In the case of Federal Reserve Bank of Richmond v. Malloy et al., Trading as Malloy Brothers, the Supreme Court ruled in favor of the Federal Reserve Bank in 1923. The dispute arose when a check was drawn on an account with insufficient funds and subsequently returned to its issuer by the bank due to non-payment. The court held that under Section 13 of the Federal Reserve Act, reserve banks have no obligation to pay checks presented for payment if there are not sufficient funds available in their accounts at that time. Furthermore, they also do not need to notify or return unpaid checks immediately upon receipt but can wait until close-of-business hours before doing so.

In the dissenting opinion for Federal Reserve Bank of Richmond v. Malloy et al., it was argued that the majority's decision to allow a Federal Reserve Bank to sue in federal court, despite not being federally chartered or owned by the U.S. government, contradicted previous rulings and interpretations of jurisdictional statutes. The dissent emphasized that these banks are privately controlled corporations whose shares can be bought and sold on open markets, thus they should not enjoy privileges typically reserved for federal entities. It was further contended that allowing such lawsuits could potentially flood federal courts with cases better suited for state courts, undermining their ability to handle matters truly within their purview.