79–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–917 

EXPEDITED FUNDS AVAILABILITY DOLLAR LIMITS 

ADJUSTMENT ACT OF 2008 

DECEMBER 9, 2008.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. FRANK of Massachusetts, from the Committee on Financial 

Services, submitted the following 

R E P O R T 

[To accompany H.R. 6871] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 6871) to amend the Expedited Funds Availability Act to 

provide a 1-time adjustment in certain dollar amounts to account 

for inflation over the 21 years since the enactment of such Act, to 

provide for future adjustments of such amounts on a regular basis, 

and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do 

pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Hearings ................................................................................................................... 2 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 3 

Committee Oversight Findings ............................................................................... 3 

Performance Goals and Objectives ......................................................................... 3 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 3 

Committee Cost Estimate ....................................................................................... 3 

Congressional Budget Office Estimate ................................................................... 4 

Federal Mandates Statement ................................................................................. 5 

Advisory Committee Statement .............................................................................. 5 

Constitutional Authority Statement ...................................................................... 5 

Applicability to Legislative Branch ........................................................................ 5 

Earmark Identification ............................................................................................ 5 

Section-by-Section Analysis of the Legislation ...................................................... 5 

Changes in Existing Law Made by the Bill, as Reported ..................................... 6 


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PURPOSE AND SUMMARY

H.R. 6871, the ‘‘Expedited Funds Availability Dollar Limits Adjustment Act of 2008,’’ directs the Federal Reserve to issue regulations within a year to make an one-time adjustment to certain statutory dollar amount limits under the Expedited Funds Availability 

Act and to index these amounts at least every five years based on 

a cost-of-living adjustment. 

BACKGROUND AND NEED FOR LEGISLATION

The Expedited Funds Availability Act (EFAA), enacted in 1987, 

establishes the maximum time periods that banks can hold funds 

deposited into transaction accounts before those funds must be 

made available for withdrawal. These time periods are set based 

upon the nature of the deposit and whether the deposited checks 

are drawn on banks in the same region (local checks) or in other 

regions (non-local checks). The Federal Reserve implements the 

EFAA under Regulation CC. 

Section 603 of the EFAA requires that banks give next-day availability for up to the first $100 deposited on any one business day 

by a check or checks that are otherwise not eligible for next-day 

availability. Section 603 of the EFAA also allows a bank to extend 

by one business day the time that funds deposited by local checks, 

non-local checks, or other checks deposited by a non-proprietary 

ATM are available for withdrawal by cash or other means. A bank 

that uses this extension must make $400 of those funds available 

for cash withdrawal (or the maximum amount allowable in the case 

of a withdrawal from an ATM but no more than $400) by no later 

than 5 p.m. of the business day on which the funds are available 

based upon the maximum hold periods. 

Since the EFAA was enacted in the 1980s, inflation has reduced 

substantially the real value of the cash-withdrawal limits of $100 

and $400 included under the statute. For this reason, the Federal 

Reserve noted in the Report to the Congress on the Check Clearing 

for the 21st Century Act of 2003 that was released in April 2007 

that ‘‘[i]ncreasing these limits may materially benefit consumers, 

particularly those with lower incomes who maintain low account 

balances and need quicker availability for deposited checks.’’ (Report, page 28). 

HEARINGS

The Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled, ‘‘Implementation of the Check Clearing 

for the 21st Century Act,’’ on Wednesday, April 20, 2005, (109th 

Congress), to review the implementation of the Act and its impact 

on consumers, including the appropriateness of the time periods 

and amounts limits under the EFAA in light of the changes allowed under the Act. The following witnesses testified at the hearing: 

• Ms. Louise L. Roseman, Director, Division of Reserve Bank Operations and Payment Systems, The Federal Reserve Board of the 

United States 

• Ms. Elizabeth A. Duke, Chairman, American Bankers Association 


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• Mr. Mark E. Budnitz, Professor, Georgia State University College of Law 

• Mr. David Hayes, Chairman, Independent Community Bankers 

of America 

• Mr. Elliott C. McEntee, President and CEO, NACHA—The 

Electronic Payments Association 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

September 16, 2008, and ordered H.R. 6871, Expedited Funds 

Availability Dollar Limits Adjustment Act of 2008, reported to the 

House by a voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. No record votes were 

taken with in conjunction with the consideration of this legislation. 

