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Regulation
CC
Availability Of Funds And Collection Of Checks - Appendix E
XI. Section 229.17 Initial Disclosures
A. This paragraph requires banks to
provide a notice of their availability policy to all potential
customers prior to opening an account. The requirement of a notice
prior to opening an account requires banks to provide disclosures
prior to accepting a deposit to open an account. Disclosures must
be given at the time the bank accepts an initial deposit regardless
of whether the bank has opened the account yet for the customer.
If a bank, however, receives a written request by mail from a
person asking that an account be opened and the request includes
an initial deposit, the bank may open the account with the deposit,
provided the bank mails the required disclosures to the customer
not later than the business day following the banking day on which
the bank receives the deposit. Similarly, if a bank receives a
telephone request from a customer asking that an account be opened
with a transfer from a separate account of the customer's at the
bank, the disclosure may be mailed not later than the business
day following the banking day of the request.
XII. Section 229.18 Additional Disclosure Requirements
A. 229.18(a) Deposit Slips
1. This paragraph requires banks to
include a notice on all preprinted deposit slips. The deposit
slip notice need only state, somewhere on the front of the deposit
slip, that deposits may not be available for immediate withdrawal.
The notice is required only on preprinted deposit slips--those
printed with the customer's account number and name and furnished
by the bank in response to a customer's order to the bank. A bank
need not include the notice on deposit slips that are not preprinted
and supplied to the customer--such as counter deposit slips--or
on those special deposit slips provided to the customer under
Sec. 229.10(c). A bank is not responsible for ensuring that the
notice appear on deposit slips that the customer does not obtain
from or through the bank. This paragraph applies to preprinted
deposit slips furnished to customers on or after September 1,
1988.
B. 229.18(b) Locations Where Employees Accept Consumer Deposits
1. This paragraph describes the statutory
requirement that a bank post in each location where its employees
accept consumer deposits a notice of its availability policy pertaining
to consumer accounts. The notice that is required must specifically
state the availability periods for the various deposits that may
be made to consumer accounts. The notice need not be posted at
each teller window, but the notice 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 any drive-through teller windows
nor is it required at night depository locations, or at locations
where consumer deposits are not accepted. A bank that acts as
a contractual branch at a particular location must include the
availability policy that applies to its own customers but need
not include the policy that applies to the customers of the bank
for which it is acting as a contractual branch.
C. 229.18(c) Automated Teller Machines
1. This paragraph sets forth the required
notices for ATMs. Paragraph (c)(1) provides that the depositary
bank is responsible for posting a notice on all ATMs at which
deposits can be made to accounts at the depositary bank. The depositary
bank may arrange for a third party, such as the owner or operator
of the ATM, to post the notice and indemnify the depositary bank
from liability if the depositary bank is liable under Sec. 229.21
for the owner or operator failing to provide the required notice.
2. The notice may be posted on a sign,
shown on the screen, or included on deposit envelopes provided
at the ATM. This disclosure must be given before the customer
has made the deposit. Therefore, a notice provided on the customer's
deposit receipt or appearing on the ATM's screen after the customer
has made the deposit would not satisfy this requirement.
3. Paragraph (c)(2) requires a depositary
bank that operates an off- premise ATM from which deposits are
removed not more than two times a week to make a disclosure of
this fact on the off-premise ATM. The notice must disclose to
the customer the days on which deposits made at the ATM will be
considered received.
D. 229.18(d) Upon Request
1. This paragraph requires banks to
provide written notice of their specific availability policy to
any person upon that person's oral or written request. The notice
must be sent within a reasonable period of time following receipt
of the request.
E. 229.18(e) Changes in Policy
1. This paragraph requires banks to
send notices to their customers when the banks change their availability
policies with regard to consumer accounts. A notice may be given
in any form as long as it is clear and conspicuous. If the bank
gives notice of a change by sending the customer a complete new
availability disclosure, the bank must direct the customer to
the changed terms in the disclosure by use of a letter or insert,
or by highlighting the changed terms in the disclosure.
2. Generally, a bank must send a notice
at least 30 calendar days before implementing any change in its
availability policy. If the change results in faster availability
of deposits--for example, if the bank changes its availability
for nonlocal checks from the fifth business day after deposit
to the fourth business day after deposit--the bank need not send
advance notice. The bank must, however, send notice of the change
no later than 30 calendar days after the change is implemented.
A bank is not required to give a notice when there is a change
in Appendix B (reduction of schedules for certain nonlocal checks).
3. A bank that has provided its customers
with a list of ATMs under Sec. 229.16(b)(5) shall provide its
customers with an updated list of ATMs once a year if there are
changes in the list of ATMs previously disclosed to the customers.
