Model form C-2 doesn't include any reference to local/nonlocal checks or routing numbers. You should be able to use it without tweaking it at all, except to insert "five" in the "(number)" spot in the last paragraph.

Question - deposits made at a non-proprietary ATM can still have a 5 day hold, correct?

These changes would not affect 229.12 (f) - unless I'm missing something?

This most likely affects the CU's since banks typically do not participate in cooperative ATMs.

There's nothing in the elimination of "nonlocal" checks that would change the application of 229.12(f). Of course, the Fed could amend other parts of the regulation, and nothing is sacrosanct, but I don't see any reason that provision would be changed.

Thank you Sir.

Ok, I realize that this is a stupid question; however, I have not been in the compliance arena for a couple of years and am very new to deposit regs and have just gotten promoted to Compliance Officer. I am reviewing our Reg CC disclosures and want to make sure I understand the new time frames that need to be disclosed with the check processing region changes.

Our disclosure is modeled after C3, so if I understand correctly, we need to change "fifth business day" to "second business day" and under the new account rules we must make everything available by the 9th business day after deposit, correct? Also, this would trigger us to give our customers notification within 30 days of implementation, correct?

Thanks so much for helping a newbie!

Correction to my last post, under new account rules, we have to make everything available by the 7th business day, is that right?

The New Account hold is not affected by the consolidation. Under New Account Exception Hold, you first swap out "on-us" checks for Traveler's Checks for "Next Day" items. You can hold Next Day item amount above $5,000 for 9 days (giving Next Day availability for the first $5,000.)

Everything else you can hold for as long as you want. Most banks have simply gone with 7 or 11 days for New Accounts to avoid having all sorts of Availability Schedules lying all over the place. Set a time period that you feel comfortable for both risk management and customer service.

It's the non-New Account holds (Regular Availability, Case by Case and all other Exception holds) that you will only have the local schedule (2-Day or 7-Day) to use.

You had it correct the first time. There is nothing changing under the new account exception hold at 229.13(a).

I guess I'm questioning why we have to change anything right now. Until there is no longer checks that would be considered non-local checks; our disclosures are still correct. We may still have deposits made from the Atlanta processing district that are non local and subject to our standard hold policy.

Am I missing something here? We haven't made disclosure to our customers regarding quicker availability and weren't going to until there is only one check processing region left.

We would not have to give any notice prior to or after the 12/12 changes would we...just the final consolidation and when everything is all local?

We would not have to give any notice prior to or after the 12/12 changes would we...just the final consolidation and when everything is all local right?

I apologize. I meant Model Form C-5. That is what we currently utilize and want to do away with non-local holds.

I question the wisdom of sticking with C-5 unless you think you'll benefit from being able to hold a deposit until the second, rather than the first, business day following the banking day of deposit. Does that one day buy you anything? Think about dropping local check holds and going instead with next day availability plus exception holds (C-2). Atlanta will be gone within three months, so why not avoid doing this in two steps?

John - I have a quick question for clarification. We are a small bank and our Reg CC policy resembles C-3. The only change we made fell under the heading "Longer Delays May Apply" where I changed 11 days to 7 days. I sent out a brief notice to all deposit customers. "Our general policy us to allow you to withdraw funds deposited in your account on the first business day after the day we receive your deposit. Funds from electronic direct deposits will be available on the day we receive the deposit. In some cases, we may delay your ability to withdraw funds beyond the first business day. Then, the funds will generally be available by the second business day after the day of deposit." Can you tell me if I should send out the full policy to the "Longer Delays May Apply" section? Thank you so much.

If you changed your policy to reflect that 7 days will be the limit on exception holds instead of 11, that's something you technically should inform current customers of. It is a change in policy in favor of customers, so you have 30 days from implementation to get the word out.

I have a question as to how this affects our float days we have setup. Since everything will now be local, would we only be allowed to have a float day of 1?

Float is my concern also - considering we haven't changed a thing for years. I'm looking for guidance in that area. FYI fed announced Atlanta last week http://www.federalreserve.gov/newsevents/press/bcreg/20091231a.htm

Float is solely generated based on when you provisionally collect on your transit items from the Fed or correspondent to whom you forward them. If you haven't updated your transit/float tables and also pay interest only on collected funds, you most likely have a Reg. DD violation and could be setting yourself up for a breach of contract class action lawsuit.

As rlcarey indicates, your ability to delay interest accrual is not affected by consolidation of the check processing regions. It is based on the clearing arrangements actually used by your bank and intertwines Regulations CC and DD.

Although it is not provided for in Regulation DD, I have seen regulators order banks to pay restitution when they delayed interest accrual based on unsupported 2 and 5 day time frames for local and nonlocal checks. The practice could also be easily labeled as "unfair and deceptive."

Just to clarify, when Atlanta merges with Cleveland there will be no more non local checks. That being said, our current disclosures model C-4 (same day, next day, 2 day, 5 day, exceptions). Is it OK:

1. To remove the 5 day reference and keep same day, next day, and 2 days?

2. For the longer delays may apply section to change the reference 7 days?

3. For special rules on new accounts to continue disclosing certain deposit(cash, wires, first $5000 of cashiers, certified checks, travelers checks, state and fededal checks first business day after deposit, over $5000 ninth business day after deposit, not in person under $5000 will be available second business day after deposit, and funds from all other deposits on the 10th business day after deposit?

We use model C-2 (next day availability and exception holds. It currently states that if we invoke the exception hold we could delay the availability for five days. Based on what I am reading, does this 5 day change to 2 day?

lvc,

Model form C-4 is for a delayed availability bank. Assuming your bank wishes to retain that classification, I may not understand some of your questions.

This language referencing next day availability items that do not meet conditions for next day availability:

If you do not make your deposit in person to one of our employees (for example, if you mail the deposit), funds from these deposits will be available on the second business day after the day we receive your deposit.

would remain unchanged.

This language, referring to exception holds:

We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the (number) business day after the day of your deposit.

could contain a (number) no higher than "seventh."

The model language for the new account exception hold does not reference local vs. nonlocal checks; it is unaffected by consolidation of the check processing regions.

Becky,

C-2 does not contain the word "fifth." In reference to exception holds it allows the bank to insert its own (number). Currently, that number could be as high as "eleventh." When there are no more nonlocal checks it could be no higher than "seventh."

Thank you for the clarification.

My remaining question is do the items that meet the condition of next day availability remain the same or can we invoke the 2 day hold?

There is no effect on the items that meet next day availability requirements. However, note that if the requirements are not met; e.g. a Treasury check is not deposited to the account of the payee, a cashiers check is not deposited in person, etc. the item may be treated as a second day availability item. That is not a change.