FAQs

Listed on this page are some of the most frequently asked questions received by the Division of Banking. If you have a question that is not addressed here, please contact us at 303-894-7575 for assistance.

• Q

  Aren't banks and credit unions the same thing?

  A

  Even though banks and credit unions may provide similar services, they are not the same thing. A very basic definition is that banks are businesses owned by stockholders and credit unions are non-profits owned by the depositors. In Colorado, state-chartered banks are supervised by the Division of Banking and state-chartered credit unions are supervised by the Division of Financial Services.

• Q

  How do I find out if my bank is FDIC insured?

  A	The Federal Deposit Insurance Corporation (FDIC) maintains a database of all banks insured by the organization. This information can be viewed at http://research.fdic.gov/bankfind/.

• Q

  Where can I find out if my bank has operated under a different name?

  A	The National Information Center (NIC) maintains on its website banks’ historical information. This information can be viewed at: http://www.ffiec.gov/nicpubweb/nicweb/SearchForm.aspx.

• Q

  Why do I have to submit my complaint in writing?

  A

  In order to address your complaint, the Division of Banking forwards a copy of your written complaint to the bank, along with our letter requesting the bank’s information regarding the complaint. Receiving your complaint in writing prevents the possibility of misinformation occurring and allows all parties to work with the same documentation.

• Q

  What are my rights regarding unauthorized automatic teller machine (ATM) transactions, debit card transactions, and electronic transactions?

  A

  Federal Reserve Regulation E (12 CFR 205) limits a customer’s liability on consumer accounts for unauthorized ATM or debit card transactions to the first $50 withdrawn. Under Colorado consumer protection laws, if the unauthorized use occurs through no fault of the account holder, the account holder will not be held liable for any loss. You are responsible for immediately notifying your bank of any unauthorized transactions.

• Q

  What is Check 21 and how does it affect my receiving my original cancelled checks?

  A

  Check 21 is a federal law that went into effect on October 28, 2004. It was designed to help banks process checks faster and more efficiently by handling the processing of checks electronically, instead of having to physically move paper checks from one bank to another. For example, you write a check and mail it to a friend. Your friend takes your check to his bank and deposits it in his account. His bank takes a picture of the front and back of your check, and along with the payment information, transmits it electronically to your bank for payment. If you require a paper copy of a cancelled check, the bank will use the electronic picture and payment information to create a paper “substitute check.”

• Q

  Do the same laws that apply to Check 21 apply when my check is converted to an electronic payment?

  A

  A check you write may be processed as a check. In that case, your rights are governed by check laws and regulations. Some merchants, however, may use your check as a source of information – your name, account number, check number, bank routing number, etc. – to create an electronic fund transfer. You must receive notice that your check may be processed this way. This notice can be provided in several ways, such as in writing on your monthly statement or posted at the cash register. Electronic fund transfers are governed by different laws and have different consumer rights than check payments. For more information, see the brochure “When Is Your Check Not a Check: Electronic Check Conversion” published by the Federal Reserve Board.

• Q

  Can a bank pay checks in any order it chooses?

  A	Banks have a right to establish their own policy concerning the order in which they process checks. Some banks may pay the larger items first so that the most important items such as mortgage and car payments are not returned.

• Q

  Can a bank accept and pay a post-dated check?

  A	Yes. A bank may pay a check that is otherwise properly payable, even though payment was made before the date of the check. If a stop payment order is given to the bank prior to the date of the check, then the bank must honor it and not charge the account.

• Q

  What is the time frame that a bank is allowed to return a dishonored check?

  A	In general, a bank has 24 hours, or one day, to return a dishonored check. Consumers should be aware that a check can be returned after this time frame if problems exist with the check, such as counterfeit, alterations, or forgery.

• Q

  What are my rights and responsibilities when a check has been forged on my account?

  A

  Because most banks employ automated check processing techniques which do not verify the signature on each check to the signature on the deposit account, the account holder is responsible for discovering and promptly reporting to his/her bank any unauthorized transactions. The time allowed for discovering and reporting the discrepancy to the bank varies, but is typically a period of 30 to 60 days. If the bank is notified within this time period, the bank must credit the amount back to the account holder. If the account holder does not notify the bank within this time frame, he/she may not recover that loss or a loss on items previously forged by the same party and paid by the bank before it was notified.

• Q

  Is there a maximum fee a bank can charge for returned checks or overdrafts?

  A	In Colorado, there is no limit on the amount a bank or merchant can charge for returned checks or overdrafts. Banks are required to provide a fee schedule to customers when new accounts are opened, which specifies the fee amounts that may be charged.

• Q

  Can a bank charge a non-account holder a fee to cash a check that is drawn on another financial institution?

  A	In Colorado, banks are not obligated to cash a check for non-account holders and are allowed to charge a fee for this service.

• Q

  Are there limits on the amount of interest that can be charged on consumer or mortgage loans?

  A	The amount of interest that can be charged on a consumer or mortgage loan is regulated by the Uniform Consumer Credit Code (UCCC), which is part of the Office of the Attorney General. The UCCC can be reached at the Uniform Consumer Credit Code.