XIII. Section 229.19 Miscellaneous
A. 229.19(a) When Funds Are Considered Deposited
1. The time funds must be made available
for withdrawal under this subpart is determined by the day the
deposit is made.Funds received at a contractual branch are considered
deposited when received by a teller at the contractual branch
or deposited into a proprietary ATM of the contractual branch.
(See also, Commentary to Sec. 229.10(c) on deposits made to an
employee of the depositary bank.) This paragraph provides rules
to determine the day funds are considered deposited in various
circumstances.
2. Staffed facilities and ATMs. Funds
received at a staffed teller station or ATM are considered deposited
when received by the teller or placed in the ATM. Funds deposited
to a deposit box in a bank lobby that is accessible to customers
only during regular business hours generally are considered deposited
when placed in the lobby box; a bank may, however, treat deposits
to lobby boxes the same as deposits to night depositories (as
provided in Sec. 229.19(a)(3)), provided a notice appears on the
lobby box informing the customer when such funds will be considered
deposited.
3. Mail. Funds mailed to the depositary
bank are considered deposited on the banking day they are received
by the depositary bank. The funds are received by the depositary
bank at the time the mail is delivered to the bank, even if it
is initially delivered to a mail room, rather than the check processing
area.
4. Other facilities.
a. In addition to deposits at staffed
facilities, at ATMs, and by mail, funds may be deposited at a
facility such as a night depository or a lock box. A night depository
is a receptacle for receipt of deposits, typically used by corporate
depositors when the branch is closed. Funds deposited at a night
depository are considered deposited on the banking day the deposit
is removed, and the contents of the deposit are accessible to
the depositary bank for processing. For example, some businesses
deposit their funds in a locked bag at the night depository late
in the evening, and return to the bank the following day to open
the bag. Other depositors may have an agreement with their bank
that the deposit bag must be opened under the dual control of
the bank and the depositor. In these cases, the funds are considered
deposited when the customer returns to the bank and opens the
deposit bag.
b. A lock box is a post office box used
by a corporation for the collection of bill payments or other
check receipts. The depositary bank generally assumes the responsibility
for collecting the mail from the lock box, processing the checks,
and crediting the corporation for the amount of the deposit. Funds
deposited through a lock box arrangement are considered deposited
on the day the deposit is removed from the lock box and are accessible
to the depositary bank for processing.
5. Certain off-premise ATMs. A special
provision is made for certain off-premise ATMs that are not serviced
daily. Funds deposited at such an ATM are considered deposited
on the day they are removed from the ATM, if the ATM is not serviced
more than two times each week. This provision is intended to address
the practices of some banks of servicing certain remote ATMs infrequently.
If a depositary bank applies this provision with respect to an
ATM, a notice must be posted at the ATM informing depositors that
funds deposited at the ATM may not be considered deposited until
a future day, in accordance with Sec. 229.18.
6. Banking day of deposit.
a. This paragraph also provides that
a deposit received on a day that the depositary bank is closed,
or after the bank's cut-off hour, may be considered made on the
next banking day. Generally, for purposes of the availability
schedules of this subpart, a bank may establish a cut-off hour
of 2 p.m. or later for receipt of deposits at its head office
or branch offices. For receipt of deposits at ATMs, contractual
branches, or other off-premise facilities, such as night depositories
or lock boxes, the depositary bank may establish a cut-off hour
of 12:00 noon or later (either local time of the branch or other
location of the depositary bank at which the account is maintained
or local time of the ATM, contractual branch, or other off-premise
facility). The depositary bank must use the same timing method
for establishing the cut-off hour for all ATMs, contractual branches,
and other off- premise facilities used by its customers. The choice
of cut-off hour must be reflected in the bank's internal procedures,
and the bank must inform its customers of the cut-off hour upon
request. This earlier cut-off for ATM, contractual branch, or
other off-premise deposits is intended to provide greater flexibility
in the servicing of these facilities.
b. Different cut-off hours may be established
for different types of deposits. For example, a bank may establish
a 2 p.m. cut-off for the receipt of check deposits, but a later
cut-off for the receipt of wire transfers. Different cut-off hours
also may be established for deposits received at different locations.
For example, a different cut-off may be established for ATM deposits
than for over-the-counter deposits, or for different teller stations
at the same branch. With the exception of the 12 noon cut-off
for deposits at ATMs and off-premise facilities, no cut- off hour
for receipt of deposits for purposes of this subpart can be established
earlier than 2 p.m.
c. A bank is not required to remain open
until 2 p.m. If a bank closes before 2 p.m., deposits received
after the closing may be considered deposited on the next banking
day. Further, as Sec. 229.2(f) defines the term banking day as
the portion of a business day on which a bank is open to the public
for substantially all of its banking functions, a day, or a portion
of a day, is not necessarily a banking day merely because the
bank is open for only limited functions, such as keeping drive-in
or walk-up teller windows open, when the rest of the bank is closed
to the public. For example, a banking office that usually provides
a full range of banking services may close at 12 noon but leave
a drive-in teller window open for the limited purpose of receiving
deposits and making cash withdrawals. Under those circumstances,
the bank is considered closed and may consider deposits received
after 12 noon as having been received on the next banking day.
