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#2231358 - 02/20/20 03:22 PM Reg CC 7.1.20 Changes
ALW Offline
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Hello!

Would anyone be willing to share what they will be utilizing for a statement message for the upcoming threshold changes for Reg CC.

Will the message need to include reference to both the next day availability change from $200 to $225 AND the large dollar exception hold from $5,000 to $5,525?

Thanks!

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#2231420 - 02/20/20 08:07 PM Re: Reg CC 7.1.20 Changes ALW
John Burnett Offline
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It will not have to refer to the $5,525 threshold for new account holds on next day items, but it will need to refer to the large dollar deposit hold and, if you disclosed the $5,000 amount involved in the excessive overdrafter hold, you'll need to include it in the notice. And the $200 to $225 increase. If you do anything around the §229.12(d) "Time period adjustment" provision, you'll need to include the change from $400 to $450.
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#2231523 - 02/24/20 01:33 PM Re: Reg CC 7.1.20 Changes ALW
trout22 Offline
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I was just thinking along these lines this morning...

Curious how many were thinking to utilize a statement message vs. sending full updated funds availability disclosures? Or will you do both?

My initial though is to go the statement message route, disclose the new $225 threshold (not the others, as they're more bank-internal components), and maybe provide a link to our website where I could post the full EFA disclosure. Of course, it's also always available upon request.

It's early in the game but about time to really dig in and see what expectations will be and start executing plans. I believe there's commentary that examiners are considering this an event requiring 30 days advance notice (even though it is a benefit to the consumer).

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#2231566 - 02/24/20 09:13 PM Re: Reg CC 7.1.20 Changes ALW
Inherent_Risk Offline
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Glad you pointed out the advance notice. Has to 30 days before unless it "expedites the availability of such funds."

From the final rule:

"The Regulation CC change-in-terms provision (§ 229.18(e)) mirrors the statutory changein-
terms provision, which is set forth in EFA Act section 605(c)(2). That statutory provision
requires an institution to send a written notice to consumer account holders at least 30 days
before implementing a change to the institution’s funds-availability policy and further states that
“any change which expedites the availability of such funds shall be disclosed not later than 30
days after implementation.” See EFA Act section 605(c)(2) (12 USC 4004(c)(2)).
In their final rule, the Agencies decline to establish in Regulation CC an exception to the
requirement to send a change-in-terms notice, as this requirement is established by statute.
However, the Agencies note several ways that depository institutions may lower their costs under
the rule, including providing the required notice electronically and sending it with the monthly
account statement, as follows."

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#2231568 - 02/24/20 09:32 PM Re: Reg CC 7.1.20 Changes ALW
BrianC Offline
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Going from $200 to $225 and $5,000 to $5,525 does expedite the availability of funds (since more funds are available sooner) so this change requires notice within 30 days after the change.
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#2231586 - 02/25/20 12:27 PM Re: Reg CC 7.1.20 Changes ALW
Adam Witmer Offline
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I agree with Brian. The threshold changes in and of themselves expedite the availability of funds for customers, so notice 30 days after the changes would be appropriate for those changes. That said, if a financial institution made additional changes that did not expedite the availability of funds, such as how last fall some financial institutions had new restrictions (for certain US territories - which was also part of this rule), then advance notice would be required.

As Brian said, just changing $200 to $225 and $5,000 to $5,525 actually expedites funds availability for customers, so advance notice isn't required just for these changes.
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#2231662 - 02/25/20 07:41 PM Re: Reg CC 7.1.20 Changes ALW
John Burnett Offline
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Originally Posted by Inherent_Risk
In their final rule, the Agencies decline to establish in Regulation CC an exception to the
requirement to send a change-in-terms notice, as this requirement is established by statute.
However, the Agencies note several ways that depository institutions may lower their costs under
the rule, including providing the required notice electronically and sending it with the monthly
account statement, as follows."


