Reg CC Look-back Post July 1 Changes

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:

  • Notify customers:

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);
    • Disclosures;
    • Hold notices;
    • 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.

Published
2020/08/04

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