A motion by Mr. Frank to report the bill to the House with a favorable recommendation was agreed to by a voice vote. 

No amendments were offered during consideration of the bill. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

H.R. 6871 directs the Federal Reserve to issue regulations within 

a year to make an one-time adjustment to certain statutory dollar 

amount limits under the Expedited Funds Availability Act and to 

index these amounts at least every five years based on a cost-ofliving adjustment. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 


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CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 26, 2008. 

Hon. BARNEY FRANK, 

Chairman, Committee on Financial Services, House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 6871, the Expedited 

Funds Availability Dollar Limits Adjustment Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Grant Driessen. 

Sincerely, 

ROBERT A. SUNSHINE

(For Peter R. Orszag, Director). 

Enclosure. 

H.R. 6871—Expedited Funds Availability Dollar Limits Adjustment 

Act 

The Expedited Funds Availability Act (Title VI of Public Law 

100–86) was enacted in 1987 and standardized the schedule under 

which funds deposited into transaction accounts of depository institutions become available for withdrawal. It requires all banks to 

make the first $100 deposited by check available for cash withdrawal on the next business day, and an additional $400 a day 

later if the depository institution is located locally (or four days 

later if not located locally). H.R. 6871 would increase those figures 

from $100 to $175 and from $400 to $700, respectively. Additionally, H.R. 6871 would require that adjustments for inflation be 

made to those figures at least every five years. 

Based on information from the Board of Governors of the Federal 

Reserve, CBO estimates that the bill would have no effect on the 

federal budget. Any budgetary effects on the Federal Reserve would 

be recorded as changes in revenues, but CBO estimates that the 

Federal Reserve would incur no significant additional costs to issue 

regulations required by the bill. CBO estimates that the bill would 

have no effect on federal spending. 

By increasing the amount of funds from certain deposits that 

must be made available for withdrawal within standard time periods, H.R. 6871 would impose a private-sector mandate, as defined 

in the Unfunded Mandates Reform Act (UMRA), on depository institutions. To comply with the mandate, banks and credit unions 

would need to adjust their electronic systems to allow account holders access to the additional funds, and many institutions could 

have to convert some of their interest-bearing holdings to have 

more cash available at any given time. According to industry 

sources the cost per institution would not be significant. However, 

because of the large number of depository institutions that would 

have to comply with the mandates (more than 16,000), CBO estiVerDate Aug 31 2005 02:13 Dec 10, 2008 Jkt 079008 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\HR917.XXX HR917

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mates that the aggregate cost of the mandate would probably exceed the annual threshold established in UMRA for private-sector 

mandates ($136 million in 2008, adjusted annually for inflation) in 

at least one of the first five years the mandate is in effect. 

H.R. 6871 contains no intergovernmental mandates as defined in 

UMRA and would not affect the budgets of state, local, or tribal 

governments. 

The CBO staff contact for this estimate is Grant Driessen. This 

estimate was approved by G. Thomas Woodward, Assistant Director for Tax Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by article 

1, section 8, clause 1 (relating to the general welfare of the United 

States) and clause 3 (relating to the power to regulate interstate 

commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 6871 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Establishes as a short title the ‘‘Expedited Funds Availability 

Dollar Limits Adjustment Act of 2008.’’ 

Section 2. 1-time adjustment of dollar amounts 

Under the Expedited Funds Availability Act (EFAA), the first 

$100 of a check deposited into a transaction account at a depository 

institution must be made available for use at the opening of business on the business day after a deposit is made. The bill would 

raise the $100 amount to $175. Under the EFAA, a depository institution that opts to delay the availability of deposited funds by 

one business day for cash withdrawals must exempt $400 from the 


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amount that can be held and make the $400 available by 5 p.m. 

on the business day specified under the availability schedules 

under Regulation CC. The bill would increase this amount to $700. 