Don't get the idea that that paragraph from the prefatory text that accompanied the final rule at publication gives you a license to send the change notice electronically. You can only do it electronically if you comply with the E-SIGN Act and have consumer demonstrative consent for electronic notices, etc. Interestingly, though if you already have E-SIGN consent to provide electronic statements on the account, because you can include the change notice on or with a statement, you can include it on or with an electronically delivered statement.

And if your bank currently uses the special rule for timing availability under 229.12(d)-- the so-called "$400 rule" -- that's another amount that you'll need to include in your notice, since that amount was goosed up to $450.
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#2231663 - 02/25/20 07:48 PM Re: Reg CC 7.1.20 Changes ALW
John Burnett Offline
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And for the compliance officers out there looking to save every nickel, you can also note that the change in terms notice is only required for consumer accounts. While I think that a negative change notice should go to all affected accounts, a positive change notice to a non-consumer account is probably something you can save some money on.


229.18(e): Changes in policy. A bank shall send a notice to holders of consumer accounts ....
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#2231776 - 02/26/20 06:36 PM Re: Reg CC 7.1.20 Changes ALW
David Dickinson Offline
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Back to the original question about suggesting wording. How about this:

Effective 7/1/2020, we are increasing the amount we make available for withdrawal by checks not subject to next day availability to $225. In addition, the amount available for withdrawal on exception holds for large deposits, new accounts and the amount for determining a repeat overdraft is increasing to $5,525.

I also agree with John, that only CONSUMER customers must be notified and I also agree that it can be up to 30 days AFTER (IOW, 7/31/2020).
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#2232050 - 02/28/20 05:30 PM Re: Reg CC 7.1.20 Changes David Dickinson
trout22 Offline
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Beautifully stated... now I just have to hope that verbiage fits within my character limit!

Thank you all for the insight.

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#2232691 - 03/10/20 02:29 PM Re: Reg CC 7.1.20 Changes ALW
Jolynn Offline
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We did a software update and it changed our safeguard exceptions section to the $5,525 (for check deposits). Since this is going to be printing on our Reg CC disclosure (I can not change this amount) does my 30 day window start now?

As a general rule our bank does not practice holds. We practice same day availability - with the rare occasion in which an item is sent for direct collection.

Thanks!

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#2232717 - 03/10/20 05:39 PM Re: Reg CC 7.1.20 Changes ALW
John Burnett Offline
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That depends. If your teller sets up an exception hold today for a large deposit item, would it hold all but the first $5,000 or the first $5,525. If the latter, your 30-day notice period started when the software update was done.

Of course if the bank never places a hold, it won't matter.
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#2234842 - 04/15/20 03:07 PM Re: Reg CC 7.1.20 Changes David Dickinson
John Burnett Offline
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Originally Posted by David Dickinson
Back to the original question about suggesting wording. How about this:

Effective 7/1/2020, we are increasing the amount we make available for withdrawal by checks not subject to next day availability to $225. In addition, the amount available for withdrawal on exception holds for large deposits, new accounts and the amount for determining a repeat overdraft is increasing to $5,525.

I also agree with John, that only CONSUMER customers must be notified and I also agree that it can be up to 30 days AFTER (IOW, 7/31/2020).

Thanks, David. One comment on your wording -- The model forms for Reg CC don't give the dollar figure related to the definition of a repeatedly overdrawn account. If the $5,000 amount isn't included in the bank's account disclosure (most will use the model language -- "You have overdrawn your account repeatedly in the last six months" in the list of reasons that "Longer Delays May Apply"), the bank would not have to mention "the amount for determining a repeat overdraft" and that would shorten the message by 40 or so characters.
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#2235192 - 04/18/20 12:01 AM Re: Reg CC 7.1.20 Changes ALW
David Dickinson Offline
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Thanks John. Great suggestion.
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#2236814 - 05/18/20 03:04 PM Re: Reg CC 7.1.20 Changes David Dickinson
TeamComply Offline
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So we include model language on our hold notice form, that includes (in part) the following sample verbiage:

"We are delaying the availability of (amount being held) from this deposit. These funds will be available on the (number) business day after the day of your deposit.

