What are the key points that should be changed in our Reg. CC policy with recent changes? Thanks

Depends what your current policy states. Some are going to need to be revised, others will not have to be touched, just depends on your policies already in place.

The changes, of course, reflect the transfer of check processing operations from Dallas (10/17) and Los Angeles (11/14) to Cleveland. That leaves Philadelphia and Atlanta operations to be consolidated into Cleveland by early next year. As of 11/14, a check drawn on a bank in Buffalo, NY will be a local check when deposited in a bank in Honolulu!

We just updated our annotations to Appendix A to Regulation CC to reflect the Fed's notice.

If you are a delayed availability institution your initial disclosure lists transit & routing numbers. It's a common, but unofficial, belief that you need to update your disclosure as the number of checks accorded "local" status lengthens toward infinity and send amended copies to existing customers.

That practice gets increasingly ridiculous as it becomes apparent that "all roads lead to Cleveland." I suggest that you don't bother with the updates, just revise your disclosure to excise references to nonlocal checks. They are an endangered species.

Gee, I hope no one comes up with the idea that all banks need to amend their dislcosures to delete the mention of any hold of more than 7 days under the "exceptions" section of their disclosure. Oops!

That's exactly what I just did.

But keep in mind there hasn't been any mention about New Account Holds (that I could find). So other than the limits placed on next day items, it still reads you can hold other types of checks for up to 11 days!

We decided to scale this back as well.

Ok, so if I basically use C5 sample policy , then I should update the list but report non-locals and I will be ok from a disclosure standpoint? What about the need to notify customers after 30 days of a change? Can you do this simply with a statment message to "See a personal banker for an updated list of non-local numbers"

Here's what I believe ComplyWithMe did: simply skipped the steps of updating an ever lengthening disclosure for delayed availability banks and looked down the road to what comes next.

Everything red is to be deleted. Everything blue is to be added.

C-5--Holds to Statutory Limits on All Deposits

Your Ability To Withdraw Funds

Our policy is to delay the availability of funds from your cash and check deposits. During the delay, you may not withdraw the funds in cash and we will not use the funds to pay checks that you have written.

Determining the Availability of a Deposit

The length of the delay is counted in business days from the day of your deposit. Every day is a business day except Saturdays, Sundays, and federal holidays. If you make a deposit before (time of day) on a business day that we are open, we will consider that day to be the day of your deposit. However, if you make a deposit after (time of day) or on a day we are not open, we will consider that the deposit was made on the next business day we are open.
The length of the delay varies depending on the type of deposit and is explained below.

Same-Day Availability

Funds from electronic direct deposits to your account will be available on the day we receive the deposit.

Next-Day Availability

Funds from the following deposits are available on the first business day after the day of your deposit:
U.S. Treasury checks that are payable to you.
Wire transfers.
Checks drawn on (bank name) [unless (any limitations related to branches in different states or check processing regions)].
If you make the deposit in person to one of our employees, funds from the following deposits are also available on the first business day after the day of your deposit:
Cash.
State and local government checks that are payable to you [if you use a special deposit slip available from (where deposit slip may be obtained)].
Cashier's, certified, and teller's checks that are payable to you [if you use a special deposit slip available from (where deposit slip may be obtained)].
Federal Reserve Bank checks, Federal Home Loan Bank checks, and postal money orders, if these items are payable to you.
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.

Other Check Deposits

The delay for other check deposits depends on whether the check is a local or a nonlocal check. To see whether a check is a local or a nonlocal check, look at the routing number on the check:


If the first four digits of the routing number (1234 in the examples above) are (list of local numbers), then the check is a local check. Otherwise, the check is a nonlocal check. Some checks are marked "payable through" and have a four-or nine-digit number nearby. For these checks, use the four-digit number (or the first four digits of the nine-digit number), not the routing number on the bottom of the check, to determine if these checks are local or nonlocal. Our policy is to make funds from local and nonlocal checks available as follows.

1. Local checks. The first $100 from a deposit of other local checks will be available on the first business day after the day of your deposit. The remaining funds will be available on the second business day after the day of your deposit.
For example, if you deposit an other a local check of $700 on a Monday, $100 of the deposit is available on Tuesday. The remaining $600 is available on Wednesday.
2. Nonlocal checks. The first $100 from a deposit of nonlocal checks will be available on the first business day after the day of your deposit. The remaining funds will be available on the fifth business day after the day of your deposit.

For example, if you deposit a $700 nonlocal check on a Monday, $100 of the deposit is available on Tuesday. The remaining $600 is available on Monday of the following week.

Longer Delays May Apply

Funds you deposit by check may be delayed for a longer period under the following circumstances:
We believe a check you deposit will not be paid.
You deposit checks totaling more than $5,000 on any one day.
You redeposit a check that has been returned unpaid.
You have overdrawn your account repeatedly in the last six months.
There is an emergency, such as failure of computer or communications equipment.
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 seventh(number) business day after the day of your deposit. If you deposit both categories of checks, $100 from the checks will be available on the first business day after the day of your deposit, not $100 from each category of check.
Special Rules for New Accounts

If you are a new customer, the following special rules will apply during the first 30 days your account is open.
Funds from electronic direct deposits to your account will be available on the day we receive the deposit. Funds from deposits of cash, wire transfers, and the first $5,000 of a day's total deposits of cashier's, certified, teller's, traveler's, and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you (and you may have to use a special deposit slip). The excess over $5,000 will be available on the ninth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000 will not be available until the second business day after the day of your deposit.
Funds from all other check deposits will be available on the (number) business day after the day of your deposit.

I have not spent enough time thinking about how to do this for anyone to rely on the above. This is only to illustrate the point that if there are no more non local checks delayed availability banks will not have to include the graphic and list transit & routing numbers.

