When I go to Reg CC in the Alphabet Soup section of BOL there are two different Commentaries indicated. The first one is "Appendix E to part 229 - Commentary" and then there is "Reg CC Commentary" at the bottom. I have noted that there is some information that is not the same in both and wonder if both are valid to use or if one or the other is a more recent version.

I'm going to get to the bottom of this and will post the answer here, Frank. Thank you.

John Burnett
Bankersonline.com

Frank, Do you have one instance you can direct me to that reflects a difference between the two? That will help me figure out which is the most current.

Actually, I found the best solution. I created a completed updated Commentary page, and updated the Reg. CC table of contents page to point to it (and only it).

Thanks for the clarification John. The section I was referring to was 229.16(c) Comment 2 d. (I think that is the exact cite) which in the commentary you removed said that "Notice to the customer also may be provided at a later time, if the facts upon which the determination to invoke the exception do not become known to the depository bank until after notice would otherwise have to be given." The current commentary does not use the phrase about the facts used in making the determination, but instead says it can be delayed "...if the decision to delay availability is made after the time of deposit." It appears to me that the revised commentary is more lenient as to when the notice can be delayed. Would you agree?

Yes. Thank you Frank.

The Commentary to Reg CC states that "Notice to the customer also may be provided not later than the close of the business day following the banking day on which the deposit was made if the decision to delay availability is made after the time of the deposit." Could the bank have procedures that the determination to place a hold will never be made at the time of the deposit, and will only be decided in a back office environment? In this way the notice would ever be given at the time of deposit and could always be mailed either the same day or the following business day and still be in compliance with the timing requirements.
I would appreciate any comments.

Yes, a end of day review of deposits would be a way of identifying and then notifying the customer within the timeframes allowed. While not the most customer friendly method of doing this, it likely will prevent incorrect Reg CC holds being placed. A possible downside is that most likely fewer holds will be placed.

As you stated, the hope is that placing the holds in the back office will result in more accurate holds being given. I don't know that having less holds is a bad thing as long as the holds are placed on the items that actually need it. I have seen holds placed for $35. My concern is that the procedure doesn't follow the true intent of the regulation, which is to tell the customer that there will be a hold on their funds so that they can allow for it. Even if the notice is sent out the same day the customer will not get it until at least the following day. If the deposit is made on a Friday, it is possible that the customer will not get the notice until it has actually expired, although it will be in compliance.

We routinely used this practice of "after the fact" holds. While it worked well for us, I suspect our refund rate of fees resulting from the practice would be higher than a similar bank which worked in real time. It may be a trade off, but it worked in our environment.