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#1091751 - 12/04/08 04:32 PM Funds availability policy
AuditorK Offline
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PA
Is this posted funds availability policy wording specific enough?

"Our general policy is to make funds from your cash deposits available immediately. Funds from the deposit of non-cash items (for example, checks), will be available on the same day that we receive credit. Funds from electronic direct deposits will be availabe on the day we receive the deposit. In some cases, we may delay your availability to withdraw funds. Then, the funds generally will be available by the fifth business day after the day of deposit."

I think the customer is going to be saying "How do I know when the bank receives credit for a deposited item?" I guess we can just refer them to the full funds availability disclosure for a more detailed availability schedule.

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#1091793 - 12/04/08 05:03 PM Re: Funds availability policy AuditorK
BrendaC Offline
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Sweet Home AL
A few thoughts...

Are cash deposits really available "immediately" or on the same business day? If you have a daily cut-off (2:00 pm for example) and I made a deposit at 3:00 pm, will my inclearing items be paid tonight based on my cash deposit?

Regarding when the bank receives credit. Do you really follow this practice? Most banks either use same business day (bad idea), next business day or follow 2/5 day schedule (local/nonlocal). It is common to pay interest based on when the back receives credit, but not actually base availability on that schedule.
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#1091798 - 12/04/08 05:09 PM Re: Funds availability policy BrendaC
John Burnett Offline
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John Burnett
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Cape Cod
I agree with your concern about the wording relating availability to the day the bank receives credit, both because customers won't have any way to know when that date is, and because there's nothing in the regulation that allows you to use that date as your trigger for availability. Remember that there are some next day availability items in those deposits (cashier's checks, for example) that you may not receive next day credit for.
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#1091807 - 12/04/08 05:13 PM Re: Funds availability policy BrendaC
AuditorK Offline
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PA
Maybe cash deposits should more accurately be disclosed as available on same business day.

From what I'm told we'll be making all check deposits (except on-us checks) available next day, unless we invoke a case-by-case or exception hold. I agree that we want to disclose paying interest based on when we receive credit (Reg DD) but our consultant also feels we can disclose funds availability the same way. I disagree.

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#1091898 - 12/04/08 06:32 PM Re: Funds availability policy AuditorK
rlcarey Offline
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rlcarey
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Galveston, TX
Your consultant is wrong. You cannot mix the two regulations. Tell them to review Model C-18 in Regulation CC.
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#1091959 - 12/04/08 07:10 PM Re: Funds availability policy rlcarey
AuditorK Offline
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Posts: 962
PA
Okay, one more question.

Prior to changing our funds availability policy, can we send customers a notice that contains the simplified wording in C-18 (on a marketing brochure that includes some other changes, such as fees) or do we need to send the full disclosure similar to C-3?

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#1091981 - 12/04/08 07:17 PM Re: Funds availability policy rlcarey
BrendaC Offline
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Sweet Home AL
AuditorK - I recommend that you review your system parameters to understand how your processing system is supposed to be working and then test the various deposit scenarios to validate. I would include a check deposit with cash back as one of these scenarios and test interest accruals as well. Then you will be in a position to accurately compose your availability notice and confirm the accuracy of your interest accrual disclosure on your TISAs.
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#1091986 - 12/04/08 07:22 PM Re: Funds availability policy BrendaC
BrendaC Offline
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BrendaC
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Sweet Home AL
Content of a notice of change to your funds availability policy will depend on exactly what was incorrect in the initial policy statement provided to your customers.
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#1091996 - 12/04/08 07:30 PM Re: Funds availability policy BrendaC
rlcarey Offline
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Galveston, TX
Model C-18 is only what is posted where you accept deposits. BrendaC is correct about the necesity of reviewing your initial disclosures to see what you said there.
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#1092018 - 12/04/08 07:45 PM Re: Funds availability policy rlcarey
AuditorK Offline
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PA
I agree that I need to sit down with operations and management and find out how things work now and how they want them to work.

We previously disclosed immediate availability for all deposits - unless we used a case-by-case or exception hold.

Management wants to go to a next day availability for all checks except on-us checks. Cash, on-us, and electronic deposits will be availabe same day. Again we will use case-by-case and exception holds as needed.

I'm thinking we should be sending new full funds availability disclosures.

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#1103994 - 12/30/08 09:31 PM Re: Funds availability policy AuditorK
LynnH Offline
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LynnH
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NH
We just went from same day to next day availability last month and we did send out the full disclosures along with a letter summing up what they change was and why and also included a list of questions and answers.

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