine that one or more of the items in the cash letter cannot be processed. For example, a bank account associated with an item may be closed or may have insufficient funds, a routing number associated with an item may be invalid, and/or a “stop payment” order may be associated with the item. A person of ordinary skill in the art will recognize that many other suitable reasons may exist for not processing an item for payment. If the RI determines not to process an item for payment, the RI places the item, now called a “return item,” in a “return cash letter” and transmits the return cash letter to the processing entity for return of the item to the original depositing financial institution.
The return cash letter includes one or more return items and can be an ICL or a paper cash letter. Traditionally, an operator at the processing entity prints all return ICLs so that all return items are processed via paper. The operator reviews all paper return items by hand to determine whether each return item can be reprocessed for payment and/or presentment. If the return item can be reprocessed, then the processing entity captures electronic data and images from the return item for electronic processing and resubmission to the RI for payment. If the return item cannot be reprocessed, then the processing entity rejects the return item and transmits the return item and/or electronic data and/or images of the item to the depositing institution for handling. This process involves many inefficiencies, most notably the delay involved in manually reviewing each return item by hand.
Thus, a need exists in the art for a system and method for efficiently re-clearing returned checks for payment and presentment.

SUMMARY

The invention provides systems and methods for automatically re-clearing, i.e., reprocessing for presentment and/or payment, a check returned by a receiving institution. A check processing entity includes a check processing system. A re-clear module of the check processing system receives electronic information regarding a check returned by a receiving institution. The receiving institution may return the check for many different reasons. For example, the receiving institution may return the check if a bank account associated with the check is closed or has insufficient funds, a routing number associated with the check is invalid, and/or a “stop payment” order is associated with the check.
The re-clear module automatically determines whether the check is eligible for re-clearing. In other words, the re-clear module determines whether the check is eligible for reprocessing for payment and/or presentment. In certain exemplary embodiments, the re-clear module can determine whether the check is eligible for reprocessing based on: (a) whether a depositing institution associated with the check has subscribed to a re-clearing service of the processing entity, (b) whether a value of the check is less than a threshold amount, (c) whether the check has previously been re-cleared, and/or (d) whether a reason why the check was returned by the receiving institution renders re-clearing undesirable. For example, it may be undesirable to re-clear a check returned because the bank account associated with the check was closed, but it may be desirable to re-clear a check that was returned because the bank account associated with the check had insufficient funds at the time the item first was processed.
The check processing system can re-clear each returned check determined to be eligible for re-clearing. For example, a check processing module of the check processing system can generate an ICL including information regarding the returned check. Then, the check processing module can transmit the generated ICL to the receiving institution.
The check processing system can determine not to re-clear each returned check determined not to be eligible for re-clearing. In certain exemplary embodiments, the processing entity can transmit the returned check to the depositing institution via an ICL or a paper cash letter to complete the return cycle. In addition, or in the alternative, the re-clear module can output a notification to the depositing institution and/or an operator of the processing entity, notifying the depositing institution and/or operator that the returned check is not eligible to be re-cleared. For example, the notification can include information identifying the check, the depositing institution, and/or the receiving institution, a value of the check, and/or information regarding a reason why the check is not eligible to be re-cleared. In certain exemplary embodiments, the depositing institution and/or operator can override the decision of the re-clear module not to re-clear the check.
These and other aspects, objects, features, and advantages of the invention will become apparent to a person skilled in the art upon consideration of the following detailed description of illustrated exemplary embodiments, which include the best mode of carrying out the invention as presently perceived.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram depicting a system for automatically re-clearing a return item, according to certain exemplary embodiments of the invention.

FIG. 2 is a flow chart depicting a method for automatically re-clearing a return item, according to certain exemplary embodiments of the invention.

FIG. 3 is a flow chart depicting a method for determining whether a return item is eligible for re-clearing, according to certain exemplary embodiments of the invention.

