In case you missed it, the Federal Reserve and CFPB issued a joint proposal on Regulation CC last week. We don’t get too excited about proposals around here but this one is well overdue.
You may recall that way back in 2010 and 2011 there were some changes that affected Regulation CC. First, the check processing regions were consolidated into one, which effectively did away with “nonlocal” checks. Second, the longstanding $100 required to be made available by the next business day on a case-by-case hold, was increased to $200. Unfortunately, Regulation CC was never updated with these changes. The Fed proposed amendments to Regulation CC in March 2011, but those never actually came to fruition. Seven years later, it looks like we are finally starting to get Regulation CC back in line with the times.
First, a final rule regarding the check collection and return provisions in Regulation CC took effect on July 1, 2018. Then, in September 2018, a final rule regarding disputes between banks in cases of substitute or electronic checks was issued. Compliance is mandatory with those changes on January 1, 2019. A few of the changes proposed include increasing the $200 to $225 (on April 1, 2020), implementing five year adjustments to certain threshold amounts, and extending Regulation CC coverage to additional U.S. Territories (for example, Guam). It also makes some technical changes to Regulation DD (TISA) for items related to Regulation CC
The proposal is also reopening the comment period for the 2011 proposal. It states:
The Agencies recognize there may have been important changes in markets, technology, or industry practice since the public submitted comments seven years ago in response to the Board’s 2011 Funds Availability Proposal. The Board and the Bureau, therefore, are now reopening the comment period in order to provide an opportunity for the public to provide comments with new, additional, or different views on the 2011 Funds Availability Proposal. In taking this step, the Agencies have not made any decision on whether to pursue any particular course with regard to the 2011 Funds Availability Proposal, including whether to make it or any aspects of it final. Instead, reopening the comment period will provide the Agencies with up-to-date public input to consider in deciding on a future course with regard to the 2011 Funds Availability Proposal. Comments on the 2011 Funds Availability Proposal that were previously submitted during the initial comment period, which ended on June 3, 2011, remain part of the rulemaking docket. To assist with reconciling comments from parties who submitted comments in 2011 and who again submit comments in 2018 that reflect changes to their previous viewpoints, the Agencies request that such commenters clarify the relationship between their two comments. Specifically, the Agencies request that the commenters clarify whether their 2018 comments in part or in whole supersede their previously submitted comments.
That seems awfully confusing, not only for the agencies but also the commenters. Such is the world of regulation. 🙂
Comments on both proposals are due 60 days from publication in Federal Register.