Check Handling, Reg. CC: Sending Notices of Recent Change in Next Day Funds Availability

Question 

What is the effective date for the increase from $100 to $200 in the amount we must make available on the next business day when a check is deposited?  Do we have to give notice of this change since it actually benefits the customer? If we have to give notice, do we have to give this notice 30 days prior to the effective date?  May we include the disclosure of the change in next day availability from $100 to $200 in a periodic statement or must it be in a separate mailing?  (We are a case-by-case bank and we take advantage of the exceptions for placing holds on checks.  We use the model language found in Appendix C, Model C-3, of Reg. CC.) 

Answer 

Section 1086 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amends the EFA Act by increasing from $100 to $200 the amount of deposited funds that banks must make available for withdrawal by opening of business on the next day. The effective date of this provision of the act is the ‘‘designated transfer date,’’ which the Secretary of the Treasury has determined to be July 21, 2011. This provision of the EFA Act is implemented in § 229.10(c)(1)(vii). Additionally, the model disclosure forms set forth in current appendix C reflect the requirement that a bank must make $100 of the deposit available on the next business day. When the Dodd-Frank Act’s increase to $200 becomes effective, banks should ensure that their disclosures reflect the new funds availability schedule and that customers are notified of the changes in policy in accordance with § 229.18(e).

Specifically, effective July 21, 2011, a bank basing its funds-availability disclosure on current model C–3, C–4, or C–5 must ensure that its disclosure indicates that the first $200 (rather than $100) of a check deposit will be available on the next business day after
the day of deposit.
 
Per § 229.18(e), a bank must provide a change-in-terms notice to existing consumer customers by August 21, 2011.
 
(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank\'s availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.
 
Appendix E to Part 229 of the Commentary to Reg CC makes it clear that you may send the disclosure as an insert with the period statement.

E. §229.18(e)  Changes in Policy

1. This paragraph requires banks to send notices to their customers when the banks change their availability policies with regard to consumer accounts. A notice may be given in any form as long as it is clear and conspicuous. If the bank gives notice of a change by sending the customer a complete new availability disclosure, the bank must direct the customer to the changed terms in the disclosure by use of a letter or insert, or by highlighting the changed terms in the disclosure.

2. Generally, a bank must send a notice at least 30 calendar days before implementing any change in its availability policy. If the change results in faster availability of deposits—for example, if the bank changes its availability for nonlocal checks from the fifth business day after deposit to the fourth business day after deposit—the bank need not send advance notice. The bank must, however, send notice of the change no later than 30 calendar days after the change is implemented. A bank is not required to give a notice when there is a change in Appendix B (reduction of schedules for certain nonlocal checks).

3. A bank that has provided its customers with a list of ATMs under §229.16(b)(5) shall provide its customers with an updated list of ATMs once a year if there are changes in the list of ATMs previously disclosed to the customers.