X9 STANDARDS Flashcards
Standards for Check Endorsements
Purpose: provides location for a physical check endorsements referenced by Reg CC
X9.100-111
X9 standard for specifications for an image Replacement Document (IRD)
Purpose: provide specification for standard machine-readable substitute documents. Referenced by reg. CC.
X9.100-140
X9 standard for Magnetic Ink Printing (MICR)
Purpose:
Part 1: Replacement and location of MICR fields
Part 2: EPC Field Use
X9.100-160
X9 standard for return reasons for Check Image Exchange and IRDs.
Purpose: Provides industry with return reason codes for both image exchange and IRD creation.
X9.100-188
X9 standard for electronic exchange of check and image data.
Purpose: provides industry with format to perform electronic check, exchange, forward and return . Referenced by Reg CC
X9.100-187
What is the Reg CC reference regarding MICR line definition and MICR location?
Printed near the bottom of the check in magnetic ink in accordance with ANS standards for:
X9.100-160 (aka x9.13) - For MICR line of original check
X9.100-140 for a substitute check
X9.100-187 for an electronic check/ electronic returned check For purpose of subpart Cand subpart D)
Location of MICR - information with reference to the electronic check.
Must conform with specifications of x9.100-187.
Indorsements
What are the requirements for banks (other than paying banks) that handle a check during forward collection or return?
Banks must indorse checks in accordance with the standards outlined in the following specifications:
X9.100-111:
Specifications for physical check endorsements and electronic endorsement overlays applied to check images.Applies to paper checks (other than substitute checks).
X9.100-140:
Specifications for Image Replacement Document (|RD).
Applies to substitute checks.
X9.100-187:
Standards for electronic exchange of check and image data (domestic).
Applies to electronic checks.
X9.100.111
Check endorsement standard
Provides location for a physical check endorsements and electronic endorsement. Overlays applied to check images. (Note that an overlay is an endorsement added by the depository bank. )
Does not apply to formats for electronic endorsement records as defined x9.100-187 check image exchange or x9.100-140 IRD standards.
X9.100-140
Image Replacement Document (IRD)
(Remember: 140 or 14D to remember IRD)
Provides the industry with a specifications For standard machine readable substitute documents.
- created from an image that derived from front and back of original check.
Rick, CC states the track image May at any point be reconverted to create substitute check (IRD)
IRDs May be used for returns, representment, inclusion and customer statements etc.
What is the purpose of a substitute check or Image Replacement Document (IRD)?
A substitute check or IRD is the legal equivalent of the original check.
It is created for various reasons, such as:
- Returned items
- Rejected items
- Paid items (e.g., for customer statements)
Substitute checks ensure that financial institutions can process checks even after truncation.
What does the X9.100-140 standard specify for substitute checks?
The X9.1 00-140 standard specifies:
The shrinkage of images (front and back) based on check size (e.g., consumer vs. business checks).
The inclusion of a “4” in the EPC position of the MICR line for IRDS.
Endorsement placement for reconverting banks and prior handlers.
Why is a “4” placed in the EPC position of the MICR line for an IRD?
The “4” in the EPC position serves two purposes:
- Identifies the document as an Image Replacement Document (IRD).
- Alerts software to stop shrinking the imageduring subsequent processing to preserve image clarity.
What responsibility does the reconverting bank have when creating a substitute check?
The reconverting bank must:
Include endorsements from all banks that previously handled the check. Identify the depository bank and truncating bank.
Follow placement and MICR line standards outlined in X9.100-140.
What happens if the paying bank creates a substitute check for a return item?
If a paying bank creates a substitute check for a return item:
The “4” is placed in the EPC position of the MICR line for the IRD.
A qualified return strip with a “5” is added for sorting and routing back to the depository bank.
The qualified return strip can be removed after imaging for processing.
What is the difference between a “4” and a “5” in the MICR line for IRDS?
“4”: ldentifies the document as an IRD and signals software to stop shrinking the image.
“5”: Indicates a qualified return strip for routing a return item to the depository bank.
What is the difference between a “4” and a “5” in the MICR line for IRDS?
“4”: identifies the document as an IRD and signals software to stop shrinking the image. The 4 is an IRD no matter what direction.
“5”: Indicates a qualified return strip for routing a return item to the depository bank.
What does ANSI X9.100-111 cover regarding physical endorsements?
It governs physical endorsements, which are markings made directly on the original or substitute check (the physical piece of paper).
