IP involves checks (share drafts) deposited at and drawn on a credit union or different depository institution. Checks deposited at and drawn on a credit union are often referred to as on-us checks. Checks deposited at and drawn on depository institutions other than a credit union are often referred to as inter-bank checks. To collect inter-bank checks, a credit union may:
- Present the paper checks or transmit images of the checks directly to the paying bank
- Forward the paper checks or images of the checks to a correspondent bank for collection
- Exchange checks, in paper or electronic form, with a group of banks participating in a clearinghouse arrangement, or
- Forward the paper checks or images of the checks to a Federal Reserve Bank for collection
Often, a credit union will use a third party for this process. The credit union will send the check image files to the third party and the third party will send to FRB. Sometimes the third party is a corporate credit union, other times it might be a CUSO.
See the IP Review Procedures topic of this Examiner’s Guide chapter for more information.
Last updated September 25, 2017
