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ATM Cut Off Time
by Andy Zavoina, John Burnett and Mary Beth Guard, BOL Gurus
Question: We are currently reviewing our disclosures for ARTA Deposit. We normally balance our ATMs between the hours of 11:00 am and 2:00 pm. Under Reg CC is there anything that states that an ATM cutoff time cannot be before 12:00 noon? When we fill in 11:00 am on the disclosure a warning comes up telling us to check regulations for correct times. I can't find acceptable ATM balancing times anywhere. Any information you can help me with would be great.
Answer by Andy Zavoina:
BIO AND CONTACT INFO
229.19 OSC 6.a. states, "For receipt of deposits at ATMs, contractual branches, or other off-premise facilities, such as night depositories or lock boxes, the depositary bank may establish a cutoff hour of 12:00 noon or later...." So the time requirement is one thing.
Disclosure of the cutoff time is another. In that same cite, further into the paragraph it states, "The choice of cutoff hour must be reflected in the bank’s internal procedures, and the bank must inform its customers of the cutoff hour upon request." Upon request doesn't mean it has to be in your disclosure.
You may also want to verify any state laws restricting the time or disclosure of ATM deposits.
Answer by John Burnett:
BIO AND CONTACT INFO
With many ATM systems, the time a bank balances the ATM may be totally independent of the "cutoff" time. Reg. CC requires that any deposit I make at your on-premise ATM be considered accepted on the same date I made it if before the cutoff time, which may not be before noon.
If your bank balances the machines in the morning, but anything the depositor does before, say, 6 p.m., is reflected in that day's activity on the depositor's account, your cutoff time is 6 p.m., and balancing has nothing to do with it (some machines that don't accept deposits might not get settled daily).
But if the machine accepts deposits and they are not posted until removed from the machine and verified, you'll need to make sure deposits are removed AFTER twelve on each business day.
Answer by Mary Beth Guard:
BIO AND CONTACT INFO
It would be a problem under Reg CC to set a cutoff time for deposits at ATMs that is prior to 12:00 noon.
Reg CC says, in Section 229.19:
(a) When funds are considered deposited. For the purposes of this subpart--
(1) Funds deposited at a staffed facility, ATM, or contractual branch are considered deposited when they are received at the staffed facility, ATM, or contractual branch;
(2) Funds mailed to the depositary bank are considered deposited on the day they are received by the depositary bank;
(3) Funds deposited to a night depository, lock box, or similar facility are considered deposited on the day on which the deposit is removed from such facility and is available for processing by the depositary bank;
(4) Funds deposited at an ATM that is not on, or within 50 feet of, the premises of the depositary bank are considered deposited on the day the funds are removed from the ATM, if funds normally are removed from the ATM not more than two times each week; and
(5) Funds may be considered deposited on the next banking day, in the case of funds that are deposited--
(i) On a day that is not a banking day for the depositary bank; or
(ii) After a cutoff hour set by the depositary bank for the receipt of deposits of 2:00 p.m. or later, or, for the receipt of deposits at ATMs, contractual branches, or off-premise facilities, of 12:00 noon or later.
Your ARTA software was correctly attempting to steer you away from a violation!
First published on BankersOnline.com 8/18/03
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