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#1272913 - 10/23/09 06:36 PM
Reg CC Changes
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Platinum Poster
Joined: Jun 2001
Posts: 848
Texas
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Based on the fact that by early next year, there will no longer be any checks that are considered nonlocal, is anyone making changes to that effect now? It just seems that it not worth the hassle of trying to keep staff aware of the changing routing numbers.
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VMACK CRCM
“The wise know their limitations; the foolish do not.†Benjamin Hoff, The Tao of Pooh
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#1272917 - 10/23/09 06:38 PM
Re: Reg CC Changes
VMack
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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We treat all holds as local items now, which does make it much easier. However, we don't really put on a lot of them.
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#1272925 - 10/23/09 06:43 PM
Re: Reg CC Changes
Skittles
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Platinum Poster
Joined: Jun 2001
Posts: 848
Texas
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So far this month we have placed 105 holds and of those, 75 are non-local checks. It looks like these checks are either insurance or credit card checks. I would like to go ahead and make the change, but fear we may not be protected as much as possible on some of those.
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VMACK CRCM
“The wise know their limitations; the foolish do not.†Benjamin Hoff, The Tao of Pooh
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#1273905 - 10/26/09 07:14 PM
Re: Reg CC Changes
Neytiri
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Platinum Poster
Joined: Jun 2001
Posts: 848
Texas
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Good point. Yes, I realize that and did not mean to make it sound like our hold policy includes a class of checks. My bank is over 2 billion. The more I think about it, the more inclined I am to go ahead and treat all hold items as local items. It would make life for everyone simpler!
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VMACK CRCM
“The wise know their limitations; the foolish do not.†Benjamin Hoff, The Tao of Pooh
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#1274499 - 10/27/09 12:20 PM
Re: Reg CC Changes
VMack
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Member
Joined: Jun 2006
Posts: 80
Michigan
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That is what we will be doing as well.
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#1274564 - 10/27/09 01:01 PM
Re: Reg CC Changes
VMack
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Mack, I'm impressed that you have any statistical information regarding your hold practices. Most banks do not.
Within a few years of Reg CC's advent, there was a large bank in Arizona that actually analyzed their losses from deposited items relative to the holds they placed.
What they found is that they were putting holds on the wrong items; i.e. almost all of the items they held were paid on first presentment. Almost all of their losses came from items on which no hold was placed because there was nothing to suggest a hold was appropriate.
Who's to say what that type of analysis would yield today in a particular bank. Maybe the whole exercise is a simple waste of time?
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#1274899 - 10/27/09 03:45 PM
Re: Reg CC Changes
Kathleen O. Blanchard
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If your policy and practice is that you generally provide next day availability and place case-by-case and/or exception holds, your policy doesn't change, and you MAY have no notification requirement (see my post below).
If your disclosed policy is to hold check deposits for different numbers of days based on local/non-local status, with or without adding exception holds, you should have previously been providing depositors a disclosure telling them how to know what a local check is. In that case, this change to consider all check local (before you have to) is a change in policy that technically requires a notice no later than 30 days after implementation.
Last edited by John Burnett; 10/28/09 02:21 PM. Reason: to add "MAY"
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1275065 - 10/27/09 05:12 PM
Re: Reg CC Changes
manimal
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Apparently, your initial disclosure also talks about exception holds and says you may hold funds up to the eleventh day following the banking day of deposit. That will be incorrect sometime (presumably before March 31) next year. I understand that you intend to revise it accordingly.
Based on an abundance of caution, I would put out a statement message to the effect that the maximum hold period on deposited items is to the seventh day. Please understand, I do not think the notice is required by regulation either. It's just that it's a simple fix and I don't want to hear about it from the examiner who simply can't find anything else and carries this "violation" around from bank to bank for the next several months.
You may or may not revise the hold period you recite under the new account exception. The local vs. nonlocal distinction had no effect there unless you messed with the model language.
P.S. Never, take advice from a forms vendor.
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#1275702 - 10/28/09 01:17 PM
Re: Reg CC Changes
Elwood P. Dowd
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Diamond Poster
Joined: Feb 2008
Posts: 2,207
Deleted
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That is correct, our current disclosure says that we generally give next-day availability, with up to a five-day hold for case-by-case and eleven-day holds for safeguard exceptions. These will be revised to two-day holds for case-by-case and seven-day holds for safeguard exceptions. Our vendor is still telling us we have to give notice to our customers because any change to our funds availability policy, even one that expedites the availability of funds, needs to be disclosed (like MSKaybee suggested above with 229.18).
