Regulation CC Warning Exceptions ahead Definitions Business Day

Regulation CC

Warning! Exceptions ahead!

Definitions Business Day Banking Day

General Information Low risk deposits = next business day All other deposits = second business days Longer holds under certain conditions Reg CC applies ONLY to checking accounts

Next-Day Availability Conditions Payable to the accountholder Staffed teller station Special deposit slip or envelope

Next Day Items Cash Electronic Payments U. S. Treasury Checks U. S. Postal Service Money Orders Federal Reserve and Federal Home Loan Bank Checks State and Local Government Checks

General Availability Non-next day items Next-day items that do not qualify for nextday availability

Hold Extensions Deposits at nonproprietary ATMs Cash Withdrawals

Exception Hold Schedule Item Availability Cash and Electronic Payments Next day On-us Checks 2 business days Treasury Checks and U. S. Postal Service Money Orders 5 business days All other items 7 business days

Large Deposits The first $5, 000 = next day Over $5, 000 may be held

Re-deposited Checks $200 next-day availability rule does not apply Watch for checks returned because they were post-dated or missing an endorsement

Repeat Overdrafts Overdrawn for six days during the last six months or overdrawn by $5000 or more for two days during the last six months $200 next-day availability rule does not apply Applies if member was overdrawn for any reason

Reasonable Cause to Doubt Collectability Reasonable cause to believe a check is uncollectible requires the existence of facts that would cause a well-founded belief in the mind of a reasonable person $200 next-day availability rule does not apply

Reasonable Cause Notice Tell the member why you believe the check is uncollectable Retain notice for two years Possible refund of overdraft fees without proper notification

Emergency Conditions An interruption of communications, computer, or other equipment facilities A suspension of payments by another institution A war An emergency condition beyond the control of the depositary credit union

Emergency Conditions Funds must be available for withdrawal within a reasonable period after the emergency ends $200 next-day availability rule does not apply

New Accounts New account = open within last 30 days Not a new account if member has existing transaction accounts Non-next day items = hold at your discretion $200 next-day availability does not apply Traveler’s checks = next-day item

New Account Hold Schedule Item Hold Period Cash and Electronic Payments Next day Treasury checks, U. S. Postal money orders, Federal Reserve and FHLB checks, state and local government checks, cashier’s, certified, teller’s checks, traveler’s checks 2 business days On-us Checks unlimited

When is a Deposit Received? Staffed teller station = when received by the teller. Mailed funds = banking day received Night depository = banking day removed On-premises = when the funds are placed in the ATM Off-premises ATM not serviced frequently = when removed After closing or cutoff hour = next banking day

Cut-off Time 2 p. m. or later for branch office Noon or later for ATMs, contractual branches, or offpremises facilities Different cut-off times allowed

Availability Time By 9 a. m. OR When you open

Payment of Interest Begin accrual not later than the business day on which credit for the funds is received Use availability schedule from Federal Reserve Bank or Federal Home Loan Bank to determine when you receive credit OR When you receive credit on all checks sent for payment or collection

Disclosure Standards Clear and conspicuous In writing Form the consumer can keep (except for lobby and ATM disclosures) Grouped together Uniform reference to days Only one notice required

New Account Disclosure Use the model notice!!!

Timing of New Account Notice Before an account is opened in person or online Next business day for accounts opened by mail

Contents of New Account Notice General availability policy summary Case-by-case hold policy When deposits will be available for withdrawal When deposits are considered received Exception hold requirements Shared ATM information

Subsequent Disclosure Upon request Upon any change in the credit union’s funds-availability policy 30 days before negative change 30 days after positive change

Case-by-Case Notice Member account number Date of deposit Amount of deposit being delayed Date funds will be available for withdrawal

Exception Hold Notice The account number of the member The date of the deposit The amount of the deposit that is being delayed Date funds will be available for withdrawal The reason the exception was invoked

Reasonable Cause to Doubt Collectability Add the reasonable doubt to the hold form Be specific Keep form for two years

Other Notifications Deposit Slips Lobby Notices ATMs

Check 21 The Substitute Check

Components An image of the front and back of the original check MICR line with information from the original check or share draft The following legend: “This is a legal copy of your check. You can use it in the same way you would use the original check. ”

Consumer Rights Expedited recredit when there is a problem with a substitute check Disclosures explaining substitute checks and the members’ recrediting rights

Substitute Check Warranties The substitute check meets the legal equivalence requirement No financial institution or person will be asked to make a payment based on a check that has already been paid

Substitute Check Indemnity Credit unions that process or return a substitute check indemnifies any recipient for any loss incurred if that loss is due to the receipt of the substitute check instead of the original check

Expedited Recredit Good faith claim: Account was incorrectly charged for a substitute check or they have a warranty claim An actual loss was suffered, and The original check or a copy is necessary

Consumer Awareness Disclosure Provide: At account opening if you return checks or substitute checks to members on a regular basis OR When you send a substitute check to member if you don’t