DETAILED DESCRIPTION OF EXEMPLARY EMBODIMENTS

The invention is directed to efficiently re-clearing checks for check processing. In particular, the invention is directed to automatically, electronically re-clearing returned checks for payment and presentment.
The invention includes a computer program that embodies the functions described herein and illustrated in the appended flow charts. However, it should be apparent that there could be many different ways of implementing the invention in computer programming, and the invention should not be construed as limited to any one set of computer program instructions. Further, a skilled programmer would be able to write such a computer program to implement an embodiment of the disclosed invention based on the flow charts and associated description in the application text. Therefore, disclosure of a particular set of program code instructions is not considered necessary for an adequate understanding of how to make and use the invention. The inventive functionality of the claimed computer program will be explained in more detail in the following description read in conjunction with the figures illustrating the program flow.
Turning now to the drawings, in which like numerals indicate like elements throughout the figures, exemplary embodiments of the invention are described in detail.
FIG. 1 is a block diagram depicting a system 100 for automatically re-clearing a return item, in accordance with certain exemplary embodiments of the invention. The system 100 is described hereinafter with reference to the methods illustrated in FIGS. 2 and 3.
FIG. 2 is a flow chart depicting a method 200 for automatically re-clearing a return item, in accordance with certain exemplary embodiments of the invention. The exemplary method 200 is illustrative and, in alternative embodiments of the invention, certain steps can be performed in a different order, in parallel with one another, or omitted entirely, and/or certain additional steps can be performed without departing from the scope and spirit of the invention. The method 200 is described hereinafter with reference to FIGS. 1 and 2.
A check processing entity 105 includes a check processing system 103. The check processing system 103 processes paper checks and electronic items for payment and/or presentment. The check processing system 103 receives electronic items from depositing institutions 102 in one or more ICL files including one or more ICLs. For example, the depositing institutions 102 can submit the ICLs file to the check processing system 103 via a network 104.
The network 104 can include any wired or wireless telecommunication means by which computerized devices can exchange data, including for example, a local area network (LAN), a wide area network (WAN), an intranet, an Internet, or any combination thereof. In certain exemplary embodiments, the processing entity 105 can include a Federal Reserve Bank or other check processor that receives transaction items from a depositing institution 102, distributes the items to appropriate receiving institutions 115 or their third party processor(s), and performs settlement functions (crediting and debiting of accounts) for the affected financial institutions.
For example, each ICL can be an electronic file that complies with the ANSI X9.37/X9.100 standard, or other appropriate industry standards, as may change from time to time. Each ICL includes one or more bundles of items (checks and/or IRDs) to be processed. For a particular item, the ICL can include one or more electronic images of the item, all of the complete MICR data provided on the item, and addenda data of the item.
The ICL also can include a series of records related to the items. For example, for each bundle of items in the ICL, the ICL can include a bundle summary control record including information about the bundle, such as a bundle identification number, the number of items in the bundle, the value of each of the items in the bundle, and the total value of all the items in the bundle. The ICL also can include an ICL control record containing information about the origin and destination of the ICL, and a cash letter bundle summary control record containing a summary of all the bundle summary control records in the ICL. The term “record” is used herein to refer to a set of electronic data, including, without limitation, a table, a file, and a part of a table or file.
In certain embodiments of the invention, the ICL file also can include a file header including information identifying the depositing institution 102, such as a name of the depositing institution 102 and/or a bank routing number of the depositing institution 102. The file header also can include information regarding a creation date of the ICL file and information regarding whether each ICL and/or item in the ICL file is associated with a forward transaction or a return transaction.
The check processing system 103 also receives information regarding paper checks transmitted to the check processing entity 105 by the depositing institutions 102 in one or more paper cash letters. Each paper cash letter includes one or more paper checks. For example, the depositing institution 102 can send a paper cash letter to the processing entity 105 via hand or mail delivery. Upon receipt of the paper cash letter at the processing entity 105, a MICR/image capturing device 106 of the processing entity 105 can electronically capture MICR data from each check and images of the front and/or back sides of each check. The MICR/image capturing device 106 can include a separate or integrated MICR reader and image capturing device. The MICR/image capturing device 106 can forward the captured electronic data and images to the check processing module 108 for processing.
