Source: https://www.ncua.gov/regulation-supervision/manuals-guides/federal-consumer-financial-protection-guide/compliance-management/deposit-regulations/expedited-funds-availability-act-regulation-cc
Timestamp: 2019-11-12 16:57:02
Document Index: 375962848

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Expedited Funds Availability Act (Regulation CC) | National Credit Union Administration
Regulation CC (12 CFR Part 229) implements two laws—the Expedited Funds Availability Act (EFAA), which was enacted in August 1987 and became effective in September 1988, and the Check Clearing for the 21st Century Act (Check 21), which was enacted in October 2003 and became effective on October 28, 2004.
Regulation CC sets forth the requirements that credit unions make funds deposited into transaction accounts available according to specified time schedules and that they disclose their funds availability policies to their members. It also establishes rules designed to speed the collection and return of unpaid checks. The Check 21 section of the regulation describes requirements that affect credit unions that create or receive substitute checks, including requirements related to consumer disclosures and expedited re-credit procedures.
Expedited Funds Availability Act can be found here (opens new window). Full text of Regulation CC can be found here (opens new window).
Transaction risk can occur when proper “holds” are not enforced, resulting in a loss to the credit union.
Compliance risk can occur when the credit union fails to implement the necessary controls to comply with Regulation CC.
Reputation risk can occur when the credit union incurs fines and penalties or receives decreased member confidence as a result of failure to comply with Regulation CC.
To determine that the credit union’s funds availability policies are in compliance with Regulation CC.
To determine that the credit union has established internal controls for compliance with Regulation CC’s provisions relating to funds availability.
To determine that the credit union has established a training program for applicable employees addressing Regulation CC responsibilities.
To determine that the credit union maintains records of compliance with Regulation CC for a period of two years.
To evaluate the credit union’s compliance with content and timing requirements.
The procedures below cover all aspects and regulations contained within Regulation CC. Examiners may select from the procedures below to test aspects of Regulation CC compliance during a risk-focused examination.
A credit union may delay funds availability for some deposits on a case-by-case basis and for other deposits on an automatic basis. In addition, the credit union may make decisions concerning holds and maintain records at branches as well as at the main office. Therefore, to check on the credit union’s compliance with its holds policies, the examiner must determine not only the types of holds policies the credit union has, but how decisions are made and where records are maintained. If a branch makes its own decision and maintains its own records, such as in a decentralized structure, sampling may be done at the branch. If decisions to delay availability are either centralized or made at a regional processing center and records are maintained there, sampling for compliance may be made at that location.
Determine the types of transaction accounts, as defined in Regulation D, 12 CFR § 204.2(e) (opens new window) (demand deposits, NOW accounts, and ATS accounts), offered by the credit union.
Obtain copies of the forms used by the credit union for transaction accounts, as applicable:
Specific availability policy disclosures
Exception hold notices
Case-by-case hold notices
Special deposit slips
Determine, by account type, the credit union’s specific funds availability policies with regard to deposits.
Determine which individuals actually perform the various activities necessary to comply with the provisions of Regulation CC, subpart B, including, for example, personnel engaged in
Distributing disclosure statements
Computer program development for deposit accounts (not necessarily a computer programmer)
Determining case-by-case holds or exceptions
Review the credit union’s training manual, internal audit or similar reports for Regulation CC, written procedures given to employees detailing their responsibilities under the regulation, and similar materials.
Determine the extent and adequacy of the instruction and training received by those employees to enable them to carry out their assigned responsibilities in conformance with Regulation CC.
Verify that the credit union provides each employee with a written statement regarding the credit union’s procedures that pertain to that employee’s function. (§ 19(f) (opens new window))
Review the credit union’s specific availability policy disclosures. Determine if the disclosures accurately reflect the credit union’s funds availability policies and meet the requirements for content under § 16 (opens new window).
Determine if the credit union provides the initial disclosure statement prior to accepting funds to open a new transaction account. (§ 17 (opens new window))
Determine if the credit union provides its funds availability policy upon an oral or written request within a reasonable time period. (§ 18(d) (opens new window))
Determine if the credit union has made changes to its availability policies since the last examination. If it has, determine whether depositors were notified in accordance with § 18(e) (opens new window), usually 30 days before implementing the change.
Review the credit union’s schedules or other materials relating to its funds availability time periods for the following types of deposits:
Cash (§ 10(a) (opens new window))
Electronic payments (§ 10(b) (opens new window))
S. Treasury checks (§§ 229.10(c)(1)(i) (opens new window) and 229.12(b)(2) (opens new window))
S. Postal Service money orders (§§ 229.10(c)(1)(ii) (opens new window), 229.10(c)(2) (opens new window), and 229.12(b)(3) (opens new window))
Checks drawn on Federal Reserve Banks and Federal Home Loan Banks (§§ 10(c)(1)(iii) (opens new window), 229.10(c)(2) (opens new window), 229.12(b)(4), and 229.12(c)(1)(ii) (opens new window))
State or local government checks (§§ 10(c)(1)(iv), 229.10(c)(2) (opens new window), 229.12(b)(4) (opens new window), and 229.12(c)(1)(ii))
Cashier’s, certified, and teller’s checks (§§ 10(c)(1)(v), 229.10(c)(2) (opens new window), 229.12(b)(4), and 229.12(c)(1)(ii))
On-us checks (§§ 10(c)(1)(vi) (opens new window) and 229.12(c)(1)(ii) (opens new window))
Local checks (§ 12(b)(1) (opens new window))
Determine that the credit union’s policy for providing funds availability is in accordance with regulatory requirements.
Determine the credit union’s procedures for placing holds.
Selectively sample each of the types of deposits listed in item 12 above and verify the funds availability time frames. Determine, for each deposit category, whether the credit union’s procedures provide funds availability within the required time periods. Determine that the procedures and disclosed policy are the same.
Deposits at Nonproprietary ATMs (§ 229.12(f) (opens new window))
(See also §§ 229.19(a)(4) and 229.19(a)(5)(ii) (opens new window) and comments 229.19(a) (opens new window)and 229.19(b) (opens new window) for off-premises ATMs.)
Determine that the credit union makes funds deposited in an account at a nonproprietary ATM by cash or check available for withdrawal not later than the fifth business day following the day of deposit.
Availability Rules—$100 and $400 (§§ 229.10(c)(1)(vii) (opens new window) and 229.12(d))
Determine the credit union’s procedures for complying with the $100 availability rule and, if applicable, the $400 cash withdrawal rule.
Review records that detail holds placed on accounts. Determine if holds are in accordance with the regulation.
Sample deposit accounts with deposits subject to the $100 availability rule and the $400 cash withdrawal rule and verify the credit union’s compliance with the rules. Verify that actual practices and policies match.
Determine if the credit union places holds on a case-by-case basis. If it does, review the credit union’s procedures for placing case-by-case holds.
Review the credit union’s specific availability policy disclosures to determine whether the case-by-case hold policy has been disclosed.
