Regulation CC Lobby Disclosure Requirements

Regulation CC Lobby Disclosure Requirements

This Compliance Clip (video) reviews the lobby disclosure requirements under Regulation CC. Adam discusses applicable banking regulations and what must be in the lobby and how availability policies apply to areas like the drive-up or even the night depository.

The following is a transcript of this video:

“The question we have today is what are the lobby disclosure requirements under regulation CC? Well, to answer this we go to regulation CC which the citation is 229.18. Here it says that a bank “must post in a conspicuous place at each location where its employees receive deposits to consumer accounts a notice that sets forth the time periods applicable to the availability of funds deposited into a consumer's account.” As you can see, this regulatory text is pretty general and somewhat ambiguous.

To further understand this, let's take a look at the commentary to 229.18. The commentary explains that the notice is required at each location where its employees accept consumer deposits. This means you must have a disclosure at your teller line, of course, but you might not have one at a new accounts desk. If these areas are separate from the teller line and also accept deposits for consumers, you are going to need a Lobby disclosure at this location as well. The commentary also expands by saying that the disclosure must specifically list the disclosure periods, but that it does not need to be posted at each teller window - but at a central location that is likely to be seen by all.

For example, the commentary talks about how a lot of teller lines have an actual line made out of ropes and if there is a sign at the beginning of the line, that everybody would see that disclosure and you would not need a specific sign at every single location.  While a sign a sign every single location is technically fine, most banks are not going to do this.

If you aren’t going to do this, you need to make sure the sign can be seen by anyone making a deposit at any of the teller windows.  For example, I have seen some teller lines that are just huge as they go on and on all the way down and you see just one tiny sign in the far corner, which is probably not good enough. You need to at least put the sign in the middle of the teller line or have a couple of signs that are likely to be seen by all.

Also, is important to note here that the commentary tells us that the disclosure is actually not required in drive-thrus and is not required at night  drops. This means that you can exclude the lobby disclosure from your drive-thrus and your night drop and not worry about it at all.

Now, this tells us where the disclosure needs to be located, but what needs to be in the disclosure?   We find this information in the model notices. These notices are found in appendix C of Regulation CC and there are actually two model notices we could use. The first is c - 17 which is actually the maximum statutory limits approach which most financial institutions don't utilize. Most banks are case-by-case banks and would use model form c - 18. C-18  is just a short paragraph that gives the availability for case-by-case holds but doesn't actually talk about special exception or new account holds. The disclosure language ends by saying that your deposits will generally be available on the 2nd business day after the day of deposit. I have seen some auditors and even examiners say that this disclosure is not proper and that a bank needs to also disclose new account in special exception holds, but model form c - 18 does not require that as it only gives the disclosure for case-by-case hold. Therefore, if you follow model form c - 18 that is all you need for your lobby disclosure.”

CIP Requirements for Banks and Credit Unions

Agencies Release CRA Ratings from September 2018