The check processing module 108 processes each check for payment and presentment. The check processing module 108 can process the items for electronic or paper presentment. For example, the check processing module 108 can generate and transmit an ICL with information regarding one or more of the items for electronic presentment to a receiving institution 115. Similarly, the check processor can print a paper cash letter with information regarding one or more of the items for paper presentment to the receiving institution 115. Certain exemplary methods for performing such processing are described in co-pending U.S. patent application Ser. No. 11/362,344, entitled “Cash Letter Print Streams With Audit Data” and U.S. patent application Ser. No. 11/362,343, entitled “Expanded Mass Data Sets for Electronic Check Processing,” the complete disclosures of which are hereby fully incorporated herein by reference.
After receiving a paper or electronic cash letter for payment, the receiving institution 115 ultimately may determine that one or more of the items in the cash letter cannot be processed. For example, a bank account associated with an item may be closed or may have insufficient funds, a routing number associated with an item may be invalid, and/or a “stop payment” order may be associated with the item. A person of ordinary skill in the art will recognize that many other suitable reasons may exist for not processing an item for payment. If the receiving institution 115 determines not to process an item for payment, the receiving institution 115 places the item, now called a “return item,” in a “return cash letter” and transmits the return cash letter to the processing entity 105 for return of the item to the depositing institution 102.
The return cash letter includes one or more return items. The return cash letter can be an ICL or a paper cash letter. If the return cash letter is a paper cash letter, then the MICR/image capturing device 106 of the processing entity 105 can electronically capture MICR data from each item and images of the front and/or back sides of each item. The MICR/image capturing device 106 can forward the captured electronic data and images to the check processing module 108 for processing.
In certain exemplary embodiments, the receiving institution 115 can transmit a return ICL to the processing entity 105 via the network 104. As with a “regular,” forward ICL, a return ICL can be an electronic file that complies with the ANSI X9.37/X9.100 standard, or other appropriate industry standards, as may change from time to time. The return ICL includes one or more bundles of return items (returned checks and/or returned IRDs) to be processed. For a particular return item, the return ICL can include one or more electronic images of the return item, all of the complete MICR data provided on the return item, and addenda data of the return item.
The return ICL also can include a series of records related to the return items. For example, for each bundle of return items in the return ICL, the return ICL can include a bundle summary control record including information about the bundle, such as a bundle identification number, the number of return items in the bundle, the value of each of the return items in the bundle, and the total value of all the return items in the bundle. The return ICL also can include an ICL control record containing information about the origin and destination of the return ICL, and a cash letter bundle summary control record containing a summary of all the bundle summary control records in the return ICL.
The check processing module 108 receives each return ICL in an ICL file. The ICL file includes one or more ICLs. A particular ICL file can include both forward ICLs and return ICLs. In certain exemplary embodiments, the ICL file can include a file header including information identifying the depositing institution 102, such as a name of the depositing institution 102 and/or a bank routing number of the depositing institution 102. The file header also can include information regarding a creation date of the ICL file and information regarding whether each ICL and/or item in the ICL file is associated with a forward transaction or a return transaction.
Referring to FIG. 2, in step 205, a re-clear module 107 of the check processing system 103 receives information from the check processing module 108 regarding a return item to be re-cleared. For example, the check processing module 108 can transmit the information based on information from a return paper cash letter or a return ICL file transmitted to the processing entity 105 by a receiving institution 115.