Review any physical records or reports generated from holds placed. (Sample should include records from the main office as well as branch offices, depending on the type of branch system operated.)
Sample a few of the case-by-case holds and determine whether the credit union makes the funds available for withdrawal within the required time frames.
Determine whether the credit union provides the customer with a notice of the case-by-case hold as required by § 16(c)(2) (opens new window). Determine if the notices meet the timing and content requirements.
If the credit union does not provide the notice at the time of deposit, determine whether it either discloses the availability of refunds of overdraft and returned-check fees or does not assess these fees when the requirements of § 16(c)(3) (opens new window) are met.
Exception Holds (§ 229.13 (opens new window))
Determine whether the credit union places holds on an exception basis. If it does, review its procedures for placing exception holds.
Review the credit union’s specific availability policy disclosures to determine whether it has disclosed its exception-holds policy.
Sample a few of the exception holds and determine when the credit union makes the funds available for withdrawal. Determine that the credit union does not add more than one business day for on-us checks and five business days for local checks (there are no more nonlocal checks) to the maximum time periods in the federal availability schedule for the deposit unless it can show that a longer delay is reasonable. (§ 13(h) (opens new window))
With the exception of new accounts, determine whether the credit union provides the customer with an exception-hold notice as required by § 13(g) (opens new window).
Review hold notices. Determine if the notices meet the timing and content requirements for each type of exception hold. (Note: Credit unions are required to retain copies of reasonable cause hold notices.)
New Accounts (§ 229.13(a) (opens new window))
Review credit union policies for new accounts.
Determine how the credit union defines a new account relationship. Determine if the credit union’s definition is in compliance with Regulation CC.
Review the credit union’s specific availability policy disclosure to determine whether the credit union has disclosed its availability policy regarding new accounts.
Review a new-account report or listing of new account holders. Determine if any holds were placed on the accounts.
Sample deposit accounts, and ask the credit union to provide documentation concerning the composition of the opening deposit or the most recent deposit.
Review holds placed and determine if they are within regulatory limits with respect to time and amount (see § 13(a)(1) (opens new window)). (Note: No regulatory time limits are set forth for funds availability for local check deposits into new accounts.)
Large Deposits (§ 229.13(b) (opens new window))
Determine whether the credit union has procedures and a special hold policy for large deposits. If it does, determine whether the credit union considers a large deposit, for purposes of the large-deposit exception, to be a day’s aggregate deposit of checks exceeding $5,000.
Determine that the credit union does not invoke the large-deposit exception for cash or electronic payments.
Review at least one account deposit on which a large-deposit hold was placed and ensure that the hold was placed only on the amount by which a day’s deposits of checks exceeded $5,000.
Determine if the credit union provided the customer with a written exception notice that meets the requirements of § 13(g)(1) or 229.13(g)(2) (opens new window).
Determine if the notice was provided within the time frames prescribed in § 13(g)(1) or 229.13(g)(2) (opens new window).
Redeposited Checks (§ 229.13(c) (opens new window))
Determine if the credit union has procedures and a special hold policy for redeposited checks.
If it does, determine if the credit union refrains from imposing this exception solely because of a missing endorsement or because the check was postdated.
Repeated Overdrafts (§ 229.13(d) (opens new window))
Determine whether the credit union has procedures or a special hold policy for customers with repeated overdrafts.
If it does, review the credit union’s definition of accounts ‘‘repeatedly overdrawn’’ and determine whether it meets the regulatory definition in § 13(d) (opens new window).
Determine that the credit union returns the account to the credit union’s normal account status when the account has not been repeatedly overdrawn for a six-month period following the time the account was characterized as repeatedly overdrawn.
Review the credit union’s list of customers whose accounts are repeatedly overdrawn.
(Note: This list may or may not be the same overdraft list maintained in the ordinary course of business. The credit union may maintain a list of recent overdrafts as well as a list of customers whose accounts are repeatedly overdrawn.)
Review an account classified as repeatedly overdrawn. Determine if the credit union properly classified the account and followed the regulatory procedures outlined in § 13(d) (opens new window).
Determine the date the account was placed in ‘‘repeated overdraft’’ exception status. Review account statements for the six months before the account was identified as an overdraft exception.
Determine whether the credit union provided the customer with an exception notice when an exception hold was placed on the account. If it did, review the content of the notice and determine if it meets the requirements of §§ 13(g)(1) or 229.13(g)(3) (opens new window).
Determine if notice was given within the required time frames. (§§ 12(g)(1) or 229.12(g)(3) (opens new window))
Reasonable Cause to Doubt Collectability (§ 229.13(e) (opens new window))
Determine if the credit union has procedures or a special policy for placing reasonable cause holds.
If it does, determine who initiates reasonable cause holds.
Obtain a list of accounts or checks to which this exception was applied. Review the exception notice given to the customer.
Determine if the reason for invoking the exception was reasonable.
Review the content of the notice and determine if it meets the requirements of § 13(g)(1) (opens new window).
Determine if notice was given within the required time frames. (§ 13(g)(1) (opens new window))
If the credit union imposes a reasonable-cause exception hold and does not provide the notice at the time of deposit, determine whether it either discloses the availability of refunds of overdraft and returned-check fees or does not assess these fees when the requirements of § 13(e)(2) (opens new window) are met.
Emergency Conditions (§ 229.13(f) (opens new window))
Determine if the credit union has procedures or a special policy for placing emergency condition holds. If it does, review the credit union’s procedures for placing these holds.
Determine whether the credit union invokes this exception only under the conditions specified in § 13(f) (opens new window).
Determine whether the credit union makes the funds available for withdrawal within a reasonable time after either the termination of the emergency or the time at which the deposit would normally be available for withdrawal, whichever is later. (Note: A reasonable period for on-us checks is one business day and for local checks, five business days. (§§ 13(h)(3) and 229.13(h)(4) (opens new window))
Special Deposit Slips (§ 229.10(c)(3) (opens new window))
Determine if the credit union requires a special deposit slip for state or local government, cashier’s, certified, or teller’s checks in order to provide next-business-day availability on the deposits. (§ 10(c)(3)(i) (opens new window))
If the credit union requires a special deposit slip, determine that it does one of the following: (§ 10(c)(3)(ii) (opens new window))
Provides the deposit slip to its customers
Informs its customers of how to obtain and prepare the slips
Makes the special deposit slips ‘‘reasonably available’’
Additional Disclosure Requirements (§ 229.18 (opens new window))
Determine if the credit union displays a notice of its availability policy in a conspicuous place at locations where employees receive consumer deposits. (§ 18(b) (opens new window)) (Note: The notice is not required at drive-up windows and night depositories. See comment 229.18(b) (opens new window).)