The fact that a bank may reopen for substantially all of its banking
functions after 2 p.m., or that it continues its back office operations
throughout the day, would not affect this result. A bank may not,
however, close individual teller stations and reopen them for
next-day's business before 2 p.m. during a banking day.
B. 229.19(b) Availability at Start of Business Day
1. If funds must be made available for
withdrawal on a business day, the funds must be available for
withdrawal by the later of 9 a.m. or the time the depositary bank's
teller facilities, including ATMs, are available for customer
account withdrawals, except under the special rule for cash withdrawals
set forth in Sec. 229.12(d). Thus, if a bank has no ATMs and its
branch facilities are available for customer transactions beginning
at 10 a.m., funds must be available for customer withdrawal beginning
at 10 a.m. If the bank has ATMs that are available 24 hours a
day, rather than establishing 12:01 a.m. as the start of the business
day, this paragraph sets 9 a.m. as the start of the day with respect
to ATM withdrawals. The Board believes that this rule provides
banks with sufficient time to update their accounting systems
to reflect the available funds in customer accounts for that day.
2. The start of business is determined
by the local time of the branch or other location of the depositary
bank at which the account is maintained. For example, if funds
in a customer's account at a west coast bank are first made available
for withdrawal at the start of business on a given day, and the
customer attempts to withdraw the funds at an east coast ATM,
the depositary bank is not required to make the funds available
until 9 a.m. west coast time (12 noon east coast time).
C. 229.19(c) Effect on Policies of Depositary Bank
1. This subpart establishes the maximum
hold that may be placed on customer deposits. A depositary bank
may provide availability to its customers in a shorter time than
prescribed in this subpart. A depositary bank also may adopt different
funds availability policies for different segments of its customer
base, as long as each policy meets the schedules in the regulation.
For example, a bank may differentiate between its corporate and
consumer customers, or may adopt different policies for its consumer
customers based on whether a customer has an overdraft line of
credit associated with the account.
2. This regulation does not affect a
depositary bank's right to accept or reject a check for deposit,
to charge back the customer's account based on a returned check
or notice of nonpayment, or to claim a refund for any credit provided
to the customer. For example, even if a check is returned or a
notice of nonpayment is received after the time by which funds
must be made available for withdrawal in accordance with this
regulation, the depositary bank may charge back the customer's
account for the full amount of the check. (See Sec. 229.33(d)
and Commentary.)
3. Nothing in the regulation requires
a depositary bank to have facilities open for customers to make
withdrawals at specified times or on specified days. For example,
even though the special cash withdrawal rule set forth in Sec.
229.12(d) states that a bank must make up to $400 available for
cash withdrawals no later than 5 p.m. on specific business days,
if a bank does not participate in an ATM system and does not have
any teller windows open at or after 5 p.m., the bank need not
join an ATM system or keep offices open. In this case, the bank
complies with this rule if the funds that are required to be available
for cash withdrawal at 5 p.m. on a particular day are available
for withdrawal at the start of business on the following day.
Similarly, if a depositary bank is closed for customer transactions,
including ATMs, on a day funds must be made available for withdrawal,
the regulation does not require the bank to open.
4. The special cash withdrawal rule in
the Act recognizes that the $400 that must be made available for
cash withdrawal by 5 p.m. on the day specified in the schedule
may exceed a bank's daily ATM cash withdrawal limit and explicitly
provides that the Act does not supersede a bank's policy in this
regard. As a result, if a bank has a policy of limiting cash withdrawals
from automated teller machines to $250 per day, the regulation
would not require that the bank dispense $400 of the proceeds
of the customer's deposit that must be made available for cash
withdrawal on that day.
5. Even though the Act clearly provides
that the bank's ATM withdrawal limit is not superseded by the
federal availability rules on the day funds must first be made
available, the Act does not specifically permit banks to limit
cash withdrawals at ATMs on subsequent days when the entire amount
of the deposit must be made available for withdrawal. The Board
believes that the rationale behind the Act's provision that a
bank's ATM withdrawal limit is not superseded by the requirement
that funds be made available for cash withdrawal applies on subsequent
days. Nothing in the regulation prohibits a depositary bank from
establishing ATM cash withdrawal limits that vary among customers
of the bank, as long as the limit is not dependent on the length
of time funds have been in the customer's account (provided that
the permissible hold has expired).