In step 210, the re-clear module 107 determines whether the return item is eligible for re-clearing. For example, the re-clear module 107 can determine that a return item is not eligible for re-clearing if the depositing institution 102 has not subscribed to a re-clearing service of the processing entity 105, if a value of the return item is above a predetermined threshold amount, if the return item already has previously been re-cleared, and/or if a reason why the return item was returned by the receiving institution 115 renders re-clearing undesirable. Similarly, the re-clear module 107 can determine that a return item is eligible for re-clearing if the depositing institution 102 has subscribed to the re-clearing service of the processing entity 105, if the value of the return item is less than or equal to a predetermined threshold amount, if the return item has not previously been re-cleared, and/or if a reason why the return item was returned by the receiving institution 115 does not render re-clearing undesirable. Step 210 is described in detail hereinafter with reference to FIG. 3.
If the re-clear module 107 determines in step 210 that the return item is eligible for re-clearing, then the method 200 branches to step 220. In step 220, the check processing module 108 converts the return item to a forward item and processes the forward item for payment and presentment to the receiving institution 115. The check processing module 108 can perform such processing in substantially the same manner in which it processes regular, non-return items. For example, the check processing module 108 can generate an ICL including information regarding the forward item for transmission to the receiving institution 115. Certain exemplary methods for performing such processing are described in co-pending U.S. patent application Ser. No. 11/362,344, entitled “Cash Letter Print Streams With Audit Data” and U.S. patent application Ser. No. 11/362,343, entitled “Expanded Mass Data Sets for Electronic Check Processing,” the complete disclosures of which are hereby fully incorporated herein by reference.
In certain exemplary embodiments, the re-clear module 107 can output a notification to the depositing institution 102 and/or an operator of the processing entity 105, notifying the depositing institution 102 and/or operator that the return item has been converted to a forward item and/or that the item is eligible for being re-cleared. For example, the notification can include information identifying the item, the depositing institution 102 and/or the receiving institution 115, a value of the item, and/or information regarding a reason why the item was returned.
In step 225, the re-clear module 107 stores information regarding the item in a history record. For example, the history record can be stored in a database 109 of the check processing system 103. The history record can include information identifying all items that previously have been determined to be eligible for re-clearing and/or that already have been re-processed for payment and/or presentment within a predetermined time period. For example, for each item, the history record can include a unique identifier assigned to the item substantially as described in co-pending U.S. patent application Ser. No. ______ [Attorney Docket No. 08898.105034], entitled “Systems and Methods for Preventing Duplicative Electronic Check Processing,” filed on Nov. 6, 2007, the complete disclosure of which is hereby fully incorporated herein by reference.
In certain exemplary embodiments, the history record can be stored in, or can otherwise be appended to, the item. In such embodiments, the history record may not include information identifying the item, but instead may include information indicating that the item has been determined to be eligible for re-clearing and/or that the item already has been re-processed for payment and/or presentment. For example, the history record can include addenda data of the item.
From step 225, the method 200 ends.
Referring back to step 210, if the re-clear module 107 determines that the return item is not eligible for re-clearing, then the method 200 branches to step 215. In step 215, the re-clear module 107 determines not to re-clear the return item. The processing entity 105 transmits the return item to the depositing institution 102 to complete the return cycle. The processing entity 105 can transmit the return item to the depositing institution 102 via an ICL or a paper cash letter. For example, the check processing module 108 can transmit a return ICL including the return item to the depositing institution 102 via the network 104. Alternatively, the check processing module 108 can print a paper cash letter including the return item for hand or mail delivery to the depositing institution 102. Certain exemplary methods for printing a paper cash letter are described in co-pending U.S. patent application Ser. No. 11/362,344, entitled “Cash Letter Print Streams With Audit Data,” the complete disclosure of which is hereby fully incorporated herein by reference.
From step 215, the method 200 ends.
In certain exemplary embodiments, the re-clear module 107 can output a notification to the depositing institution 102 and/or an operator of the processing entity 105, notifying the depositing institution 102 and/or operator that the return item is not eligible for being re-cleared. For example, the notification can include information identifying the return item, the depositing institution 102 and/or the receiving institution 115, a value of the return item, and/or information regarding a reason why the return item is not eligible for being re-cleared. In certain exemplary embodiments, the depositing institution 102 and/or operator can override the decision of the re-clear module 107 not to re-clear the item.