Determine if the credit union displays a notice at each of its proprietary ATMs stating that the funds deposited in the ATM may not be available for immediate withdrawal. (§ 18(c)(1) (opens new window)) If the credit union has off-premises ATMs from which funds are not collected more than twice a week, determine if the credit union discloses on or at the ATM the days on which the deposits made at the ATM will be considered ‘‘received.’’ (§ 229.18(c)(2) (opens new window))
Determine if the credit union includes a notice on all preprinted deposit slips that the deposited funds may not be available for immediate withdrawal. (§ 18(a) (opens new window))
Payment of Interest (§ 229.14 (opens new window))
Determine whether the credit union pays interest as of the date of the deposit or as of the date provisional credit is granted.
If the credit union pays interest as of the date provisional credit is granted, review the credit union’s schedule for provisional credit. (This schedule may be from a Federal Reserve Bank or may be based on the time credit is generally received from a correspondent bank.) Select a NOW account statement and ask the credit union to give a detailed explanation of how the interest was calculated.
Review the credit union’s method for calculating interest on deposits reviewed. Select another NOW account and, using the credit union’s procedures for calculating interest, verify that the credit union accrues interest as of the date provisional credit is received.
Calculated Availability—Non-consumer Transaction Accounts (§ 229.19(d) (opens new window))
Determine if the credit union uses a formula for calculating funds availability for non-consumer transaction accounts.
If it does, review a copy of the credit union’s formula.
Select a commercial account subject to the formula. Ask the credit union to demonstrate how funds are made available to the customer.
Record Retention (§§ 229.21(g) (opens new window) and 229.13(g)(5) (opens new window))
Determine that the credit union retains for two years records to show compliance with this section of the regulation. Also, the credit union should retain a copy of each notice provided when a ‘‘reasonable cause’’ exception is invoked, along with a brief description of the facts giving rise to the availability of that exception.
Note: Subpart C of Regulation CC, ”Collection of Checks,” has been omitted. It addresses payments system issues exclusively and therefore does not present any consumer-related regulatory compliance issues to be reviewed during a consumer compliance review
Whether a credit union will or will not function as a ”reconverting bank,” [1] the interlinked nature of the payments system virtually guarantees that every credit union will at some time receive a substitute check that is subject to the provisions of subpart D, the ‘‘Check 21’’ section of Regulation CC. All credit unions must be prepared to accept a substitute check in place of the original because the Check 21 Act provides that a properly prepared substitute check is the ”legal equivalent of the original check for all purposes.”.
One of a credit union’s regulatory compliance obligations is to apprise members who receive canceled checks with their periodic account statements or who otherwise occasionally receive substitute checks of their rights under the law through a consumer-awareness disclosure. A bank that provides a substitute check to a consumer must also be prepared to comply with the Check 21Act’s expedited recredit procedure for addressing errors relating to substitute checks. Even if the customer does not receive actual canceled checks in a monthly statement but instead receives a truncated summary, the individual may eventually receive a substitute check, either in response to a request for a check or a copy of a check or because a check that the consumer deposited was returned unpaid to the consumer in the form of a substitute check. Some increase in the potential for duplicate posting (substitute check and original) may also involve a degree of consumer education and explanation. The regulation specifies the appropriate timing for the distribution of the consumer-awareness disclosure and also provides model language. Finally, credit unions will likely want to train their personnel so that they can adequately convey to customers the impact of this instrument in the payments system.
Obtain copies of the documents associated with the credit union’s Check 21 compliance, including but not limited to the following:
Consumer-awareness disclosure(s)
Direct mail correspondence, statement stuffers, and the like, describing Check 21/substitute check implementation to consumer customers
Notices relating to expedited re-credit claims:
Identify the individuals within the credit union who may have responsibilities associated with Check 21. The following is a non-exhaustive list of such individuals:
New-accounts personnel
Internal auditors, reviewers
Deposit operations, bookkeeping
Determine the training methods used by the credit union in conveying specific responsibilities to employees. Are written procedures distributed to employees?
Consumer Awareness (§ 229.57 (opens new window))
Note: Model disclosure language is provided in Appendix C of the regulation.
Determine whether the credit union distributes only a single version of its consumer-awareness disclosure or maintains variations of the disclosure to be used depending on the circumstances giving rise to distribution. Each notice should reflect the following:
General disclosure content—Determine whether the disclosure notice states
That a substitute check is the legal equivalent of an original check and (§ 57(a)(1) (opens new window))
The consumer re-credit rights that apply when a consumer in good faith believes that a substitute check was not properly charged to his or her account. (§ 57(a)(2) (opens new window))
Timing and distribution—A bank is required to provide its consumer customers with a consumer awareness disclosure prior to the receipt of a substitute check.
For those who receive canceled checks with periodic statements:
Existing customers as of October 28, 2004 — Determine that the bank provided the disclosure no later than the first regularly scheduled communication with the consumer after October 28, 2004 (for each consumer who is a customer of the bank on that date). (§ 229.57(b)(1)(i) (opens new window))
New customers after October 28, 2004 — Determine that the bank provided the disclosure at the time the customer relationship was established. (§ 229.57(b)(1)(ii) (opens new window))
For those who do not receive canceled checks with periodic statements and who will receive substitute checks only occasionally:
Upon customer request for an original check or a copy of a check — Determine that the bank provides the disclosure to a consumer customer who requested an original check or a copy of a check and received a substitute check in response. (§ 229.57(b)(2)(i) (opens new window))
Upon customer’s receipt of a returned substitute check — Determine that the bank provides the disclosure to a consumer customer of the bank who receives a returned substitute check (at the time the bank provides such substitute check). (§ 229.57(b)(2)(ii) (opens new window))
Mode of delivery of information (§ 58 (opens new window)) — Determine whether the bank employed one of the following in delivering its consumer awareness disclosure(s) and expedited re-credit notice(s):
Any other means to which the recipient agreed to receive account information, including electronically
Expedited Re-credit for Consumers (§ 229.54 (opens new window))
Determine whether any credit union customer has raised a Check 21-related claim of loss since the last examination. If yes, review for the following. (At credit unions at which multiple Check 21-related claims have been raised and resolved, the examiner need only review a sampling sufficient to ensure that the bank’s processing is consistent and in compliance with subpart D.)
Necessary preconditions (consumer must allege all of these)—(§§ 54(a)(1)–229.54(a)(4) (opens new window))
Was the consumer’s account charged for a substitute check that was provided to the consumer? (The consumer need not be in possession of the substitute check at the time of claim submission.)
Was the consumer’s account not properly charged? (Alternatively, a consumer’s account could be properly charged yet still give rise to a warranty claim, for example, in the case of a substitute check image that is illegible.)
Did the consumer suffer a resulting financial loss?
Was the production of the original check or a sufficient copy necessary to determine whether or not the consumer’s claim was valid?
