The central fact is that the paper survives. A check deposited by image is not consumed by the deposit. The physical instrument stays where it was, and it can be deposited again, at the same bank or a different one, by the same person or by someone else who ends up holding it. Regulation CC's answer is an indemnity that runs between banks. Under 229.34(f)(1) and (f)(2), a depositary bank that accepts an image, does not receive the original check, receives settlement for it, and does not receive the check back unpaid must indemnify a depositary bank that later accepts the original for deposit, for losses that bank incurs "due to the check having already been paid."
And then the carve-out, which explains a universally followed instruction nobody explains. Section 229.34(f)(3): "A depositary bank may not make an indemnity claim under paragraph (f)(2) of this section if the original check it accepted for deposit bore a restrictive indorsement inconsistent with the means of deposit." That is the legal reason a bank asks a customer to write "For mobile deposit only" on the back of a check before photographing it. A bank that later takes the same paper, in the face of an endorsement saying it was deposited by image, cannot then claim indemnity from the bank that took the image. The words on the back of the check are a risk allocation, and they also do practical work in the other direction: a teller reading them is likely to refuse the paper altogether, which prevents the duplicate rather than merely deciding who pays for it.
Note the limit of what 229.34(f) settles. It allocates the loss between banks. Whether the customer who deposited twice, or whose check was deposited twice by someone else, ends up bearing the loss is a question for the deposit agreement and for ordinary chargeback rights, not for this provision.
What the image becomes, and why the paper stopped being unique. An image sent to a bank under an agreement between the sender and the receiving bank is an "electronic check" (229.2(ggg)). Where a paper reproduction is needed, the regulation defines a "substitute check": a paper reproduction containing an image of the front and back, bearing a conforming magnetic-ink line, and suitable for automated processing in the same manner as the original (229.2(aaa)). The reason a copy can stand in for the instrument at all is the Check Clearing for the 21st Century Act, whose purposes Congress stated as facilitating check truncation by authorizing substitute checks, fostering innovation in check collection without mandating electronic receipt, and improving the efficiency of the payments system (12 USC 5001(b)). Under 12 USC 5003(b) a substitute check is "the legal equivalent of the original check for all purposes" where it accurately represents the information on both sides and bears the prescribed legend.
Depositing remotely costs a day on four specific kinds of check. Regulation CC's next-day availability rule at 229.10(c)(1) lists seven items, and four of them condition next-business-day availability on the deposit being made "in person to an employee of the depositary bank": a U.S. Postal Service money order, a check drawn on a Federal Reserve Bank or Federal Home Loan Bank, a check drawn by a state or unit of general local government, and a cashier's, certified, or teller's check. Section 229.10(c)(2) then gives the bank until the second business day for exactly those four when the deposit is not made in person. A mobile deposit is not a deposit in person, so any of those four instruments deposited by phone is a day slower than the same instrument handed to a teller.
The distinction is worth stating precisely, because the popular version of this rule is too broad. A check drawn on the Treasury of the United States gets next-business-day availability when deposited in an account held by a payee, with no in-person condition, so a federal tax refund check does not lose anything by being deposited remotely. Two further conditions attach to some of the four: the deposit must be into an account held by a payee of the check, and the bank may require a special deposit slip or envelope identifying the type of check (229.10(c)(3)) for state and local government checks and for cashier's, certified and teller's checks.
Availability is not collection. Money the bank has made available under these rules can still be charged back if the item is returned. That gap, and what it means for someone paid with a large instrument by a stranger, is covered on the cashier's check page.