You may have a point with just using an abundance of caution and giving notice to our customers. Thank you for your insight!
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#1275809 - 10/28/09 02:19 PM
Re: Reg CC Changes
manimal
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Well, there is an argument that if your disclosures provide for holds of 5 days or 11 days, you have a notice need. Take a look at model forms C2 and C3 in Appendix C of the regulation and see if your disclosures read like them. If your disclosure says you might hold funds as long as 11 days, you'll need to change them and notify existing customers.
Also check out your lobby, new accounts desk or teller line Funds Availability Policy notice to see if it needs changing.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1276196 - 10/28/09 06:01 PM
Re: Reg CC Changes
Irishguy
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Gold Star
Joined: Mar 2006
Posts: 336
Bank
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If we put a message at the bottom of all our statements saying "the maximum hold time is 7 business days on any check" would this satisfy the requirement to notify customers?
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#1278358 - 11/02/09 04:52 PM
Re: Reg CC Changes
mstark
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100 Club
Joined: Jan 2008
Posts: 242
Minnesota
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bump - I was wondering that too...
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#1278364 - 11/02/09 04:58 PM
Re: Reg CC Changes
Funky Falcon
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Such a notice might be adequate depending on what you have disclosed relative to holds in the past. For example, do you mention "5th business day" anywhere in your disclosure to describe a holds you place routinely or on a case-by-case basis?
Don't forget to review your summary disclosure posted in your lobby or in your teller area.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1279263 - 11/03/09 05:34 PM
Re: Reg CC Changes
John Burnett
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Gold Star
Joined: Feb 2008
Posts: 290
Mayhem
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John, we are a small bank with one branch. We mail ALL statements on the first of the month. We wanted to put the notice on the November statements but we missed the deadline for mailing. Can we include the notice on our December 1st statements with an effective date of October 16th?
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#1279773 - 11/03/09 09:37 PM
Re: Reg CC Changes
Elwood P. Dowd
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Platinum Poster
Joined: Apr 2007
Posts: 953
Tejas
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P.S. Never, take advice from a forms vendor. THANK YOU! Finally someone else understands that WKFS is not a source for regulatory compliance. They are a sales force trying to sell us pre-printed, unnecessary disclosures. I am so sick of their emails giving advice about what I should send to my customers. Unfortunately, they have done an effective job of making many bankers believe their word is gospel. For what it's worth, I have asked our executives to begin treating all checks as local. We are in 8 states now, so our definiation of "local" has been changing rapidly anyway. Much easier to get ahead of this curve (something I've been preaching since 2007). We'll see
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#1279778 - 11/03/09 09:39 PM
Re: Reg CC Changes
AllSmiles
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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John, we are a small bank with one branch. We mail ALL statements on the first of the month. We wanted to put the notice on the November statements but we missed the deadline for mailing. Can we include the notice on our December 1st statements with an effective date of October 16th? 1. It is a low risk violation, at worst, and some would argue it's not even required. 2. Better late than never.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1284173 - 11/10/09 03:19 PM
Re: Reg CC Changes
AllSmiles
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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We currently treat "State or Local Government Checks – ONLY when located in our local processing region," as "Next Day Items". Since everything will be in our "Local Processing Region" as everything will become local, does this option go away?
Any thoughts or research available on this? Anyone else have similar practice?
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#1284179 - 11/10/09 03:28 PM
Re: Reg CC Changes
DD Regs
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Here's how the reg describes these "next day availability" items:
(iv) A check drawn by a state or a unit of general local government and deposited-- (A) In an account held by a payee of the check; (B) In a depositary bank located in the state that issued the check, or the same state as the unit of general local government that issued the check; [abridged]
The reference is to the state, not the check processing region. Depending on the circumstance, your practice may have been more or less liberal than the regulation requires. You're going to need to do some retraining, but I do not see how consolidation of the check processing regions affects this language.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1284199 - 11/10/09 03:44 PM
Re: Reg CC Changes
DD Regs
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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Reading my question and thinking more about it, I think it would be appropriate to say a local Gov't check would be a check drawn in a state that we operate, instead of relying on the routing number.
Anyone else interpret local govt checks that way?
(Thanks Ken, you were typing your response as i was thinking on my post)
Last edited by DD Regs; 11/10/09 03:46 PM.
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