Certified Regulatory Compliance Manager (CRCM) — Question 154

By sending an item to a Reserve Bank, a sender:

Answer options

• A. Never authorizes the Reserve Bank to handle the item based on this regulation and the Reserve Bank's circulars
• B. Warranties for electronic items that are substitute checks
• C. Warrants to each Reserve Bank handling the item that it has good title, that it is entitled to enforce the item, that the item has not been materially altered, and that the item bears all endorsements applied by parties that previously handled the item in paper or electronic form
• D. The sender makes all of the warranties set forth in the Uniform Commercial Code (UCC) as if the item were subject to the UCC and makes all of the Regulation CC warranties as if the electronic item were a paper item subject to that regulation

Correct answer: C, D

Explanation

Option C is correct because it details the specific warranties the sender must provide about the item's ownership and condition. Option D, while also true, focuses on the application of UCC and Regulation CC warranties, but does not address the specific assurances about the item itself, which makes C the more precise choice for this context. Options A and B do not correctly describe the responsibilities assumed by the sender when sending an item to a Reserve Bank.