___________ governs the collection of checks and other cash and noncash items and the handling of returned checks by Federal Reserve Banks. It also covers the rules governing funds transfers sent through the Fedwire. Its purpose is to provide rules for collecting and returning items and settling balances.
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A. B. C. D.C
The correct answer is C. Regulation J.
Regulation J, also known as the "Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers Through Fedwire" is a regulation issued by the Board of Governors of the Federal Reserve System (FRB) that governs the handling of checks and other cash and noncash items, as well as the processing of returned checks by Federal Reserve Banks. It also provides rules for the settlement of balances related to these transactions.
Under Regulation J, Federal Reserve Banks act as intermediaries between depository institutions, facilitating the collection and settlement of checks and other items. The regulation outlines the requirements and responsibilities for both the sending and receiving banks, as well as the time frames for processing and returning items.
In addition to checks, Regulation J also covers the rules for electronic funds transfers sent through the Fedwire Funds Service, which is the electronic funds transfer system operated by the Federal Reserve Banks. This includes the requirements for sending and receiving funds, as well as the procedures for settling balances between depository institutions.
Overall, the purpose of Regulation J is to provide a consistent and reliable framework for the collection and settlement of checks and other items, as well as the transfer of funds through the Fedwire system. By establishing clear rules and procedures, the regulation helps to ensure the smooth functioning of the nation's payment system.