The bill directs the Federal Reserve to issue regulations to implement this Section within one year of the date of the enactment of 

the bill. 

Section 3. Subsequent indexation of dollar amounts 

The bill directs the Federal Reserve to index for inflation the dollar amounts referenced in Section 2 of the bill, at least every five 

years. The cost-of-living adjustment is based on the published annual value of the Consumer Price Index for all-urban consumers 

published by the Secretary of Labor. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

EXPEDITED FUNDS AVAILABILITY ACT 

TITLE VI—EXPEDITED FUNDS 

AVAILABILITY 

* * * * * * * 

SEC. 603. EXPEDITED FUNDS AVAILABILITY SCHEDULES. 

(a) NEXT BUSINESS DAY AVAILABILITY FOR CERTAIN DEPOSITS.— 

(1) * * * 

(2) GOVERNMENT CHECKS; CERTAIN OTHER CHECKS.—Funds 

deposited in an account at a depository institution by check 

shall be available for withdrawal not later than the business 

day after the business day on which such funds are deposited 

in the case of— 

(A) * * * 

* * * * * * * 

(D) the first ø$100¿ $175 deposited by check or checks 

on any one business day; 

* * * * * * * 

(b) PERMANENT SCHEDULE.— 

(1) * * * 

* * * * * * * 

(3) TIME PERIOD ADJUSTMENTS FOR CASH WITHDRAWAL OF

CERTAIN CHECKS.— 

(A) * * * 

(B) 5 P.M. CASH AVAILABILITY.—Not more than ø$400¿ 

$700 (or the maximum amount allowable in the case of a 

withdrawal from an automated teller machine but not 

more than ø$400¿ $700) of funds deposited by one or more 

checks to which this paragraph applies shall be available 

for cash withdrawal not later than 5 o’clock post meridian 


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of the business day on which such funds are available 

under paragraph (1) or (2). If funds deposited by checks 

described in both paragraph (1) and paragraph (2) become 

available for cash withdrawal under this paragraph on the 

same business day, the limitation contained in this subparagraph shall apply to the aggregate amount of such 

funds. 

* * * * * * * 

SEC. 607. MISCELLANEOUS PROVISIONS. 

(a) * * * 

* * * * * * * 

(f) ADJUSTMENT FOR INFLATION.— 

(1) IN GENERAL.—Before the end of the 6-year period beginning on the date of the enactment of the Expedited Funds Availability Dollar Limits Adjustment Act of 2008 and at least every 

5 years after the expiration of such period, each dollar amount 

contained in sections 603(a)(2)(D) and 603(b)(3)(B) shall be increased by an amount determined by the Board to be equal to— 

(A) such dollar amount, multiplied by 

(B) the cost-of-living adjustment for such period. 

(2) COST OF LIVING ADJUSTMENT.—For purposes of paragraph 

(1), the cost-of-living adjustment for any period is the percentage (if any) by which— 

(A) the published annual value of the Consumer Price 

Index for the calendar year preceding the date of the determination by the Board under paragraph (1), exceeds 

(B) the published annual value of the Consumer Price 

Index for the calendar year 2008. 

(3) CONSUMER PRICE INDEX DEFINED.—For purposes of paragraph (2), the term ‘‘Consumer Price Index’’ means the Consumer Price Index for all-urban consumers published by the 

Secretary of Labor. 

(4) ROUNDING.—If any increase determined under paragraph 

(1) is not a multiple of $25, such increase shall be rounded to 

the nearest multiple of $25. 

(5) PUBLICATION.—The Board shall publish the adjusted 

amount for each dollar amount determined under paragraph 

(1) in the Federal Register promptly upon making such determination. 

(6) EFFECTIVE DATE.—The adjusted amounts shall take effect 

at the end of the 120-day period beginning on the date by which 

a determination is required under paragraph (1). 

* * * * * * * 

Æ 


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