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Reg CC Guidelines for a Timely Notice

Answered by: 
John Burnett

Question: 
Under Reg CC, I need assistance in regards to when a notice must be mailed to a customer for an ATM deposit. To detect and prevent fraud losses, our detection teams currently review ATM deposits made to an account on the same day of deposit, but prior to posting to a customer's account or prior to our processing area posting it to a customer's account. After nightly posting by our core system, when transactions are posted and services are updated for the next day's work, holds are then applied to the account (early AM time, Day 2). Reg CC notices are mailed the following day after the hold is applied. Does this fall within the Reg CC guidelines for a timely notice or since we reviewed the deposits (prior to posting) do we have to send a notice the following day, basically the same day the hold is applied to the account?
Answer: 

I'd have to say "no." Under the regulation (229.13(g)), if you don't provide a required notice of an exception hold to the depositor when the deposit is made, you generally must mail or deliver the notice to the customer as soon as practicable, but no later than the first business day following the day the facts became known to the depositary bank, or the deposit is made, whichever is later. In your scenario, it appears the decision to place the hold is made later in the day on the date the deposit is made, which would call for mailing the notice on Business Day 2. You're mailing them on Business Day 3.

It would seem that the holds should be placed before the processing of Day 1's deposit so that any notice might be generated during that night's update and available to mail on Day 2.

First published on 08/15/2021

Filed under: 
Compliance
Filed under compliance as: 
Availability
Reg. CC

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