Which regulation governs the collection of checks and fund transfers?

The regulation that governs the collection of checks and fund transfers is Regulation J. This regulation is part of the framework established by the Federal Reserve and specifically addresses the rights and responsibilities of parties involved in the collection and transfer of funds through checks and other payment instruments. It includes provisions for the handling of checks, interbank transactions, and the roles of depository institutions in these processes.

Regulation J establishes the legal foundation for the check collection process, including how items are sent and settled among financial institutions. It addresses the timing of settlement, the responsibilities of collecting banks, and the application of the Uniform Commercial Code (UCC) to check collections. This ensures consistency and reliability in how checks and fund transfers are processed in the banking system.

In the context of the other regulations mentioned, each serves distinct purposes: Regulation K pertains to international banking operations, Regulation L relates to financial holding companies and the exclusion of certain activities, and Regulation M focuses on the consumer leasing aspects in finance. These differences clarify why Regulation J is the appropriate choice for the governance of check collections and fund transfers.