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#2229078 - 01/15/20 04:43 PM Reg. CC - New amount of $5,525 on Large Deposits
TeamComply Offline
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As you are all aware, effective 7-1-2020, amounts change within Reg. CC. So on a large deposit hold (of a non-next day item), we currently follow the following: $200 next business day, next $4,800 2nd business day, and remainder on 7th business day.

On or after 7-1-2020, this large deposit hold (on a non-next day item) will look like: $225 next business day, next $5,300 2nd business day, and remainder on 7th business day. Is this correct???

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#2229081 - 01/15/20 04:55 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
Adam Witmer Online
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Yes, this is correct. In your example, you are utilizing both a case-by-case hold and a large deposit special exception hold. The new large deposit amount is $5,525, so by having $225 next day and $5,300 available on the second day, you can then hold the amount beyond the $5,525 for seventh day availability.

For further clarification for those reading this, here is a quick excerpt from my training manual on this:

"Maximizing Holds With Both Case-by-Case & Large Deposit Holds
If the changes in thresholds weren’t complex enough by themselves, things start to get even more complicated if a financial institution wants to maximize their ability to delay funds by applying both a case-by-case hold as well as a large deposit exception hold. For example, if a customer deposited a local (non-next day) check in the amount of $100,000, a financial institution could place both a case-by-case hold as well as a special exception hold on the deposit. The way this worked under the old amounts was that if $100,000 was deposited, $200 must be made available on the next business day, $4,800 on the second business day, and $95,000 on the seventh business day.

As you can see from this example, the numbers rounded fairly nicely which helped to ensure compliance with the hold requirements. Under the inflation adjustments, however, the numbers don’t round as easily and this starts to get fairly complicated.

For example, the new rules will alter our above example of a deposited local check for $100,000. The way the new rule will work is that $225 must be made available on the second business day, $5,300 on the second business day, and the remaining $94,475 must be available on the seventh business day."

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All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2229138 - 01/15/20 09:23 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
David Dickinson Offline
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Central City, NE
Adam: I agree with what you are trying to say, but I think you have an error in the wording. Your last paragraph states:"

For example, the new rules will alter our above example of a deposited local check for $100,000. The way the new rule will work is that $225 must be made available on the second business day, $5,300 on the second business day, and the remaining $94,475 must be available on the seventh business day."

I think you mean $225 must be made available on the NEXT business day (not 2nd business day).
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#2229171 - 01/16/20 12:54 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
Adam Witmer Online
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Absolutely. I should have copied/pasted that. wink
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#2230556 - 02/07/20 08:38 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
Sheldon Hendrix Offline
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Sheldon Hendrix
Joined: Jun 2006
Posts: 1,156
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Regulation CC states the following regarding notification to affected customers of changes to funds availability policies.

12 CFR §229.18(e)
(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank's availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.

My take on this is that the upcoming changes will be an increase in the amounts of next day credit; therefore, it would expediting funds availability. Would this mean we can send out notification using the 30 day after implementation option? Has anyone else sorted through this?
Last edited by Compliance Rules; 02/07/20 08:39 PM.
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#2230560 - 02/07/20 08:45 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
BrianC Online
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BrianC
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Illinois
Quote
Would this mean we can send out notification using the 30 day after implementation option? Has anyone else sorted through this?


Yep. If your policy change is on July 1st, then you can send your notice sometime during July. The notification can be a statement message if you want to save some postage. Also don't forget that if you disclose the $200 next day availability for case-by-case holds your notice will also have to reference the increase to $225.
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#2230569 - 02/07/20 09:05 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
Sheldon Hendrix Offline
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Got it. Thanks Brian!

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#2230662 - 02/10/20 07:36 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
GrannieTwo Offline
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Posts: 180
Central IL
Even though this is a benefit to the customer, we still have to send a notice, correct? We were going to put a message on our statement about changes coming contact the bank for more information just because we are so limited on how much we can put on the statement. We will need to get new signs, change our disclosures but I'm getting push back that we don't need to send out for example a statement stuffer explaining the change. Mgmt feels that if we train the staff on the change, along with the glib on the bottom of the statements, that's enough. I just want to know which is right to mail or not to mail, that is the question! Sorry, couldn't resist!
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#2230668 - 02/10/20 08:00 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
Adam Witmer Online
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That is correct. Regulation CC requires a notice to the customer any time you change your policy. The only difference is whether you must send the notice in advance (if it has a negative effect on the customer) or after the fact (if it benefits the customer).

As far as the statement message, a general statement to "contact the bank for more information" isn't going to be enough as Reg CC says the notice must be clear and conspicuous - meaning you need to clearly tell them what is changing. If your statement message can't handle everything you need to include, a small statement stuffer would work. Alternatively, you could send a full new notice with the changes highlighted for the customer.

Also, there are quite a few steps that need taken to ensure compliance with the new Reg CC changes, so if you are looking for guidance on what you need to do, here is a 10-step checklist/action plan that may help: https://www.compliancecohort.com/blog/summary-of-reg-cc-changes-for-july-2020
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2230669 - 02/10/20 08:11 PM Re: Reg. CC - New amount of $5,525 on Large Deposits TeamComply
BrianC Online
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BrianC
Joined: Nov 2004
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Illinois
From Sheldon's citation above...

Quote
...a change that expedites the availability of funds may be disclosed...


"Contact us for information on changes" is not a disclosure. If it were, our account opening disclosure could say, "Contact a teller to find out our hold policy."

As Adam notes, your disclosure to your customer must provide the specifics about what is changing.
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