All in Regulation CC

Reg CC Holds on Savings Accounts

Adam uses this Compliance Clip (video) to explain how Regulation CC holds apply to savings accounts. Specifically, Adam answers the question on how long a next day item (like a cashier’s check or treasury check) can be delayed on a savings account. After a quick deep dive into the applicability of Regulation CC, Adam explains his answer in the geeky detail that only he can deliver in such an exciting manner.

In auditing check holds over the years, I have often found violations of of Regulation CC.  These violations result from a number of things, such as incorrectly calculating the amount of a hold or incorrectly choosing the wrong date to make funds available.  Often times, there isn’t a pattern or practices as to why these violations occur - other than a lack of training - though I have noticed a trend of violations relating to one specific special exception hold reason: The reasonable cause to doubt collectibility.

Two sets of comments are due next week.

First, Tuesday, February 5 marks the last day to comment regarding the proposal to increase the appraisal threshold for residential real estate transactions from $250,000 to $400,000.  The proposed rule provides thirteen questions for which the agencies are seeking comment.

Secondly, comments regarding the Regulation CC proposal must be in by Friday, February 8, 2019.  This request for comment does two things as the proposal would first implement new changes to the Expedited Funds Availability Act and also provides an additional opportunity for public comment on the 2011 funds availability proposal that was never finalized.

On 11/20/18, the CFPB and Federal Reserve jointly issued a 58 page “proposed rule and reopening of comment period for existing proposed rule” for Regulation CC.  This request for comment does two things as the proposal would first implement new changes to the Expedited Funds Availability Act and also provides an additional opportunity for public comment on the 2011 funds availability proposal that was never finalized.

Comments must be received within 60 days after the date of publication to the Federal Register.

As most of you probably know, we have been expecting a revised Regulation CC for years now.  Sure, there were a few updates to Subparts A, C & D, such as new requirements for mobile deposit endorsements that went into effect on July 1, 2018, but what we are really waiting on are the revisions to Subpart B.  In the meantime, however, banks are still required to comply with the rules of Subpart B of Regulation CC, including hold time frames for deposits, account disclosures, and additional disclosure requirements. While these rules have been around for years, we still continue to see questions and misunderstandings about some of these rules.  In particular, I received a question this week regarding the lobby disclosure requirements under regulation CC.

As more and more community banks and credit unions are offering mobile deposits (also known as consumer remote deposit capture), it is important for these financial institutions to understand the rules that govern mobile deposits and how this affect their liability under applicable regulations.  One of the main elements to understand is how a mobile deposit endorsement will affect the liability of the financial institution in regards to checks that are deposited twice; once through mobile deposit and then a second time (usually at another financial institution) with the paper check.