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Question 179

In Sender's agreement-12 CFR 210.28 it is clearly mentioned that:

Reserve Banks have the right to debit payment amounts from accounts of senders with the Reserve Bank

Senders have the right to create overdrafts in their accounts at the Reserve Bank; any overdraft is due and payable, without demand, at the end of the funds transfer day, when the Reserve Bank deems itself to be insecure, or at the time the sender suspends payments or is closed, whichever is earlier

Sender gives the Reserve Bank a security interest in all of sender's assets that are in the possession of the Reserve Bank to secure any obligations to the Reserve Bank, including an overdraft

Senders have 25 calendar days after receiving notice of a payment order to notify a Reserve Bank of an erroneously executed or unauthorized payment order

Correct Answer: A, C

The correct answers are those referencing the authority granted to Reserve Banks and the security interest provisions. Reserve Banks have the right to debit payment amounts from accounts of senders with the Reserve Bank, which aligns with regulatory oversight and control mechanisms. Additionally, the sender gives the Reserve Bank a security interest in all of the sender's assets that are in possession of the Reserve Bank to secure any obligations, including an overdraft, ensuring a form of collateral for the Reserve Bank. These points cover the regulatory and security aspects stated in the agreement.

Discussion

Dex24Options: AC

A&C, page 621. B is wrong because senders "do not" have the right...

Cam22Option: C

The correct answer is C. Sender gives the Reserve Bank a security interest in all of sender's assets that are in the possession of the Reserve Bank to secure any obligations to the Reserve Bank, including an overdraft. This part of the Sender's agreement under 12 CFR 210.28 outlines the security interest provision, which serves as a collateral agreement between the sender and the Reserve Bank, ensuring that the Reserve Bank has a claim on the sender's assets in its possession in case of default on obligations such as overdrafts. This measure is designed to mitigate risk and secure the financial position of the Reserve Bank in its dealings with participants in the payment system.