Changes To Reg CC: Questions & Answers

As promised in the last newsletter, here are a few of the questions that have been asked about Reg CC. Some of these came from a Reg CC Update Session we put on for bankers in New Jersey in late August in a session sponsored by the Savings League. Phil Farley, Manager of Regulatory Assistance, Philadelphia Federal Reserve Bank joined me in explaining the latest changes and answering questions.

Do I have to print and distribute all new disclosures?

If you are changing your availability schedule, and it is less favorable to your customer than the schedule you are now operating under, you must provide new disclosures to all existing and new transaction account (NOW and checking) customers. It is not necessary to send disclosures to savings customers, as savings accounts are not affected.

If the change in the number of days you put on exceptions was stated as "four days" in your disclosure, and you now want to take advantage of the permitted additional days on local and non-local deposits, you will have to reprint. But if your disclosure, in the case of exception holds, reads "may not be available until the seventh day for local or the eleventh day for non-local", you are still OK.

If your availability schedule for local and non-local checks does not change because it already meets or exceeds the permanent schedule requirements, Fed says any minor changes (such as the same day availability on EFT's) can wait until you have exhausted your present stock. The changes should then be made when you order reprints.

Is there any harm in providing better availability than I print in my disclosure?
One of the reasons Congress put the requirement for disclosures in the Expedited Funds law was so that consumers could "shop" institutions and compare services on a standard scale. For that reason, you must disclose what your availability schedule is for most of your transaction accounts. You may provide better availability than you have disclosed on a case by case basis. But your disclosure must reveal what your actual availability schedule usually is. Editors Note: This is of great concern to security officers, as they feel (correctly) that it increases vulnerability to kiting.

Do we have to put non-proprietary ATM deposit availability in our disclosure?
There is no requirement to include any information about ATMs in your disclosure-either your own or non-proprietary.

Can we refuse non-proprietary ATM deposits?
Yes. Reg CC has no regulatory control over your ability to accept or refuse deposits into an ATM. It does mandate that if you do accept deposits, they must adhere to the availability schedule. In your own ATM, the deposit is to be treated "as if it came over your teller's window." In a non-proprietary ATM, because of operational limitations, all deposits will have to be available no later than the second day (including government checks meeting next day availability requirements).

Will there be more changes to Regulation CC?
It is sincerely hoped that Congress will pass some amendments that will make life a little easier for financial institutions and a little tougher for criminals. But nobody is making any promises about how soon that will happen!

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 9, 9/90