Procedural steps for consumer’s claim
Did the consumer submit a timely claim? (§ 229.54(b)(1) (opens new window))
Did the claim contain a description of the claim, a statement and estimate of loss, the reason why the original check or a sufficient copy is necessary, and sufficient information for the bank to investigate? (§ 229.54(b)(2) (opens new window))
If the consumer attempted to make a claim but failed to provide all of the necessary information (as listed above), did the bank inform the consumer that the claim was incomplete and identify the information that was missing? (§ 229.54(b)(2)(D)(ii) (opens new window))
Was the claim submitted in a form acceptable to the credit union? Did the bank compute the time for action accurately? (§ 229.54(b)(3) (opens new window))
Procedural steps for credit union response—If the credit union concluded that (1) all necessary prerequisites to the filing of a consumer claim existed and (2) the consumer followed the appropriate steps in filing the claim, verify that the bank provided the following appropriate response:
Claim deemed valid:
In the event of a valid consumer claim, did the bank re-credit the account for the amount of the loss, up to the amount of the substitute check (plus interest, if applicable), no later than the end of the business day after the banking day on which the bank made its determination, (§ 229.54(c)(1)(i) (opens new window))
Draft a notice of re-credit stating (1) the amount of the re-credit and (2) the date on which funds will be available for withdrawal, and (§§ 54(e)(1)(i) (opens new window) and 229.54(e)(1)(ii) (opens new window))
Send the notice no later than the business day after the banking day on which the bank re-credit occurred? (§ 229.54(e)(1))
Claim deemed invalid:
In the event of an invalid consumer claim, determine whether the bank sent a notice stating that the claim was invalid and included the original check or a sufficient copy, (§ 229.54(e)(2)(i) (opens new window))
Demonstrated to the consumer that the substitute check was properly charged (or that the consumer’s warranty claim was not valid), and (§ 54(e)(2)(ii) (opens new window))
Included the information or documents (in addition to the original check), if any, relied upon by the bank in making its determination (or a statement that the consumer may request such). (§ 54(e)(2)(iii) (opens new window))
Claim not resolved within initial ten days, pending further investigation:
If the bank could not resolve the claim before the end of the tenth business day after the banking day on which the bank received the claim, determine whether the bank
Re-credited the consumer’s account for the amount of the loss, up to the lesser of the amount of the substitute check or $2,500 (plus interest, if applicable), (§ 54(c)(3)(i)(A) (opens new window))
Drafted a notice of re-credit stating (1) the amount of the re-credit and (2) the date on which the funds would be available for withdrawal, (§§ 54(e)(1)(i) and 229.54(e)(1)(ii) (opens new window))
Re-credited the consumer’s account for the remaining amount of the loss, if any, up to the amount of the substitute check (plus interest, if applicable), no later than the end of the forty-fifth calendar day after the banking day on which the bank received the claim, and (§ 54(c)(3)(ii) (opens new window))
Sent the notice of re-credit no later than the business day after the banking day on which the bank re-credit occurred. (§ 54(e)(1) (opens new window))
Claim resulting in reversal of re-credit:
In some instances it may be necessary for a bank to reverse a re-credit made previously to a consumer’s account (plus any interest paid, if applicable). If such a circumstance has occurred, determine whether the bank
Concluded that the consumer’s claim was not valid and (§ 54(c)(4)(i) (opens new window))
Drafted a notice of reversal of re-credit (§ 54(e)(3) (opens new window)), accompanied by the following:
The original check or a sufficient copy, (§ 54(e)(2)(i) (opens new window))
Information or explanation to demonstrate to the consumer that the substitute check was properly charged (or that the consumer’s warranty claim was not valid), (§ 54(e)(2)(ii) (opens new window))
Information or documents (in addition to the original check or a sufficient copy), if any, on which the bank relied in making its determination (or a statement that the consumer can request such), (§ 54(e)(2)(iii) (opens new window))
A description of the amount of the reversal, including both the amount of the re-credit and the amount of interest paid on the re-credited amount, if any, being reversed, and (§ 54(e)(3)(i) (opens new window))
The date on which the bank made the reversal. (§ 54(e)(3)(ii) (opens new window))
Sent the notice no later than the business day after the banking day on which the bank made the reversal (§ 54(e)(3) (opens new window))
Availability of Re-credited Funds — Under circumstances detailed above, when the credit union determined that it was appropriate to re-credit its consumer customer’s account, determine whether the bank took the following actions:
Next Day Availability — Did the bank make any re-credited amount available for withdrawal no later than the start of the business day after the banking day on which the re-credit was provided? (§ 54(d)(1) (opens new window))
Safeguard Exceptions — If necessary for reasons of (1) new-account status, (2) overdrawn-account status, or (3) well-reasoned suspicion of fraud, did the bank invoke its right to delay immediate availability of re-credited funds? If so, was the delay invoked because the bank had not yet determined the validity of the claim? Were the funds made available no later than the business day after the banking day on which the final determination was made or the 45th calendar day after the bank received the claim, whichever occurred earlier? (§ 54(d)(2) (opens new window))
Overdraft Fees — If the bank chose to invoke its right to delay immediate availability of re-credited funds, did it refrain from imposing an overdraft fee until the appropriate five-day period had elapsed? (§ 229.54(d)(3) (opens new window))
EXPEDITED FUNDS AVAILABILITY ACT (REGULATION CC) CHECKLIST
1 Does the credit union consider every day except Saturday, Sunday, and federal holidays a “business day”? (§ 229.2(g)) (opens new window)
2 Does the credit union consider “banking days” those business days on which an office of the credit union is open for substantially all of its business? (§ 229.2(f)) (opens new window)
3 Does the credit union have a cutoff for receipt of deposits of 2:00 p.m. or later for credit union offices and 12:00 noon or later for ATMs? (§ 229.19(a)(5)(ii)) (opens new window)
4 Does the credit union comply with the following rules in determining when funds are considered to have been deposited?
4(a) Deposits over the counter or at ATMs (subject to D. below) are considered deposited when “received.” (§ 229.19(a)(1)) (opens new window)
4(b) U.S. Treasury checks (§ 229.10(c)(1)(i) (opens new window) and § 229.12(b)(2) (opens new window)) mail deposits are considered deposited when they are received by the mail room of the credit union. (§ 229.19(a)(2)) (opens new window)
4(c) Deposits in a night depository, lock box, or similar facility are considered received when the deposits are removed from the facility and are available for processing. (§ 229.19(a)(3)) (opens new window)
4(d) Deposits at an off-premises ATM (not within fifty feet of the credit union) that is not serviced more than twice a week are considered received as of the date the deposits are removed from the ATM by the credit union. (§ 229.19(a)(4)) (opens new window)
5 Does the credit union consider deposits made on a nonbanking day to have been received no later than the next banking day? (§ 229.19(a)(5)(i)) (opens new window)
6 When funds must be available on a given ”business day,” does the credit union make the funds available at the later of 9:00 a.m. or the time the credit union’s teller facilities (including ATMs) are available for account withdrawals? (§ 229.19(b)) (opens new window)
7 If the credit union limits cash withdrawals, does it make $400 available for cash withdrawals no later than 5:00 p.m. on the appropriate business day (second day for checks) following the day of deposit? (§ 229.12(d)) (opens new window)
8 Does the credit union make funds from the following types of deposits available for withdrawal no later than the first business day following the date of deposit:
8(a) Electronic payments (§ 229.10(b)) (opens new window)
8(b) Checks drawn on the U.S. Treasury and deposited to the payee’s account (§ 229.10(c)(1)(i)) (opens new window)
8(c) “On-us” checks (checks that are drawn on and deposited in branches of the same credit union in the same state or check-processing region) (§ 229.10(c)(1)(vi)) (opens new window)
9 Does the credit union make funds from the following deposits available no later than the first business day after the day of deposit if the deposit is made in person to a credit union employee, or no later than the second business day if the deposit is not made in person to a credit union employee?
