This guide is intended to help financial institutions comply with Regulation CC, Availability of Funds and Collection of Checks. This guide should not be interpreted as a comprehensive statement of the regulation. Rather, it is intended to give a broad overview of the regulation's requirements. The full regulation is available on the Government Printing Office's website.
By highlighting the rules in these areas and giving examples illustrating application of the rules, this guide may answer your institution's questions about Regulation CC.
Disclosing Your Availability Policy -->
Regulation CC requires that financial institutions provide customers who have a transaction account with disclosures stating when their funds will be available for withdrawal; many institutions use the model disclosure statements included in Regulation CC. You can monitor whether your disclosed policy reflects your practices by comparing specific instances of deposit transactions with your institution's disclosure statements to see if they are the same. If they are not, your institution must either change its practices or change its disclosure statements to reflect its practices. Verification should be done each time your institution's funds availability practices are changed. Remember, while you are confirming that your disclosure statements match your practices, you should also verify that your practices conform to the regulation.
Employee Training to Ensure Compliance -->
Your institution is required to establish procedures to ensure that it complies with the requirements of Regulation CC and to provide a copy of these procedures to all employees who perform duties affected by the regulation. For example, employees who issue hold notices should be instructed on when to hold funds and how to notify customers that funds are being held.
Your employees should also be instructed about providing availability disclosures. Such disclosures must be provided to customers before they open a new account. If the availability terms on an existing account are to be changed, a new disclosure should be provided to consumer customers 30 days before the change is implemented or, if the change will improve the availability of funds to the customer, no later than 30 days after the change becomes effective.
Posting Your Policy Where Employees Accept Deposits -->
Your institution must post, in each location where employees accept consumer deposits, a notice of your availability policy pertaining to consumer accounts. The notice must specifically state the availability periods for the various types of deposits that may be made to consumer accounts. The notice need not be posted at each teller window, but it must be posted in a place where consumers seeking to make deposits are likely to see it before making their deposits. For example, the notice might be posted at the point where the line forms for teller service in the lobby. The notice is not required at drive-through teller windows or at night depository locations, but it is required at all automated teller machines.
Printing Your Availability Notice on Deposit Slips -->
Regulation CC requires that financial institutions include a notice of funds availability on the front of all preprinted deposit slips. The notice need state only that deposits may not be available for immediate withdrawal. The notice is required only on deposit slips that are preprinted with the customer's name and account number and furnished by your institution in response to a customer's order. It need not appear on deposit slips that are not preprinted�such as counter deposit slips�or on special deposit slips used to secure next-day availability for state and local government, cashier's, certified, or teller's checks. In addition, your institution is not responsible for ensuring that the notice appears on deposit slips that the customer does not obtain from or through you.
Determining Funds Availability -->
Regulation CC states when deposits of various types must be made available to your customers, measured in business days following the banking day on which the deposit is made. Business days are defined as Mondays through Fridays except federal holidays. A banking day is any business day (up to the bank's cut-off hour) when your institution is open for substantially all of its banking activities. All references to the number of days to funds availability in this guide indicate maximum time limits for making funds available; your institution may provide earlier availability of funds if it chooses and may extend the time when funds are available up to periods set by Regulation CC on a case-by-case basis.
The following types of deposits must be made available on the first business day following the banking day of deposit ("next-day availability"):
Exceptions: When deposits of types 1, 4, 5, 6, and 7 are not made in person (for example, when they are made at one of your ATMs), the funds must be made available by the second business day. Deposits, cash or check, made at an ATM that you do not own (a "nonproprietary" ATM) must be made available by the fifth business day.
For checks of types not discussed above, funds generally must be made available in accordance with a schedule specified in Regulation CC. That schedule differentiates between "local" or "nonlocal" checks. Since there is now only one Reserve Bank check-processing region, however, there are no longer any "nonlocal" checks for purposes of Regulation CC.
Funds from local checks must be made available by the second business day following the day of deposit.
There are minor exceptions involving, for example, certain checks deposited outside the continental United States and cash withdrawals of the proceeds of certain checks. A detailed explanation can be found in section 229.12 of Regulation CC.
But remember, the Expedited Funds Availability Act requires the first $200 of a deposit that is not already subject to next-day availability to be made available by the first business day following the day of deposit.
This does not apply to deposits at nonproprietary ATMs or to deposits subject to certain exception holds. Further explanation can be found in section 229.13 of Regulation CC.
Delaying Funds Availability -->
For certain types of deposits, Regulation CC permits financial institutions to delay, for a "reasonable period of time," the availability of funds. A "reasonable" time period is generally defined as one additional business day (making a total of two business days) for on-us checks, and five additional business days (total of seven) for local checks; your institution may impose longer exception holds, but you may have the burden of proving that they are "reasonable."
If you decide to hold funds beyond the period specified in your institution's general availability policy, you must give the customer a notice at the time of the deposit explaining why the funds are being held and when they will be available. If the deposit is not made in person to an employee of your institution or if you decide to extend the time when deposited funds will be made available after the deposit has been made, you must mail or deliver the notice to the customer not later than the first business day after the banking day on which the deposit is made.
For examples illustrating rules for withdrawals by check, see Applying Funds Availability Rules.