Regulation CC Threshold Changes

Issue/Inquiry

Is the Bank’s Funds Availability Disclosure prepared for compliance with the new changes to Regulation CC going into effect on July 1, 2020? What changes are to be expected?

Response Summary

The changes to the Bank’s Funds Availability Disclosure, in accordance with Regulation CC requirements going into effect on July 1, 2020, should include several increased adjustments in funds availability threshold amounts.

Response Detail

Effective July 1, 2020, the following changes will be made to the Funds Availability rules of Regulation CC to give effect to Dodd-Frank Wall Street Reform and Consumer Protection Act requirements in order to adjust for inflation every five years:

• The minimum amount of deposited funds that a bank must make available for withdrawal by the opening of a business on the next day for certain check deposits is increased from $200 to $225. 12 CFR §229.10(c).
• The amount a bank must make available when using the Electronic Fund Transfer Act’s permissive adjustment to the Funds Availability rules for withdrawals by cash or other means is increased from $400 to $450. 12 CFR §229.12(d).
• The amount of funds deposited by certain checks in a new account that are subject to next-day availability is increased from $5,000 to $5,525. 12 CFR §229.13(a).
• The threshold for using an exception to the Funds Availability schedules if the aggregate amount of checks in any one banking day exceeds the threshold amount is increased from $5,000 to $5,525. 12 CFR §229.13(b).
• The threshold for determining whether an account has been repeatedly overdrawn is increased from $5,000 to $5,525. 12 CFR §229.13(d).

When the Bank updates its Funds Availability Disclosure, it should ensure that the changes are consistent with the new Regulation CC requirements.

Regulation CC requires a financial institution to send a written notice to consumer accountholders at least 30 days before implementing a change to the institution’s Funds Availability policy, and states that “any change which expedites the availability of such funds shall be disclosed not later than 30 days after implementation.”  12 CFR §229.18(e).

In this case, since the increased threshold amounts are related solely to Dodd-Frank Act adjustments and make funds available to consumers sooner than they did in the past, such changes must be sent to customers in writing no later than 30 days after implementation.

This response is for informational purposes only and is not intended for legal guidance.

This entry was posted on Monday, May 11th, 2020 at 11:49 am.