9(a) Cash deposits (§ 229.10(a)(1) and § 229.10(a)(2)) (opens new window)
9(b) U.S. Postal Service money orders deposited in an account held by the payee of the check (§ 229.10(c)(1)(ii) and § 229.10(c)(2)) (opens new window)
9(c) Checks drawn on a Federal Reserve Bank or Federal Home Loan Ban deposited in an account held by the payee of the check (§ 229.10(c)(1)(iii) and § 229.10(c)(2)) (opens new window)
9(d) Checks drawn by a state or local governmental unit and deposited
9(d)(i) In an account held by the payee of the check? (§ 229.10(c)(1)(iv)(A) and § 229.10(c)(2)) (opens new window)
9(d)(ii) In a depositary credit union located in the same state as the governmental unit issuing the check, and (§ 229.10(c)(1)(iv)(B) and § 229.10(c)(2)) (opens new window)
9(d)(iii) Accompanied by a special deposit slip (if required by the credit union to make the funds available on the next business day). (§ 229.10(c)(1)(iv)(D) and § 229.10(c)(3)) (opens new window)
9(e) Cashier’s checks, certified checks, and teller’s checks (as defined in section 229.2) deposited in an account held by the payee of the check when the check is accompanied by a special deposit slip or envelope (if required by the credit union to make the funds available on the next business day) (§ 229.10(c)(1)(v)(C) and § 229.10(c)(3)) (opens new window)
10 If the credit union requires the special deposit slips, for the checks covered in checklist items 9(D) and 9(E), does it provide the slip to its customers or tell its customers how to prepare or obtain the slips? (§ 229.10(c)(3)(ii)) (opens new window)
10(a) Are the special deposit slips reasonably available? (§ 229.10(c)(3)(ii)) (opens new window)
11 Is the first $200 of a customer’s daily aggregate deposits of checks not subject to the next-day availability rules available on the next business day? (§ 229.10(c)(1)(vii)) (opens new window)
12 Is the $200 in addition to other deposited amounts that must be afforded next-day availability? (§ 229.10(c)(1)(vii)) (opens new window)
Checks and Certain Other Deposits
13 Are funds from checks generally available no later than the second business day after the day of deposit? (§ 229.12(b)(1)) (opens new window)
14 If a credit union extends by one business day the time period for which deposits subject to § 229.12(b), (c), or (f) (opens new window) are available for cash withdrawal, (§ 229.12(d)) (opens new window) N/A N/A N/A
14(a) Is $200 available on the next business day after the day of deposit for withdrawal in cash or by check?
14(b) Is an additional $400 available for cash withdrawal by 5:00 p.m. on the business day specified in § 229.12(b), (c), or (f) (opens new window)?
14(c) Are any remaining funds available for withdrawal the business day after the $400 was made available?
15 For Treasury checks and U.S. Postal Service money orders that do not meet the criteria for next-day availability, does the credit union make funds available no later than the second business day after the date of deposit? (§ 229.12(b)(2) and § 229.12(b) (3)) (opens new window)
16 Are funds deposited by cash or check at a nonproprietary ATM available no later than the fifth business day after the banking day of deposit? (§ 229.12(f)) (opens new window)?
17 Does the credit union disclose how a customer can distinguish between a proprietary and a nonproprietary ATM in its specific availability policy and disclosure?
18 Are funds from check deposits available on the second business day following the day of deposit)? (§ 229.16(b)(2)) (opens new window)
19 Are what were formerly known as local and nonlocal checks now treated the same (as there are no more nonlocal checks)?
20 Does the credit union’s specific availability policy disclosure indicate that case-by-case holds may be placed? (§ 229.16(c)(1)) (opens new window) If it does, does the disclosure do the following?
20(a) State that the credit union may extend the time period when deposited funds are available for withdrawal? (§ 229.16(c)(1)(i)) (opens new window)
20(b) State the latest time a deposit will be available for withdrawal, if the availability time frame is extended? (§ 229.16(c)(1)(i)) (opens new window)
20(c) State that the credit union will notify the customer if funds from a particular deposit will not be available for withdrawal until after the time period stated in the credit union’s funds availability policy? (§ 229.16(c)(1)(ii)) (opens new window)
20(d) Encourage customers to ask when particular deposits will be made available for withdrawal? (§ 229.16(c)(1)(iii)) (opens new window)
21 When case-by-case holds are placed, does the credit union provide the customer with a written notice of the hold? (§ 229.16(c)(2)) (opens new window)
22 Does the notice include the following?
22(a) The customer’s account number (§ 229.16(c)(2)(i)(A)) (opens new window)
22(b) The date and amount of the deposit (§ 229.16(c)(2)(i)(B)) (opens new window)
22(c) The amount of the deposit that is being delayed (§ 229.16(c)(2)(i)(C)) (opens new window)
22(d) The day the funds will be available for withdrawal (§ 229.16(c)(2)(i)(D)) (opens new window)
23 Does the credit union provide the notice at the time the deposit is made, if the deposit is made to an employee of the depositary credit union? (§ 229.16(c)(2)(ii)) (opens new window)
24 If the notice is not given at the time of deposit, does the depositary credit union mail or deliver the notice to the customer not later than the first business day after the day of the deposit? (§ 229.16(c)(2)(ii)) (opens new window)
25 If the credit union does not provide the notice at the time of deposit, does it refrain from charging the customer overdraft or return check fees if:
25(a) The overdraft or other fee would not have occurred if the deposited check had not been delayed; and
25(b) The deposited check was paid by the paying bank? (§ 229.16(c)(3)) (opens new window)
26 If the credit union does not provide the notice at the time of deposit and charges overdraft fees, does it notify the customer of the right to a refund of such fees and how to obtain the refund? (§ 229.16(c)(3)) (opens new window)
27 Does the credit union refund the fees if the conditions listed in checklist item 27 above are met and the customer requests a refund? (§ 229.16.(c)(3)) (opens new window)
28 When invoking an exception hold for accounts other than new accounts, does the credit union provide the customer with a written notice that includes the following?
