Changing Deposit Cut-Off Time

Issue/Inquiry

The Bank is in the process of updating its funds availability initial disclosure and branch posting, which previously had a cut-off time of 4 p.m. for business days. The disclosure and posting will no longer indicate the business day cut-off time, as the new time will be when the branch closes, which differs for each branch. 
Should the Bank make a generalized statement, such as “If you make a deposit before branch closing”, or should it list the various times its branches are open?

Response Summary

The Bank does not have to disclose all of the branch cut-off times, but it must disclose the earliest time and note that some locations have different cut-off times. Since this is a change in the Bank’s deposit availability, customers must be notified at least 30 calendar days in advance, unless the change results in quicker availability. No form of the notice is prescribed by Regulation DD, so long as it is clear and conspicuous.

Response Detail

As part of the availability disclosures when an account is opened, Regulation DD requires the following information to be disclosed:

The business day cut-off time used by the bank must be disclosed and if some locations have different cut-off times the bank must note this in the disclosure and state the earliest time that might apply. A bank need not list all of the different cut-off times that might apply. If a bank does not have a cut-off time prior to its closing time, the bank need not disclose a cut-off time. Official Interpretations, ¶229.16(b)-B.6.

In this case, the Bank can do one of the following:

• Disclose the earliest cut-off time and indicate that some branches may have later cut-off times
• Disclosure all of the cut-off times of the branches.

As noted above, Regulation DD does not require the Bank to list all of the cut-off times, but from the standpoint of customer convenience, this may be a useful approach.

The Bank will have to notify its customers at least 30 calendar days prior to implementing any change in its availability policy, unless the change results in quicker availability, in which case, no notification is required. There is no required form of the notice, so long as it is clear and conspicuous. The Bank could provide the notice in the periodic statement sent to customers. If the notice is in the form of a new funds availability disclosure, the Bank must direct the customer to the changed terms, either by letter or insert, or by highlighting the changed terms in the disclosure. Official Interpretations, ¶229.18(e)-E.1, 2.

With respect to the cut-off times for ATM deposits, the Bank does not have to disclose this information except in the following manner:

The choice of cut-off hour must be reflected in the bank's internal procedures, and the bank must inform its customers of the cut-off hour upon request. Official Interpretations, ¶229.19(a)-A.6.

This entry was posted on Monday, February 22nd, 2016 at 3:00 pm.