Regulation CC is one of those regulations that doesn’t get a lot of attention anymore, yet when we conduct compliance reviews, we often find violations in this area, specifically when it comes to case-by-case and/or exception holds. One common error we see is using the “large deposit” reason when placing an exception hold.
Regulation CC allows you to delay the availability of a check for 2 business days (on-us checks) or 7 business days for other check types. To take advantage of this extra time, you must provide the customer a reason. If the check is more than $5,000, you can use the “large deposit” reason. While that seems pretty simple, banks mess this up all the time. Most commonly they try to use this reason for a check that’s $5,000 or less. Another thing many banks don’t realize is that use of this reason also allows for an automatic case-by-case hold on the first $5,000. Here’s an example:
Assume a customer deposits a $12,000 personal check on Monday the 1st and the institution decides to place an exception hold using the “large deposit” reason. This means $200 needs to be available on Tuesday the 2nd; $4,800 available on Wednesday the 3rd, and, $7,000 on Wednesday the 10th.
We don’t want Regulation CC to become “out of sight, out of mind” at your institution. It’s important you understand the ins and outs of Regulation CC’s funds availability rules, how to delay the availability of funds using case-by-case or exception holds, the customer notification requirements, etc. We will be offering a one-hour webinar on the funds availability and Check 21 requirements found in Regulation CC. Register today and let us get you on the right track!
Amy brings many years of banking and compliance experience to Banker’s Compliance Consulting. She has worked for both large and small financial institutions and spent time working in every area of a bank. She started out as a teller in college and eventually became a branch manager.
Her love, however, was always compliance. Amy began her career with Banker’s Compliance Consulting in 2000. Her knowledge and experiences have allowed her to develop a well-rounded and practical approach to regulatory compliance. Amy is CRCM certified, has a Bachelor’s Degree in Business Administration, and is a graduate of the ABA Compliance School.
Amy & her husband have two children at home and stay busy following their activities. They spend a lot of time in the bleachers!