28(a) The customer’s account number? (§ 229.13(g)(1)(i)(A)) (opens new window)
28(b) The date and amount of the deposit? (§ 229.13(g)(1)(i)(B)) (opens new window)
28(c) The amount of the deposit that is being delayed? (§ 229.13(g)(1)(i)(C)) (opens new window)
28(d) The reason the exception was invoked (§ 229.13(g)(1)(i)(D)) (opens new window)
28(e) The day the funds will be available for withdrawal (unless the emergency conditions exception is invoked and the credit union does not know when the funds will become available) (§ 229.13(g)(1)(i)(E)) (opens new window)
29 Does the credit union refrain from delaying funds availability beyond a reasonable time period? (Note: Five days for checks is considered reasonable.) (§ 229.13(h)(4)) (opens new window)
30 Does the credit union’s definition of a new account comply with the definition under § 229.13(a)(2)? (opens new window) (Note: If a customer has had another transaction account at the credit union within the 30 prior to opening an account, the customer does not qualify for the new-account exception.)
31 Do credit union disclosures accurately reflect the credit union’s practice for making deposited funds available for new accounts?
32 Do cash deposits in a new account made in person to a credit union employee become available for withdrawal on the first business day following the day of deposit? (§ 229.13(a)(1)(i) (opens new window) and § 229.10(a)(1)) (opens new window)
33 Are cash deposits in a new account not made in person to a credit union employee available for withdrawal on the second business day following the day of deposit? (§ 229.13(a)(1)(i) (opens new window) and § 229.10(a)(2)) (opens new window)
34 Are electronic transfers into new accounts available for withdrawal on the business day following the day the transfer is received? (§ 229.13(a)(1)(i) (opens new window) and § 229.10(b)) (opens new window)
35 Is the first $5,000 from any of the following types of check deposits available for withdrawal from a new account not later than the first business day after the day of the deposit, if the deposits meet the requirements of section? 229.10(c)? (§ 229.13(a)(1)(ii)) (opens new window) [For more information, see checklist section ‘Required Next-Day Availability.”]
35(a) Treasury checks (§ 229.10(c)(1)(i)) (opens new window)
35(b) U.S. Postal Service money orders (§ 229.10(c)(1)(ii)) (opens new window)
35(c) Federal Reserve and Federal Home Loan Bank checks (§ 229.10(c)(1)(iii)) (opens new window)
35(d) State or local government checks (§ 229.10(c)(1)(iv)) (opens new window)
35(e) Cashier’s, certified, and teller’s checks (§ 229.10(c)(1)(v)) (opens new window)
35(f) Traveler’s checks (§ 229.10(c)(1)(v) (opens new window) and comment 229.10(c) (opens new window)
36 Is the amount of any deposit of the types listed in checklist item 35 above exceeding $5,000 available for withdrawal no later than the ninth business day following the day of deposit? (§ 229.13(a)(1)(ii)) (opens new window)
37 If the credit union invokes the large-deposit rule, does it do so for only that portion of the aggregate check deposits that exceeds $5,000 on any one banking day? (§ 229.13(b)) (opens new window)
38 Does the credit union refrain from applying this exception to deposits made in cash, to deposits made by electronic payment, or to checks that must receive next-day availability under section 229.10(c)? (Comment 229.13(b).) (opens new window)
39 Does the credit union provide customers with a written notice of the longer delay? (§ 229.13(g)(1)) (opens new window) Is the notice (§ 229.13(g)(2)) (opens new window)
39(a) Provided at the time of the deposit, when the deposit is received in person by an employee of the credit union? Or
39(b) Mailed on or before the first business day after the day the credit union learns of the facts giving rise to the exception?
40 Does the credit union refrain from applying the redeposited exception to:
40(a) Checks that are returned because an endorsement is missing and are subsequently indorsed and redeposited; and, (§ 229.13(c)(1)) (opens new window)
40(b) Checks that were returned because they were postdated but are not postdated when redeposited? (§ 229.13(c)(2)) (opens new window)
41 Does the credit union consider the day the check was redeposited to be the day of deposit when determining when funds must be made available for withdrawal? (Commentary to section 229.13(c))
42 Does the credit union impose longer holds for depositors who have a history of overdrafts?
43 Does the credit union invoke the repeated-overdraft exception only when the account balance has been negative (or would have been negative had checks or other charges been paid):
43(a) Six or more times during the preceding six months (§ 229.13(d)(1)); (opens new window) or
43(b) Two or more times during the preceding six months, if the amount of any negative balance would have been $5,000 or more (§ 229.13(d)(2))? (opens new window)
44 Is this practice articulated in the credit union’s written policy and initial disclosure statement? (§ 229.16(a))
45 When the credit union imposes the longer delay, is the depositor notified of the reason, in writing, at the time of deposit? If not, is a notice mailed on or before the first business day after the day of the deposit or the day the credit union learns of the facts giving rise to the exception? (§ 229.13(g)) (opens new window)
46 Does the credit union return the account to the normal availability schedule when the account is no longer repeatedly overdrawn? (Note: Credit unions may use this exception for six months after the last overdraft that made the depositor eligible for the repeated-overdraft exception. See checklist item 43.) (§ 229.13(d)) (opens new window)
Reasonable Cause to Doubt Collectability (§ 229.13(e))
47 When the credit union invokes a reasonable-cause exception, does it provide the customer with a written notice of exception at the time the deposit is made, if the deposit is made in person to an employee of the credit union? (§ 229.13(g)(1)(ii)) (opens new window)
48 If the deposit is not made in person to an employee of the credit union, or if the hold is placed because of information learned subsequent to the receipt of the deposit, does the credit union mail the exception notice to the customer? (§ 229.13(g)(1)(ii)) (opens new window)
49 Does the credit union retain a copy of each reasonable-cause exception notice, along with a brief statement of the facts that led to the hold, for a period of two years? (§ 229.13(g)(5)) (opens new window)
50 Does the depositary credit union refrain from invoking the reasonable-cause exception on the basis of the race or national origin of the depositor or the class of the check? (§ 229.13(e)(1)) (opens new window)
51 Does the credit union refrain from assessing a fee for any subsequent overdraft, returned check, or other unpaid charge (or advise customers of their right to a refund of such fees, and refund the fees upon request) if all of the following conditions are met?
51(a) The depositary credit union extended the availability period on the basis of its belief that the check was uncollectible (§ 229.13(e)(1)) (opens new window)
51(b) The depositor was not provided with the written notice required by section 229.13(g)(1) at the time of deposit (§ 229.13(e)(2)) (opens new window)
51(c) The overdraft or return would not have occurred if the availability period had not been extended (§ 229.13(e)(2)(i)) (opens new window)
51(d) The deposited check was finally paid by the paying bank (§ 229.13(e)(2)(ii)) (opens new window)
52 Does the exception notice tell the customer where to direct a request for a refund of the overdraft fees? (§ 229.13(e)(2)) (opens new window)
53 Does the credit union invoke the emergency-conditions exception only in the following circumstances and when the credit union has exercised necessary diligence as circumstances require:
53(a) An interruption of communications or computer or other equipment (§ 229.13(f)(1)); (opens new window)
53(b) Suspension of payments by another bank (§ 229.13(f)(2)) (opens new window);
53(c) War (§ 229.13(f)(3)); (opens new window) or
53(d) An emergency condition beyond the control of the credit union? (§ 229.13(f)(4)) (opens new window)
54 Does the credit union make funds available for withdrawal no later than a reasonable period after the emergency has ended or within the time period established by the temporary and permanent schedules, whichever is later? (§ 229.13(h)(3)) (opens new window) (As stated in the Commentary to section 229.13(h)(4), a reasonable period is five business days for checks.)