FIG. 3 is a flow chart depicting a method 210 for determining whether a return item is eligible for re-clearing, in accordance with certain exemplary embodiments of the invention, as referenced in step 210 of the method 200 of FIG. 2. The exemplary method 210 is illustrative and, in alternative embodiments of the invention, certain steps can be performed in a different order, in parallel with one another, or omitted entirely, and/or certain additional steps can be performed without departing from the scope and spirit of the invention. The method 210 is described hereinafter with reference to FIGS. 1 and 3.
In step 305, the re-clear module 107 determines whether the depositing institution 102 has subscribed to a re-clear service. For example, in certain exemplary embodiments, the re-clear module 107 can limit re-clearing to items associated with depositing institutions 102 that have agreed to pay a special fee for return item re-clears. In certain exemplary embodiments, the re-clear module 107 can access a list identifying all depositing institutions 102 subscribed to a re-clear service to make the determination of step 305. For example, such a list can be stored in the database 109.
If the re-clear module 107 determines in step 305 that the depositing institution 102 has not subscribed to a re-clear service, then the method 210 branches to step 307. In step 307, the re-clear module 107 determines that the return item is not eligible for re-clearing. The method 210 then proceeds to step 215 of FIG. 2.
Referring back to step 305, if the re-clear module 107 determines that the depositing institution 102 has subscribed to a re-clear service, then the method 210 branches to step 310. In step 310, the re-clear module 107 reads a value of the return item. For example, the re-clear module 107 can read the value from a financial data file or record associated with the item and/or from a MICR line of the item.
In step 315, the re-clear module 107 determines whether the read value is less than a predetermined threshold value. In certain exemplary embodiments, the processing entity 105, the receiving institution 115, and/or the depositing institution 102 can specify the predetermined threshold value. For example, the depositing institution 102 can specify that a return item is not eligible for re-clearing unless the return item has a value less than $200. In certain exemplary embodiments, the threshold value can be stored in a file or record in the database 109.
If the re-clear module 107 determines in step 315 that the value is not less than the predetermined threshold value, then the method 210 branches to step 307. In step 307, the re-clear module 107 determines that the return item is not eligible for re-clearing. The method 210 then proceeds to step 215 of FIG. 2.
Referring back to step 315, if the re-clear module 107 determines that the read value is less than the predetermined threshold value, then the method 210 branches to step 320. In step 320, the re-clear module 107 compares information regarding the return item to information in a history record. For example, the history record can be stored in a database 109 of the check processing system 103.
The history record can include information identifying all items that already have been determined to be eligible for re-clearing and/or that already have been re-processed for payment and/or presentment within a predetermined time period. For example, for each item, the history record can include a unique identifier assigned to the item substantially as described in co-pending U.S. patent application Ser. No. ______, [Attorney Docket No. 08898.105034], entitled “Systems and Methods for Preventing Duplicative Electronic Check Processing,” filed on Nov. 6, 2007, the complete disclosure of which is hereby fully incorporated herein by reference. The history record can include other information regarding the item, such as a routing-transit number, check sequence number, and/or dollar value associated with the item.
In certain exemplary embodiments, the history record can be stored in, or can otherwise be appended to, the item. In such embodiments, the history record may not include information identifying the item, but instead may include information indicating that the item has been determined to be eligible for re-clearing and/or that the item already has been re-processed for payment and/or presentment. Regardless of whether the history record is stored in or appended to the item, the history record can include a time stamp for, or other information related to, each time that the item was received and/or processed by the processing entity 105. By way of example only, the history record can include information regarding each time the processing entity 105 received the item as a forward item and as a return item and/or information regarding each time the processing entity 105 transmitted the item to the receiving institution 115.
In step 325, the re-clear module 107 determines whether the return item already has been re-cleared, based on the comparison performed in step 320. If so, then the method 210 branches to step 307. In step 307, the re-clear module 107 determines that the return item is not eligible for re-clearing. The method 210 then proceeds to step 215 of FIG. 2.