If you are required to send your customers a notice, then it must reflect the changes, not just indicate where they would go to find out what is different. Reg CC is not as detailed as Reg DD on how to go about that; e.g. can you simply provide a new disclosure or must you point out what is different in the new disclosure vs. the old? As the change shortens the disclosure, a description of what is missing would be pretty obtuse.

I know that Philadelphia is going to Cleveland on December 11th. Does anyone know when Atlanta is moving?

I have not heard a specific date. As John says above "by early next year" and I have been told by March 31, 2010.

Anyone else considering doing away with non-local holds for the next 5 months just for training simplicity? With everything else on the compliance menu, it's very tempting to me.

R,
This has been an evolutionary rather than revolutionary process and I think it has just started to dawn on banks as the obvious choice; i.e. let's make the switch and get it over with rather than attempt to "time" it at that last minute.

Your Reg CC training will be much less complex, but you will probably focus a lot more on exception holds.

John, with the date so inconspicuous for the Philadelphia and Atlanta conversions, but all indicates that Philly will go first, just how long of a notice do we need to give our members? Will the normal 30 days do? So if we currently clear through Philly, I guess we should start planning for a Jan/Feb conversion and we should start planning our disclosures and training now, eh?

Like I have no other Compliance deadlines looming?!?!?!?!?!?

Ok, I'm not trying to be dense, but maybe my brain is too full from all the changes. If we have a next-day availability policy that provides for a case-by-case delay I think I only need to change the sections that refer to "5" days to "2" days and my safeguard exceptions to "7" days. But I still have to notify all customers within 30 days of the change, even if it's to their benefit? Can anyone tell me if I've got this correct?

That is the conservative interpretation; yes. If enough was at stake, the argument exists that the bank is not changing its policy, the government is eliminating one of its definitions. It's not worth the debate, just do it.

I suggest you focus on getting your initial disclosure changed as of a date certain without waiting for the last two CPRs outside Cleveland to be consolidated with the mistake on the lake.

If you feel obligated to notify existing customers you may do it within 30 days after make the change and the verbiage you need will fit easily into a statement message.

You do not need to send a new disclosure to existing customers.

Ok, so now I'm confused. If the Fed is changing all non-local checks to 2 days, and we give same day credit currently of up to $200.00, but have 5, 7, and 11 day holds, we have to do away with all of the 5,7, and 11 days holds EXCEPT for any exception processing, RIGHT? My brain is fried.

Thanks for any and all help on this. I need to get it right.

Only non-local check times will go away:

5 day case-by-case
11 day exception hold

All other holds will remain.

Ok, I understand and you guys are great. But I only have a couple more questions.

Our DP system currenty determines the hold based on the ABA number when we enter it ("23" local - 2 days, all other non-local - 5 days). We can change the hold time based on a table within the system. So if I am understanding this correctly, all ABA's will start with the Cleveland district (the 3 (for Phila) will change) going forward after the FINAL conversion. So will ALL physical checks routing numbers have to be changed? Will we need to advise our members to get new checks?

Also can we really change our funds availability and policy before the final conversion without any issues even though we clear through Philadelphia currently? Up till now we haven't changed anything because nothing had changed for Philly and its processing. I'm concerned because if we change now, its not actually happening until early next year and is quite alot we need to do to get this done if we have to do all of the above, and then some by January.

I'm

We have decided to go ahead and treat all checks as local right now. We use Deposit Pro for disclosures and account opening documents. In Deposit Pro there was one place that would not allow me to change fifth day to second day. The sentence says "Depending on the type of check that you deposit, funds may not be available until the fifth business day after the day of your deposit". I called Deposit Pro's customer service. They said that was built in to the disclosure becasue of the reg and I couldn't change it. They were not aware that the Federal Reserve had announced plans to combine check processing sites. Until Deposit Pro can get the straightened out will I be wrong to leave that sentence as "fifth" day?

As long as there are at least two check processing regions, a 5 day case by case hold remains theoretically possible. Your language should still work through the first few months of next year.

I'm certain that someone at DP knows, just not the person you spoke with.

No. Routing numbers for individual banks will not change. For example, the current list of "local" checks for Cleveland includes several different prefixes; i.e. several different Federal Reserve Districts and several now defunct check processing regions. It is simply that those prefixes have lost their Reg CC significance; i.e. they are all "local" in relation to each other.



Yes. All you are doing is giving up the ability to treat checks drawn on banks in the Atlanta and Cleveland CPRs as nonlocal, something you will be doing some time early next year no matter what.

The philosophy is sort of along the lines of "If you are going to eat a frog, don't nibble."

So, 229.12(e) - one additional business day for Hawaii & Alaska. Is that still valid in the "all local" checks?

And if I understand the thread, we still have all the exception holds and new account holds.

No change to 229.12(e). Even though a Maine bank's check will be local for you on the Island, you can hold availability to the third business day even after Cleveland takes over everything.

Yes, you still can place exception holds, to be released by the 7th business day (or later if you can document that a longer delay is reasonable under the specific circumstances). There's no change in the works to new account holds.

Philadelphia is being consolidated December 11, 2009.

We decided to make the switch to next-day availability. But I was wondering if anyone can tell me what their teller (signs at thier windows)disclosures read.

The model form for the lobby notice (it is not required to be at every teller window regardless of what your forms vendor says) is C-18:

C-18--Notice at locations where employees accept consumer deposits
(case-by-case holds)

FUNDS AVAILABILITY POLICY

Our general policy is to allow you to withdraw funds deposited in your account on the (number) 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 (number) business day. Then, the funds will generally be available by the fifth business day after the day of deposit.



The highlighted words would reflect your policy; e.g. next, next, second for a next day availability bank.