6. Some small banks, particularly credit
unions, due to lack of secure facilities, keep no cash on their
premises and hence offer no cash withdrawal capability to their
customers. Other banks limit the amount of cash on their premises
due to bonding requirements or cost factors, and consequently
reserve the right to limit the amount of cash each customer can
withdraw over-the-counter on a given day. For example, some banks
require advance notice for large cash withdrawals in order to
limit the amount of cash needed to be maintained on hand at any
time.
7. Nothing in the regulation is intended
to prohibit a bank from limiting the amount of cash that may be
withdrawn at a staffed teller station if the bank has a policy
limiting the amount of cash that may be withdrawn, and if that
policy is applied equally to all customers of the bank, is based
on security, operating, or bonding requirements, and is not dependent
on the length of time the funds have been in the customer's account
(as long as the permissible hold has expired). The regulation,
however, does not authorize such policies if they are otherwise
prohibited by statutory, regulatory, or common law.
D. 229.19(d) Use of Calculated Availability
1. A depositary bank may provide availability
to its nonconsumer accounts on a calculated availability basis.
Under calculated availability, a specified percentage of funds
from check deposits may be made available to the customer on the
next business day, with the remaining percentage deferred until
subsequent days. The determination of the percentage of deposited
funds that will be made available each day is based on the customer's
typical deposit mix as determined by a sample of the customer's
deposits. Use of calculated availability is permitted only if,
on average, the availability terms that result from the sample
are equivalent to or more prompt than the requirements of this
subpart.
E. 229.19(e) Holds on Other Funds
1. Section 607(d) of the Act (12 U.S.C.
4006(d)) provides that once funds are available for withdrawal
under the Act, such funds shall not be frozen solely due to the
subsequent deposit of additional checks that are not yet available
for withdrawal. This provision of the Act is designed to prevent
evasion of the Act's availability requirements.
2. This paragraph clarifies that if a
customer deposits a check in an account (as defined in Sec. 229.2(a)),
the bank may not place a hold on any of the customer's funds so
that the funds that are held exceed the amount of the check deposited
or the total amount of funds held are not made available for withdrawal
within the times required in this subpart. For example, if a bank
places a hold on funds in a customer's non transaction account,
rather than a transaction account, for deposits made to the customer's
transaction account, the bank may place such a hold only to the
extent that the funds held do not exceed the amount of the deposit
and the length of the hold does not exceed the time periods permitted
by this regulation.
3. These restrictions also apply to holds
placed on funds in a customer's account (as defined in Sec. 229.2(a))
if a customer cashes a check at a bank (other than a check drawn
on that bank) over the counter. The regulation does not prohibit
holds that may be placed on other funds of the customer for checks
cashed over the counter, to the extent that the transaction does
not involve a deposit to an account. A bank may not, however,
place a hold on any account when an ``on us'' check is cashed
over the counter. ``On us'' checks are considered finally paid
when cashed (see U.C.C. 4-215(a)(1)).When a customer cashes a
check over the counter and the bank places a hold on an account
of the customer, the bank must give whatever notice would have
been required under Secs. 229.13 or 229.16 had the check been
deposited in the account.
F. 229.19(f) Employee Training and Compliance
1. The Act requires banks to take such
actions as may be necessary to inform fully each employee that
performs duties subject to the Act of the requirements of the
Act, and to establish and maintain procedures reasonably designed
to assure and monitor employee compliance with such requirements.
2. This paragraph requires a bank to
establish procedures to ensure compliance with these requirements
and provide these procedures to the employees responsible for
carrying them out.
G. 229.19(g) Effect of Merger Transaction
1. After banks merge, there is often
a period of adjustment before their operations are consolidated.
This paragraph accommodates this adjustment period by allowing
merged banks to be treated as separate banks for purposes of this
subpart for a period of up to one year after consummation of the
merger transaction, except that a customer of any bank that is
a party to the transaction that has an established account with
that bank may not be treated as a new account holder for any other
party to the transaction for purposes of the new account exception
of Sec. 229.13(a), and a deposit in any branch of the merged bank
is considered deposited in the bank for purposes of the availability
schedules in accordance with Sec. 229.19(a).
2. This rule affects the status of the
combined entity in several areas. For example, this rule would
affect when an ATM is a proprietary ATM (Sec. 229.2(aa) and Sec.
229.12(b)) and when a check is considered drawn on a branch of
the depositary bank (Sec. 229.10(c)(1)(vi)).
3. Merger transaction is defined in Sec.
229.2(t).
Subpart A - General
Subpart B -
Availability of Funds and Disclosure of Funds Availability Policies
Subpart C -
Collection of Checks
Appendices A
& B
Appendices C
& D
Appendix F
Credit
And Banking Laws Menu
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