Thus, in steps 320-325 and 307, the re-clear module 107 prevents the same return item from being re-cleared multiple times. In certain alternative exemplary embodiments, the re-clear module 107 can allow the return item to be re-cleared multiple times, as long as the total number of re-clears of a particular item does not exceed a predetermined threshold. For example, the re-clear module 107 can read the history record to determine how many times each return item has previously been re-cleared. The re-clear module 107 can compare that number of re-clears with the predetermined threshold to determine whether re-clearing is appropriate. In certain exemplary embodiments, the processing entity 105, the receiving entity 115, and/or the depositing institution 102 can specify the predetermined threshold number of re-clears. For example, the threshold number can be stored in a file or record in the database 109.
Referring back to step 325, if the re-clear module 107 determines that the return item has not already been re-cleared (or has not been re-cleared more than the number of times specified by the predetermined threshold), then the method 210 branches to step 330. In step 330, the re-clear module 107 identifies at least one reason why the return item was rejected by the receiving entity 115. A person of ordinary skill in the art will recognize that a receiving institution 115 may reject an item for many different reasons. For example, a receiving institution 115 can reject an item if a bank account associated with the item is closed or has insufficient funds, a routing number associated with the item is invalid, and/or a “stop payment” order is associated with the item. In certain exemplary embodiments, the re-clear module 107 can identify the reason(s) why the return item was rejected by reading information in the return item and/or the paper cash letter, ICL, and/or ICL file in which the receiving institution 115 transmitted the return item to the processing entity 105. For example, the return item can include an indicator indicating the reason(s).
In step 335, the re-clear module 107 determines whether the reason(s) identified in step 330 render re-clearing undesirable. For example, it may be undesirable to re-clear an item previously rejected because a bank account associated with the item was closed. However, it may be desirable to re-clear an item that previously was rejected because the bank account associated with the item had insufficient funds at the time the item first was processed. In certain exemplary embodiments, the re-clear module 107 can make the determination of step 335 by comparing the reason(s) identified in step 330 to a list of desirable and/or undesirable reasons. For example, the list can be stored in a file or record in the database 109. In certain exemplary embodiments, the processing entity 105, the receiving entity 115, and/or the depositing institution 102 can specify the desirable and/or undesirable reasons.
If the re-clear module 107 determines in step 335 that the identified reason(s) render re-clearing undesirable, then the method 210 branches to step 307. In step 307, the re-clear module 107 determines that the return item is not eligible for re-clearing. The method 210 then proceeds to step 215 of FIG. 2.
If the re-clear module 107 determines in step 335 that the identified reason(s) do not render re-clearing undesirable, then the method 210 branches to step 340. In step 340, the re-clear module 107 determines that the return item is eligible for re-clearing. The method 210 then proceeds to step 220 of FIG. 2.
A person of ordinary skill in the art having the benefit of the present disclosure will recognize that the above-identified factors for determining whether a return item is eligible for re-clearing are merely exemplary in nature. In certain alternative exemplary embodiments, other suitable factors may be used. In addition, in certain alternative exemplary embodiments, no factors may be used. Rather, all return items may be deemed suitable for re-clearing in certain exemplary embodiments. Furthermore, all of the factors illustrated in FIG. 3 may be used, at least one of the factors illustrated in FIG. 3 may be used, or any combination of the factors illustrated in FIG. 3 may be used.
The invention can be used with computer hardware and software that performs the methods and processing functions described above. As will be appreciated by a person skilled in the art, the systems, methods, and procedures described herein can be embodied in a programmable computer, computer executable software, or digital circuitry. The software can be stored on computer readable media. For example, computer readable media can include a floppy disk, RAM, ROM, hard disk, removable media, flash memory, memory stick, optical media, magneto-optical media, CD-ROM, etc. Digital circuitry can include integrated circuits, gate arrays, building block logic, field programmable gate arrays (FPGA), etc.
Although specific embodiments of the invention have been described above in detail, the description is merely for purposes of illustration. It should be appreciated, therefore, that many aspects of the invention were described above by way of example only and are not intended as required or essential elements of the invention unless explicitly stated otherwise. Various modifications of, and equivalent steps corresponding to, the disclosed aspects of the exemplary embodiments, in addition to those described above, can be made by a person skilled in the art without departing from the spirit and scope of the present invention defined in the following claims, the scope of which is to be accorded the broadest interpretation so as to encompass such modifications and equivalent structures.

