The July 1, 2020, effective date for the Regulation CC changes has come and gone. But, that doesn’t mean additional questions won’t continue to arise after you implement the changes.
Below are the two most frequently asked questions we’ve received lately:
Question: Are checks deposited through Automated Teller Machines (ATMs) into a transaction subject to the new availability thresholds?
Answer: For proprietary ATMs, yes. For non-proprietary ATMs, there is an exception. Specifically, the Commentary to §229.10(c) #5 states the $225 next-day rules don’t apply, and this is reiterated in the Commentary to §229.12(f), as well.
Your bank’s Funds Availability Disclosure will be the driver. Most often we see these disclosures state something to the effect of “checks deposited through ATMs into a transaction account will follow our normal funds availability schedule”. As a reminder, ensure both what you’re doing, and what you say you’re doing align with one another and the regulation.
Question: Are checks deposited through Mobile Deposit (phone app) into a transaction account subject to Regulation CC?
Answer: The answer is “yes” and “no”. Mobile deposits are NOT subject to the funds availability rules of Regulation CC (aka Subpart B), but they are subject to the check collection rules of Regulation CC (aka Subpart C). While you don’t have to make funds from mobile deposits available in accordance with the Regulation CC timeframes or include them in your Funds Availability Disclosure, funds availability for mobile deposits should be addressed in your mobile banking agreement. While you have some latitude, we generally recommend making mobile deposits available similar to paper checks.
In addition to the things noted above, and while it will vary from bank to bank, we’ve compiled a list of things you don’t want to forget to do, such as:
Your customers should have already been notified of these particular changes (by July 31st). If you haven’t done this, you should still do so ASAP! As a reminder, customers should typically receive notice of Regulation CC changes 30 days before the change is effective; however, when the change benefits the customer, notice may be provided up to 30 days after the effective date.
- Update the following, as applicable:
- Policies, procedures, and processes;
- Technology/systems (if automated);
- Funds availability poster (if it contains this level of detail); and,
- Account terms and conditions.
- Update training material and train appropriate staff.
As we’ve been conducting reviews in banks, one common error we’re finding is miscalculating the amount that should be made available to the customer. To help eliminate this error, we’re encouraging banks to explore system capabilities. Many bank systems have the ability to automatically calculate holds and print notices, yet we don’t typically see it utilized. Given that the dollar amount changes are in odd amounts and will now adjust every five years based upon the consumer price index, this may be worth exploring.
If you need additional training on the Regulation CC changes, be sure to check out our Regulation CC webinar, which is available now On Demand.
Micaela joined Banker’s Compliance Consulting with over 10 years of experience in the banking industry on what she likes to consider nearly all sides of the table. Her retail banking experience includes being a teller, personal banker, financial intern, and accounting specialist within a midsize and large bank and the Farm Credit System. She was also an OCC examiner for six years.
Micaela has a Bachelor’s Degree in Financial Markets, Investment Science & Portfolio Management, and Management from the University of Nebraska Omaha and a Master’s Degree in Organizational Leadership from the College of Saint Mary. She is also a Certified Anti-Money Laundering Specialist (CAMS). Micaela thoroughly enjoys compliance and BSA regulations, especially when she is helping others to navigate through them, which makes BCC an excellent fit.
Micaela loves to spend her free time with her family, especially husband Brian and daughter Jocelyn, and any other kiddos they may be blessed with at any given time. Micaela and Brian are passionate about adoption and will hopefully soon be blessed with the opportunity to adopt siblings through the foster care system. She is active in her faith, her community, and enjoys traveling, being outside, and squeezing in running and hiking (ideally extreme and in faraway places) with friends.