If we decide to implement a 3 day hold on all RDC deposits for new clients (for 30 days from the date they enroll) does that impact my hold schedule for Reg CC and disclosures? I was thinking that as long as our RDC contract clearly states the provision we would be ok and no other changes to our existing hold policy or disclosure requirements would apply.

Thoughts?

Okay so starting with the definition of consumer from the regualtion and the assumption that your RDC is only for non-consumer accounts:

Both consumer and nonconsumer accounts are subject to the requirements of this regulation, including the requirement that funds be made available according to specific schedules and that the bank make specified disclosures of its availability policies. Section 229.18(b) (notices at branch locations) and §229.18(e) (notice of changes in policy) apply only to consumer accounts. Section 229.13(g)(2) (one-time exception notice) and §229.19(d) (use of calculated availability) apply only to nonconsumer accounts.

That says to me, the most you can extend a hold on an RDC deposit is limited to either the exception notice rules or the availability rules.... so a blanket 3 day hold would not work without envoking one of the exceptions... however... you can get your large deposit exception notice and or your redeposit exception notice covered up front in the agreement if you meet the specifications below from the Reg:


(2) One-time exception notice. In lieu of providing notice pursuant to paragraph (g)(1) of this section, a depositary bank that extends the time when the funds deposited in a nonconsumer account will be available for withdrawal based on an exception contained in paragraph (b) or (c) of this section may provide a single notice to the customer that includes the following information—

(i) The reason(s) the exception may be invoked; and

(ii) The time period within which deposits subject to the exception generally will be available for withdrawal.

This one-time notice shall be provided only if each type of exception cited in the notice will be invoked for most check deposits in the account to which the exception could apply. This notice shall be provided at or prior to the time notice must be provided under paragraph (g)(1)(ii) of this section.

PARAGRAPH B AND C:

(b) Large deposits. Sections 229.10(c) and 229.12 do not apply to the aggregate amount of deposits by one or more checks to the extent that the aggregate amount is in excess of $5,000 on any one banking. day. For customers that have multiple accounts at a depositary bank, the bank may apply this exception to the aggregate deposits to all accounts held by the customer, even if the customer is not the sole holder of the accounts and not all of the holders of the accounts are the same.

(c) Redeposited checks. Sections 229.10(c) and 229.12 do not apply to a check that has been returned unpaid and redeposited by the customer or the depositary bank. This exception does not apply—


Other than that, you can use your contract to change your availability schedule in general (if you are same day for consumers, you can contractually change RDC customers to next day on RDC deposits), which I would make clear in your contract.

So, I don't believe you can do a blanket 3 day hold. I do believe you can change to a next day availability policy. If you do hold it would have to be on an exception basis, you can disclose in your contract the exceptions for Large deposits and re-dposits only, which would cover your disclosure requirements. All other exceptions would have to be disclosed at the time you made the decision to hold.

I do just want to add that if you do plan to hold beyond standard availability, I would ask why... part of the reason customers like RDC is that they can make their money earn interest faster... If you do your due diligence before hand and really know your customers before they enroll you can reduce the risk of check fraud, etc... without using holds... we changed availability to next day availaibilty, but still try to provide same day when possible.

Hope that helps.

Cheers!

...except that RDC is not covered by Reg CC so there is no need to adjust your Reg CC disclosure based on your RDC contract.

Finally, someone else that agrees that RDC is not covered by Reg CC! Can you provide more insight Brian, I had a disagreement with another compliance person on this very topic for mobile RDC since the customer is depositing an image of the check and not an actual paper check as it is defined in reg cc.

Here's a couple of other threads on the topic.

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