Claims

1. A computer-implemented method for automatically resubmitting a returned check for payment, comprising the steps of:

receiving at a check processing system of a check processing entity electronic information regarding a check returned by a receiving institution;

automatically determining, by the check processing system, whether the check is eligible to be reprocessed for at least one of payment and presentment; and

reprocessing the check for at least one of payment and presentment in response to determining that the check is eligible to be reprocessed.

2. The method of claim 1, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

determining whether a depositing institution associated with the check has subscribed to a service of the check processing entity; and

determining that the check is not eligible to be reprocessed in response to determining that the depositing institution has not subscribed to the service of the check processing entity.

3. The method of claim 1, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

determining whether a value of the check is less than a threshold value; and

determining that the check is eligible to be reprocessed in response to determining that the value of the check is less than the threshold value.

4. The method of claim 1, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

determining whether the check has previously been reprocessed for at least one of payment and presentment; and

determining that the check is eligible to be reprocessed in response to determining that the check has not been previously reprocessed for at least one of payment and presentment.

5. The method of claim 1, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

determining whether the check has previously been reprocessed for at least one of payment and presentment more than a predetermined number of times; and

determining that the check is eligible to be reprocessed in response to determining that the check has not been previously reprocessed for at least one of payment and presentment more than the predetermined number of times.

6. The method of claim 1, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

identifying a reason why the check was returned by the receiving institution based on the electronic information regarding the check;

determining whether the identified reason renders reprocessing of the check undesirable; and

determining that the check is eligible to be reprocessed in response to determining that the identified reason does not render reprocessing of the check undesirable.

7. The method of claim 1, further comprising the step of notifying a depositing institution associated with the check that the check is not eligible for reprocessing in response to determining that the check is not eligible to be reprocessed for payment.

8. The method of claim 1, further comprising the step of transmitting the check to a depositing institution associated with the check in response to determining that the check is not eligible to be reprocessed.

9. The method of claim 1, wherein the step of reprocessing the check comprises the steps of:

creating an ICL file comprising information regarding the check; and

transmitting the ICL file to the receiving institution.

10. The system of claim 1, wherein the receiving institution is a third party agent that provides a processing service to a bank associated with the check.

11. A computer-implemented method for automatically determining whether to re-clear a returned check, comprising the steps of:

automatically determining, by the check processing system, whether the check is eligible to be reprocessed for at least one of payment and presentment based on a reason why the check was returned by the receiving institution; and

determining to reprocess the check for at least one of payment and presentment in response to determining that the check is eligible to be reprocessed.

12. The method of claim 11, wherein the step of automatically determining whether the check is eligible to be reprocessed comprises the steps of:

identifying the reason why the check was returned by the receiving institution;

13. The method of claim 11, further comprising the step of notifying a depositing institution associated with the check that the check is not eligible for reprocessing in response to determining that the check is not eligible to be reprocessed.

14. The method of claim 11, further comprising the step of transmitting the check to a depositing institution associated with the check in response to determining that the check is not eligible to be reprocessed.

15. The method of claim 11, wherein the step of reprocessing the check comprises the steps of:

creating an ICL file comprising information regarding the check; and

transmitting the ICL file to the receiving institution.

16. The system of claim 11, wherein the receiving institution is a third party agent that provides a processing service to a bank associated with the check.

17. A computer-implemented method for automatically reprocessing a returned check, comprising the steps of:

automatically determining, by the check processing system, whether the check is eligible to be reprocessed for at least one of payment and presentment based on at least one of: (a) whether a depositing institution associated with the check has subscribed to a re-clearing service of the check processing entity, (b) whether a value of the check is less than a threshold value, (c) whether the check has been previously reprocessed for at least one of payment and presentment, and (d) a reason why the receiving institution returned the check; and

18. The method of claim 17, further comprising the step of notifying the depositing institution associated with the check that the check is not eligible for reprocessing in response to determining that the check is not eligible to be reprocessed.

19. The method of claim 17, further comprising the step of transmitting the check to the depositing institution associated with the check in response to determining that the check is not eligible to be reprocessed.

20. The method of claim 17, wherein the step of reprocessing the check comprises the steps of:

creating an ICL file comprising information regarding the check; and

transmitting the ICL file to the receiving institution.

21. The system of claim 17, wherein the receiving institution is a third party agent that provides a processing service to a bank associated with the check.

22. A computer-implemented system for automatically re-clearing an item, comprising:

a check processing module configured to process checks for payment and presentment to a receiving institution; and

a re-clear module configured to automatically determine whether a check returned by the receiving institution is eligible for reprocessing based on at least one of: (a) whether a value of the check is less than a threshold value, (b) whether the returned check has been previously reprocessed for at least one of payment and presentment, and (c) a reason why the receiving institution returned the check,

wherein the check processing module is further configured to reprocess the check for at least one of payment and presentment in response to the re-clear module determining that the check is eligible for reprocessing.

23. The system of claim 22, wherein the re-clear module is further configured to notify a depositing institution associated with the check that the check is not eligible for reprocessing in response to determining that the check is not eligible for reprocessing.

24. The system of claim 22, wherein the check processing module is further configured to reprocess the check by creating an ICL file comprising information regarding the check and transmitting the ICL file to the receiving institution.

25. The system of claim 22, wherein the receiving institution is a third party agent that provides a processing service to a bank associated with the check.