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Question & Answer

Question: Our bank is using next day availability for all our deposit customers. However, we have had some losses. Most of the losses are on accounts that have been open more than 30 days but are still relatively new. Can we have different availability policies based on the length of time the account has been open?

Answer: Yes. You do not have to have the same funds availability policy on all accounts, although, for operational purposes, a uniform policy may be the easiest policy to administer. The Expedited Funds Act places limits on the length of time you may hold deposited funds. Certain exceptions are provided. For example, in the case of a new account (open less than 30 days by a new depositor) the allowed holds are generous. However, the EFA does not require that the bank maintain the same funds availability policy for all customers or for all types of accounts. Therefore, you may have a policy such as permitting next day availability on established accounts - for example, accounts that have been open at least six months or one year - while applying the maximum holds allowed by Regulation CC to accounts that are not yet that mature.

There is one anti-discrimination item you should consider before setting any such policy. The 1866 Civil Rights Act provides that all persons have the same rights to make and enter into contracts. A deposit agreement is a contract. Therefore, you should make certain that your availability policies are based on measurable criteria that are not in any way based on the race of the depositor.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 3, 1/96

First published on 01/01/1996

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Filed under compliance as: 

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