55 Does the credit union provide customers with a written notice of the longer delay? (§ 229.13(g)(1)) (opens new window)
56 Is the notice provided at the time of the deposit, if the deposit is received in person by an employee of the credit union, or is the notice mailed on or before the first business day after the day the credit union learns of the facts giving rise to the exception? (§ 229.13(g)(1)(ii)) (opens new window)
Calculated Availability—Non-consumer Transaction Accounts (§ 229.19(d)) (opens new window)
Calculated Availability—Non-consumer Transaction Accounts (§ 229.19(d))
57 Does the credit union calculate funds availability for non-consumer accounts on the basis of a sample of the customer’s deposits? If it does, obtain a copy of the credit union’s formula for determining its availability schedule. Review a sample of checks similar to that used by the credit union to calculate funds availability and answer the following questions
57(a) Is the sample of checks large enough to accurately use the formula?
57(b) Does the formula accurately represent the average composition of the customer’s deposits?
57(c) Does the specified percentage of available funds appear reasonable? (Is a set percentage available the next business day, with remaining funds available according to the customer’s deposit mix?)
58 Based on the sample, are the terms of availability for the account equivalent to or more prompt than the terms outlined in the regulation?
59 Does the credit union display a notice of its availability policy in a conspicuous place at locations where employees receive consumer deposits? (§ 229.18(b)) (opens new window)
NOTE: Drive-up windows, night depositories, and locations where deposits are not taken do not require the notice. See Comment 229.18(b). (opens new window)
Calculated Availability—Non-consumer Transaction Accounts (§ 229.19(d)) continued
60 Does the credit union display a notice at each of its proprietary ATMs stating that the funds deposited in the ATM may not be available for immediate withdrawal? (§ 229.18(c)(1)) (opens new window)
61 If the credit union has off-premise ATMs from which funds are not collected more than twice a week, does the bank disclose, on or at the ATM, the days on which the deposits made at the ATM will be considered “received”? (§ 229.18(c)(2)) (opens new window)
62 Does the credit union include a notice on all preprinted deposit slips that the deposited funds may not be available for immediate withdrawal? (§ 229.18(a)) (opens new window)
Review a copy of the credit union’s availability schedule for check deposits credited through the Reserve Bank or its correspondent bank. Determine the time that the credit union receives credit for check deposits.
63 If the credit union has a policy of beginning the accrual of interest or dividends at date later than the business day on which it receives credit for the funds, does its specific policy disclosure contain an explanation of when interest or dividends on deposited funds begin to accrue? (§ 229.16(d)) (opens new window)
64 If the credit union does follow a policy described in checklist item 64 above, for each interest-bearing transaction account offered by the credit union (for example, NOW accounts and ATS accounts), does the credit union begin to accrue interest on the funds deposited no later than the business day on which the credit union receives credit for the funds? (§ 229.14) (opens new window)
Deposits at Non-continental U.S. Offices
NOTE: The credit union may extend the time periods set forth in §229.12 by one business day in the case of any deposit, other than a deposit discussed in §229.10 (next day availability), that is:
Deposited in an account at a branch of a depository credit union if the branch is located in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands; and
Deposited by a check drawn on or payable at or through a paying bank not located in the same state as the depository credit union.
65 For offices located in Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands does the credit union extend availability for check deposits drawn on banks in other states? (§ 229.12(e)) (opens new window)
65(a) If yes, is the extension limited to one day? (§ 229.12(e)) (opens new window)
65(b) Is the extension available only for deposits other than those discussed in § 229.10 (opens new window)?
65(c) Is the extension limited to such deposits only if the paying credit union is in a different jurisdiction? (§229.12(e)(2)) (opens new window)
66 If a credit union has received consideration for a substitute check (including a paper or electronic representation) that it transfers, presents, or returns: N/A N/A N/A
66(a) Does the substitute check accurately represent all of the information on the front and back of the original check as of the time the check was truncated? (§ 229.51(a)(1)) (opens new window)
66(b) Does the substitute check bear the legend, “This is a legal copy of your check. You can use it the same way you would use the original check”? (§ 229.51(a)(2)) (opens new window)
66(c) Will either the depositary bank, the drawee, the drawer, or the endorser be charged for or asked to make a payment on the check (because it was already paid)? (§ 229.52(a)(2)) (opens new window)
67 Does the credit union serve as a reconverting bank as defined in § 229.2(zz)? (opens new window) If so, do the substitute checks:
67(a) Bear all endorsements applied by parties that previously handled the check, in any form for forward collection or return; (§ 229.51(b)(1)) (opens new window)
67(b) Identify the reconverting bank in a manner that preserves any previous reconverting bank’s identifications, in accordance with ANS X9.100-140 and appendix D of § 229; and, (§ 229.51(b)(2)) (opens new window)
67(c) Identify the bank that truncated the original check, in accordance with ANS X9.100-140 and appendix D of 12 CFR 229? (§ 229.51(b)(3)) (opens new window)
68 Has the credit union had any re-credit claims under § 229.54 (opens new window)? If so:
68(a) Did the credit union receive the claim by the end of the 40th calendar day after the delivery of the periodic statement (§ 229.54(b)(1)(i)(A)) (opens new window) or when the substitute check giving rise to the claim was delivered? (§ 229.54(b)(1)(i)(B)) (opens new window)
68(b) Does the credit union extend the timing requirements for submission of a claim in extenuating circumstances and for an additional reasonable amount of time? (§ 229.54(b)(1)(ii)) (opens new window)
68(c) If the credit union requires the claim to be in writing and the attempt for submission was oral, does the credit union inform the customer of the written requirement and provide an additional 10 days for submission of a claim? (§ 229.54(b)(1)(iii)) (opens new window) and (§ 229.54(b)(3)(ii)) (opens new window)
69 Does the credit union’s policy permit additional time, beyond the regulatory required minimums, for submission of claims?
