Exam CRCM topic 1 question 180 discussion

Only A and B-Page 617: When returning items to a Reserve Bank, the paying and returning banks a. Cannot disclaim the warranties, authorizations, and agreements whether or not the returned check bears an endorsement of the paying bank or returning bank b. Authorize the Reserve Bank to handle the item in accordance with Regulation J and the operating circulars c. Warrant that the check bears all endorsements applied by all parties that previously handled the returned check for forward collection or return

The correct answer is B. Authorize the Reserve Bank to handle the item in accordance with Regulation J and the operating circulars. When returning items to a Reserve Bank, the paying and returning banks effectively grant the Reserve Bank the authority to process these items in line with the established procedures and rules as outlined in Regulation J and relevant operating circulars. This authorization ensures that returned items are managed consistently and according to the regulatory framework and operational guidelines designed to maintain the integrity and efficiency of the banking system's processing activities.