Fed Ups Funds Availability For Checks

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WASHINGTON – New rules being finalized by the Federal Reserve will require all credit unions and banks to provide next-day availability for the first $200 of a deposit not otherwise subject to next-day availability.

The rules, required under last year’s Wall Street reform bill, amend its Regulation CC, Expedited Funds Availability Act, to increase the threshold from the current $100, while indexing regular increases every five years.

That means if a credit union decides to place a case-by-case hold on a check deposit, it will have to give the member availability on the first $200, instead of $100, of that deposit by the next business day.

The change will impact credit unions’ disclosures as well as hold-placing practices. The credit union’s funds availability policy will need to be updated and approved by the board of directors.

Member disclosures will need to be changed, too. Credit unions will need to change signs at teller windows and train employees on the new policy.

The Fed is proposing several other changes to Reg CC to encourage credit unions and banks to clear and return checks electronically. One would entitle a credit union or bank to the expeditious return of a check only if it agrees to receive returned checks electronically. Another would permit a credit union responsible for paying a check to require that checks presented to it for same-day settlement be presented electronically.

The Fed also has proposed shortening the safe-harbor period for an exception hold to four business days, and removing references in Reg CC to “non-local” checks, which generally are subject to holds of two business days.


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