It also provides placement parameters for data content, background, and design elements on the back of the check.
What is the difference between a physical endorsement and an overlay endorsement?
A physical endorsement is directly on the piece of paper (original or substitute check), while an overlay endorsement is added electronically to an image of the check after it is captured. Physical endorsements always appear in the image, but not all endorsements seen in an image are physical.
Why is the reserved area for the depository bank’s endorsement important in ANSI X9.100-111?
The standard reserves a specific area for the depository bank’s endorsement to ensure it is clear, identifiable, and free from interference (e.g., payee endorsements or bold graphics). This allows for timely returns and proper identification of the depository bank.
What are the parts of the X9.100-160 MICR Line on Check ?
Part 1: establishes placement and location for printing E-13B MICR font and ink on checks, travis, and other documents for automated processing. An example of other documents: internal forms, deposit and batch tickets.
(Note: today fewer Banks will post encode dollar amount as the amount field is rarely used today)
Part 2: establishes assignment and management of a one-digit optional EPC field.
- EPC values convey special information for correct handling or routing of check/ check data to FI’s or other processors.
- used identification of irds or qualified returns (value 4 or 5
- Value 6 used to identify remotely created checks (RCC).
What fields are included in the MICR line?
The MICR line includes the
- amount field,
- “on us” field
- transit field
- auxiliary “on us” field.
Why is the amount field rarely used in 2025?
It was once used by depository banks to post and easily read the amount, but now it’s often not utilized as electronic systems have evolved.
What is the purpose of the “on us” field in the MICR line?
The “on us” field typically contains the account number and sometimes the check serial number, marked with symbols to distinguish them.
Where is the transit field located, and what does it contain?
The transit field is located between two transit symbols and contains the routing number of the paying bank.
What is the function of the auxiliary “on us” field in the MICR Iline?
The auxiliary “on us” field, located on the far left, may contain the check serial number if it’s not placed in the “on us” field.
What is the main purpose for the x9.100-187 Electronic Exchange of Check and image data?
Provides the industry with format to perform electronic check exchange
Format supports exchange for both for both forward presentment and returns. And also for IRD creation and customer deposits.
Allows check images to be linked to and transmit it along with financial posting data utilizing a cash letter structure
Supports multiple check clearing alternatives such as bank-to-bank, bank-to- switch, etc.
What does the X9.100-187 standard define?
The X9.100-187 standard defines the format for the electronic check image data, specifically for the Image Cash Letter (ICL).
What records are included in the lmage Cash Letter (ICL)?
The ICL includes:
File header record
File control record
Cash letter record
Cash letter control record
Bundle header record
Bundle control record
Item-level records for each check
What does the x9.100-188 Return Reasons standards address?
Return reasons for check, image exchange and IRDs
- includes return reasons used by x9.100-14 0 image replacement document IRD (substitute checks)
- X9.100-187 electronic exchange of check and image data.
Standard includes return codes for both customer and administrative returns for image exchange and IRD creation.
Does NOT address operational, implementation, Or settlement considerations.
What is technical report 47?
It is a universal companion document to the x9.100-187 electronic exchange of check and image data.
What is the purpose of the 188 standard?
The 188 standard creates a unified repository for return reasons and their abbreviations, ensuring consistency when creating substitute checks (IRDs).
It provides standardized abbreviations and a maximum of four to five sentences for each return reason.
How does the Universal Companion Document in Technical Report 47 help with data interpretation?
The Universal Companion Document ensures that different entities use and interpret values consistently, even if their local systems use different formats or variations (e.g., “blue” might mean midnight blue or navy in different systems). It helps provide clarity across the industry.
What is a Cash Letter?
Group of negotiable instruments, usually checks
Includes instructions for handling
- Who it’s from? (Presenting Bank)
- Where it’s going? (Receiving Bank)
Describes what kind of items are included
- Forward collection items
- Return checks
Includes control totals
- Total number of items
- Total dollar value
What is a cash letter historically based on?
Paper cash letters used to be sub.grouped into bundles. Typically about 300 items in each bundle.
Each bundle would have supper instructions such as from/to, what’s included, Number of items, and dollar value.
To a cash letter file mimics the same process but the only thing that was added was the file had a record.
What is the significance of a file containing multiple cash letters or bundles?
The file can contain multiple cash letters, and each cash letter can have one or multiple bundles. This structure helps in sorting and routing to the correct destination.