We are taking this action because:

—A check you deposited was previously returned unpaid.

—You have overdrawn your account repeatedly in the last six months.

—The checks you deposited on this day exceed $5,000."


Effective July 1, 2020 we will need to update the reference above of $5,000 to $5,525, correct? I was told by someone else in the bank we didn't have any hold notice changes to make as part of the July 1 amendments, but I believe they are mistaken.

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#2236818 - 05/18/20 03:59 PM Re: Reg CC 7.1.20 Changes ALW
BrianC Offline
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Yep, the hold notice language that mentions the large dollar exception threshold will need to be updated.
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#2236821 - 05/18/20 04:19 PM Re: Reg CC 7.1.20 Changes ALW
TeamComply Offline
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Thanks, so starting July 1, the deposit has to be more than $5,525 to be considered for a "large deposit" exception hold under the regulation. Correct?

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#2236837 - 05/18/20 05:40 PM Re: Reg CC 7.1.20 Changes ALW
BrianC Offline
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(b) Large deposits. Sections 229.10(c) and 229.12 do not apply to the aggregate amount of deposits by one or more checks to the extent that the aggregate amount is in excess of $5,000 [effective 7/1/2020, $5,525] on any one banking. day. For customers that have multiple accounts at a depositary bank, the bank may apply this exception to the aggregate deposits to all accounts held by the customer, even if the customer is not the sole holder of the accounts and not all of the holders of the accounts are the same.
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#2236842 - 05/18/20 06:17 PM Re: Reg CC 7.1.20 Changes BrianC
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Thanks Brian!

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#2236854 - 05/18/20 07:24 PM Re: Reg CC 7.1.20 Changes ALW
HMS Pippii Offline
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snorkeling in warm, clear wate...
What's the shortest statement message that's compliant? Anyone come up against character limits?
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#2236990 - 05/20/20 01:29 PM Re: Reg CC 7.1.20 Changes ALW
Adam Witmer Offline
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I'm not sure we can give a hard answer on this one, but if you take David's suggested language above coupled with John's comment to exclude overdrafts (if you can - see John's comment), then you come up with this:

"Effective 7/1/2020, we are increasing the amount we make available for withdrawal by checks not subject to next day availability to $225. In addition, the amount available for withdrawal on exception holds for large deposits, and new accounts is increasing to $5,525."

I get about 267 characters and I'm sure you could chisel this down a bit. For example, the following brings it down to 244 characters:

"On 7/1/2020, we are increasing the amount available for withdrawal by checks not subject to next day availability to $225. Also, the amount available for withdrawal on exception holds for large deposits and new accounts is increasing to $5,525."
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#2236998 - 05/20/20 02:42 PM Re: Reg CC 7.1.20 Changes ALW
John Burnett Offline
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Question -- Is there anyone out there who will admit their bank uses the $400 (soon to be $450) added availability rule in §229.12(d) to delay second day funds to a third day?
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#2237046 - 05/20/20 06:10 PM Re: Reg CC 7.1.20 Changes ALW
Adam Witmer Offline
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I've not been able to find a bank that does, so I'm interested too. wink
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#2237063 - 05/20/20 08:53 PM Re: Reg CC 7.1.20 Changes ALW
Happy Offline
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If a bank does not do Case by Case holds, can/should we eliminate .............the amount we make available for withdrawal by checks not subject to next day availability to $225............. from the statement message referred to above? We do not disclose it on our Reg. CC disclosure.

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#2237066 - 05/20/20 09:18 PM Re: Reg CC 7.1.20 Changes ALW
Adam Witmer Offline
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If you don't currently disclose it on your Reg CC disclosure, you won't need to disclose it in your customer notice.
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