Mobile Remote Deposit Capture

Note to Readers:  Please note that reference to Regulation CC requirements and one Regulation DD requirement was removed from the original article given that the regulatory guidance in this area is still evolving. (03/24/16)

Consumers increasingly use their mobile phones to access banking services.¹ We have seen several Ninth District banks add a mobile remote deposit feature to their electronic banking services consistent with this trend. This article defines a mobile remote deposit capture service, covers some of the applicable consumer protection requirements, and identifies several effective practices for managing consumer compliance risk related to mobile deposits.

What is mobile remote deposit capture (MRDC), or mobile deposit?

With MRDC, a customer deposits a check by providing a check image; customers make deposits by taking pictures of a check’s front and back with a smartphone and sending the images to the bank through a mobile banking application or online banking service. Customers do not need to deposit the physical check in this arrangement. Many banks have offered remote deposit capture to commercial customers for some time, but banks have only recently made the service available to consumer customers.

What are examples of regulatory requirements that apply to mobile deposits from consumers?

Some provisions of Regulation DD—Truth in Savings apply to MRDC, in addition to other deposit methods. The key requirements of Regulation DD applicable to MRDC are:

• Initial account disclosures should describe any deposit limitations for MRDC, such as allowing only a maximum deposit amount or number of deposits during a particular period, or any fees for making mobile deposits or using a mobile deposit service.
• Customers should see fees charged for mobile deposits on their periodic statements.

What are effective practices regarding MRDC?

The bank should have a contract with the consumer that covers the bank’s acceptance of check images as deposits to a consumer account and explains the rights and responsibilities of both parties. Examples of questions that consumer agreements and communication should answer include:

1. What transaction limits apply to mobile deposits?

• How much can a consumer deposit (or how many deposits can a consumer make) during a particular time period?

2. What fees apply to mobile deposits?

• How can a consumer avoid paying fees for making deposits (such as by making a deposit at an automated teller machine)?

3. How long should the consumer keep the deposited check?

• How should the consumer store/destroy the deposited check?

The bank should describe the applicable terms for mobile deposits and whether these terms differ from other deposit methods in its customer communications. If applicable, a bank should explain to its customers the extent to which a check deposited through MRDC has different fees or additional limitations compared with the same check deposited in a different manner.

Endnotes

1 Brown, Alexandra, Sam Dodini, Arturo Gonzalez, Ellen Merry, and Logan Thomas, “Consumers and Mobile Financial Services 2015,” Board of Governors of the Federal Reserve System, March 2015, p. 1. federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201503.pdf

Reference

FFIEC Guidance SR09-2, Risk Management of Remote Deposit Capture, provides additional information and is available at federalreserve.gov/boarddocs/srletters/2009/SR0902.htm.