70 Did the claim contain a description of the claim, a statement and estimate of loss, the reason why the original check or a sufficient copy is necessary, and sufficient information for the bank to investigate? (§ 229.54(b)(2)(i)) (opens new window)
70(a) If the claim did not contain the required information, did the credit union inform the consumer that the claim was not complete and identify what information was missing? (§229.54(b)(2)(ii)) (opens new window)
71 If a claim is received in a timely manner and the bank determines the claim to be valid: N/A N/A N/A
71(a) Did the credit union re-credit the consumer’s account up to the substitute check amount, plus interest if the account is an interest-bearing account, no later than the end of the business day after receiving determination? (§ 229.54(c)(1)(i)) (opens new window)
71(b) Did the credit union send to the consumer a notice as required by § 229.54(e)(1) (opens new window) no later than the business day following the banking day on which the bank re-credits the account? (§229.54(c)(1)(ii)) (opens new window)
72 Does the notice describe: N/A N/A N/A
72(a) The amount of the re-credit? (§229.54(e)(1)(i)) (opens new window)
72(b) The date on which the re-credited funds will be available for withdrawal? (§229.54(e)(1)(ii)) (opens new window)
73 If the credit union determines the claim by the consumer to be invalid, does the credit union send a notice as required by § 229.54(e)(2) (opens new window) no later than the business day following the banking day on which the credit union makes its determination? (§ 229.54 (c)(2)) (opens new window) Does the notice:
73(a) Include the original check or a sufficient copy, except as provided in § 229.58 (opens new window); (§ 229.54(e)(2)(i)) (opens new window)
73(b) Demonstrate to the consumer that the substitute check was properly charged or the consumer’s warranty claim is not valid; (§ 229.54(e)(2)(ii)) (opens new window)
73(c) Include the information or documents (in addition to the original check or sufficient copy), if any, on which the credit union relied in making its determination or a statement that the consumer may request copies of such information or documents? (§ 229.54(e)(2)(iii)) (opens new window)
74 If the credit union has not taken any action as required by paragraph (c)(1) or (c)(2), before the end of the 10th business day after receiving a claim, did the credit union: N/A N/A N/A
74(a) Re-credit the consumer’s account for the amount of loss up to $2,500, plus interest if the account is interest bearing? (§ 229.54(c)(3)(i)(A)) (opens new window)
74(b) Send the consumer a notice that describes: N/A N/A N/A
74(b)(i) The amount of the re-credit and
74(b)(ii) The date on which the re-credited funds will be available for withdrawal? (§ 229.54(e)(1)) and (§ 229.54(c)(3)(i)(B)) (opens new window)
75 If at the end of the 45th calendar day after the banking day on which the bank received the claim and sent to the consumer the notice the credit union has still not determined if the claim is valid or invalid, did the credit union: (§ 229.54(c)(3)(ii)) (opens new window) N/A N/A N/A
75(a) Re-credit the consumer’s account for the remaining amount of the consumer’s loss, if any, up to the amount of the substitute check, plus interest if the account is an interest-bearing account?
75(b) Send a notice that described: N/A N/A N/A
75(b)(1) The amount of the re-credit and
75(b)(2) The date on which the re-credited funds will be available for withdrawal? (§ 229.54(e)(1)) and (§ 229.54(c)(3)(ii)) (opens new window)
76 If the credit union reverses a re-credit because it later determined the claim to be invalid, did the credit union: (§ 229.54(c)(4)(i)) (opens new window) N/A N/A N/A
76(a) Notify the consumer no later than the business day after the banking day on which the bank made the reversal? (§ 229.54(e)(3)) (§ 229.54(c)(4)(ii)) (opens new window) Did the notice:
76(a)(1) Include the original check or a sufficient copy, except as provided in 12 CFR 229.58? (§ 229.54(e)(2)(i)) (opens new window)
76(a)(2) Demonstrate to the consumer that the substitute check was properly charged or that the consumer’s warranty claim is not valid? (§ 229.54(e)(2)(ii)) (opens new window)
76(a)(3) Include the information or documents (in addition to the original check or sufficient copy), if any, on which the credit union relied in making its determination or a statement that the consumer may request copies of such information or documents? (§ 229.54(e)(2)(iii)) (opens new window)
76(a)(4) Include the amount of the reversal, including both the amount of the re-credit (including the interest component, if any) and the amount of interest paid on the re-credited amount, if any, being reversed? (§229.54(e)(3)(i)) (opens new window)
76(a)(5) Include the date on which the bank made the reversal? (§ 229.54(e)(3)(ii)) (opens new window)
77 Does the credit union make any amount that it re-credits to a consumer account available for withdrawal no later than the start of the business day after the banking day on which the bank provides the re-credit? (§ 229.54(d)(1)) (opens new window) If not,
77(a) Did the credit union invoke its right to delay immediate availability of re-credited funds because of (1) new account status, (2) overdrawn account status, or (3) well-reasoned suspicion of fraud? (§ 229.54(d)(2)) (opens new window)
77(b) Were the funds made available no later than the business day after the banking day on which the final determination was made OR the 45th calendar day after the credit union received the claim, whichever occurred first? (§ 229.54(d)(2)) (opens new window)
78 If the credit union invoked its right to delay immediate availability of re-credited funds, did it refrain from imposing an overdraft fee the until the fifth calendar day after the calendar day on which the bank sent the notice of re-credit? (§229.54(d)(3)) (opens new window)
79 Did the credit union disclose to its members who receive paid checks with their statements the notice required no later than the first regularly scheduled communication after October 28, 2004? (§ 229.57 (b)(1)(i)) (opens new window)
80 Does the credit union provide the required disclosure at the time a customer relationship is established after October 28, 2004? (§229.57(b)(1)(ii)) (opens new window)
81 Does the notice describe: N/A N/A N/A
81(a) That a substitute check is the legal equivalent of an original check; and, (§ 229.57(a)(1)) (opens new window)
81(b) The consumer’s re-credit rights that apply when a consumer in good faith believes that a substitute check was not properly charged to his or her account? (§ 229.57(a)(2)) (opens new window)
Note: Model For C-5A Substitute Check Policy Disclosure provides a safe harbor for the content requirements provided that the bank’s policies and procedures are consistent with the disclosure.
Substitute Checks continued
82 Does the credit union provide notice to at least one customer on jointly held accounts? (§ 229.57(b)(3)) (opens new window)
83 Does the credit union provide the disclosure to a customer who requested an original check or a copy of a check and received a substitute check in response? (§ 229.57(b)(2)(i)) (opens new window) If so,
83(a) Does the credit union provide this disclosure at the time of the consumer’s request, if feasible; or
83(b) Does the credit union provide this disclosure no later than the time at which the credit union provides a substitute check in response to the consumer’s request?
84 Does the credit union provide the disclosure to a customer who receives a returned substitute check (at the time the credit union provides such substitute check)? (§ 229.57(b)(2)(ii)) (opens new window)
85 Does the credit union provide the required disclosures or, as necessary, an original check or a sufficient copy by U.S. mail or by other means the recipient has agreed to? (§ 229.58) (opens new window)
[1] A reconverting bank is the bank that creates a substitute check; if a nonbank creates a substitute check, the reconverting bank is the first bank to transfer, present, or return the substitute check (or the first paper or electronic representation of that substitute check) for consideration.