Regulation CC March 2, 2005
What is Regulation CC? • The federal regulations that defines check types and the maximum hold period allowable for each type of check. • It also provides rules on exceptions to schedules, disclosures of funds availability, and payment of interest. • You will apply this regulation when placing holds on check transactions; therefore, you must identify the types of holds for which the regulation applies and their corresponding maximum hold period.
Maximum Hold Periods • Next Day Availability • Local Holds • Non-Local Holds • Exception Holds
Next Day Availability • Credit unions must make funds from certain types of deposits available on a next-day basis. • These deposits generally pose a low risk of being returned and thus are required to be available to the member sooner than other types of deposits. Deposits subject to next-day availability include: • Cash • Electronic Payments • Bank or Cashier’s Checks • U.S. Treasury Checks • On-Us Checks • State and Local Government Checks payable to the member • Traveler’s Cheques • Money Orders
Local Holds • A check is considered a “local check” based on whether it is deposited in a credit union located in the same check-processing region as the paying institution. • Deposits made by local checks must be available for withdrawal under the permanent schedule by the second business day after deposit. • The $100 next-day availability rule applies to local checks.
Non-Local Holds • A non-local check is a check drawn on a credit union located in the same federal reserve check processing region as the depositary credit union. • Deposits made with non-local checks must be available for withdrawal not later than the fifthbusiness day following the day of deposit.
Exceptions to Availability Schedules • Some checks may not be returned to the depositary credit union by the time funds must be made available for withdrawal. To reduce the risk we can extend the time within which the funds are required to be available. • A credit union may protect itself with respect to deposits made to new accounts. These exceptions apply to the schedules for local and non-local checks and ATM deposits. • The credit union is required to mail or provide in person a notice identifying the reason for the exception hold.
Length of Hold • A credit union invoking an exception may extend the local (2nd business day) and non-local (5th business day) schedules by a “reasonable period of time”. • We can extend local holds 5 more business days (total hold of 7 days) • We can extend non-local holds 6 more business days (total hold of 11 days)