[69 FR 47311, Aug. 4, 2004, as amended at 82 FR 27584, June 15, 2017]. This part does not. 1004; 12 U.S.C. If a foreign office of a U.S. or foreign bank sends checks to its U.S. correspondent bank for forward collection, the U.S. correspondent is the depositary bank because foreign offices of banks are not included in the definition of bank. A paying bank indemnifies a drawer for a substitute check that the drawer alleged was a forgery that would have been detected had the original check instead been presented. Otherwise, the check is a nonlocal check. 1. For example, a deposit made at a nonproprietary ATM on a Monday, including any deposit by cash or checks that would otherwise be subject to next-day (or second-day) availability, must be made available for withdrawal not later than Monday of the following week. Regulation CC requires next-day availability for these checks if they are. Under 229.31, a bank designated as a payable-through bank or payable-at bank and to which the check is sent for payment or collection is responsible for the expedited return of checks and notice of nonpayment requirements of Subpart C. The payable-through or payable-at bank may contract with the payor with respect to its liability in discharging these responsibilities. 5. 1. A collecting bank normally would deliver all paper checks to one location. The act lets banks send checks electronically instead of requiring them in paper form when processing funds with banks they have agreements in place with. A deposit made at an ATM or off-premise facility (such as a remote depository or a lock box) is considered made at the branch holding the account into which the deposit is made for the purpose of determining the day of deposit. No later than the 10th business day after the banking day on which the indemnifying bank receives a claim that meets the requirements of paragraph (b) of this section, the indemnifying bank shall. 2. Merger transaction is defined in 229.2(t). For example, if a bank learns that a check has been delayed in the process of collection due to severe weather conditions or other causes beyond its control, an emergency condition covered by this section may exist and the bank may place a hold on the check to reflect the delay. Under the UCC, the first collecting bank might ultimately recover from the depositary bank's customer or from the other parties on the check. Although the lack of requirement for notice of nonpayment under this paragraph will create risks for the depositary bank, the inability to identify the depositary bank will generally be due to the depositary bank's, or a collecting bank's, failure to indorse as required by 229.35(a). Regulation CC applies to transaction accounts as defined in Regulation D. In most institutions, that means NOW and demand deposit accounts. Emergency conditions exception notice. If a bank provides the special deposit slips only upon the request of a depositor, however, the teller must advise the depositor of the availability of the special deposit slips, or the bank must post a notice advising customers that the slips are available upon request. (d) Recredit does not abrogate other liabilities. (See also the Board's preemption determination regarding the Uniform Commercial Code, section 4213(5), pertaining to availability of cash deposits.). 2. The Board will adopt regulations or issue orders to implement this statutory authority if and when circumstances requiring its implementation arise. A paying bank may agree to accept presentment of electronic checks. The terms transfer and consideration have the meanings set forth in the Uniform Commercial Code and in addition, for purposes of subpart D, (1) The term transfer with respect to a substitute check or a paper or electronic representation of a substitute check means delivery of the substitute check or other representation of the substitute check by a bank to a person other than a bank; and. Under Subparts A and C, the term bank includes not only any depository institution, as defined in the EFA Act, but also any person engaged in the business of banking, such as a Federal Reserve Bank, a Federal Home Loan Bank, or a private banker that is not subject to Regulation D. Thus, accounts at these institutions benefit from the expeditious return requirements of Subpart C. 3. Example of accounting for aggregate decrease in subsequent period. UCC sections affected. 4001(11)) defines depository check as any cashier's check, certified check, teller's check, and any other functionally equivalent instrument as determined by the Board., [2] Nothing in the EFA Act or this regulation affects terms of account arrangements, such as negotiable order of withdrawal accounts, which may require prior notice of withdrawal. (i) If a loss described in paragraph (a) of this section results in whole or in part from the indemnified person's negligence or failure to act in good faith, then the indemnity amount described in paragraph (b)(1) of this section shall be reduced in proportion to the amount of negligence or bad faith attributable to the indemnified person. 4. (ii) Effective July 1, 2020, the amount is $450. We can process nonlocal checks drawn on financial institutions in certain areas faster than usual. 6. A depositor's account agreement with a bank provides that the depositor is entitled to receive original cancelled checks back with his or her periodic account statement. Model C3 Next-day availability, case-by-case holds to statutory limits, and 229.13 exceptions. Some substitute checks will not be created directly from the original check, but rather will be created from a previous substitute check. (2) the substitute check giving rise to the claim. 1. Thus, a bank need not disclose to some customers that they receive faster availability than indicated in the disclosure. b. (i) Depositary bank without accounts. (9) Appendix E of this part contains Board interpretations, which are labeled Commentary, of the provisions of this part. a. The check is postdated or has a stale date. (d) Repeated overdrafts. The delay for other check deposits depends on whether the check is a local or a nonlocal check. Funds deposited through a lock box arrangement are considered deposited on the day the deposit is removed from the lock box and are accessible to the depositary bank for processing. Representation by Customer. Aggregation of deposits to multiple accounts is permitted because the Board believes that the risk to the depositary bank associated with large deposits is similar regardless of how the deposits are allocated among the customer's accounts. Where a check is payable by one bank, but payable through another, the routing number is that of the payable-through bank, not that of the payor bank. (i) Prior to July 21, 2011, the amount is $100. 1. (2) The frequency and persistence of failures of compliance; (4) The number of persons adversely affected; and. purpose deposits. Example. (2) If a depositary bank invokes an exception contained in paragraphs (b) through (e) of this section with respect to a check described in 229.10(c)(1). Answer: Unfortunately, checks drawn on a credit card account are just treated as regular, ordinary checks under Reg CC. If an unstaffed facility, such as a night depository or lock box, is on branch premises, the day of deposit is determined by the banking day at the branch at which the deposit is received, whether or not it is the branch at which the account is maintained. 6. The Board has been requested, in accordance with 229.20(d) of Regulation CC (12 CFR part 229), to determine whether the Expedited Funds Availability Act (the Act) and subpart B (and in connection therewith, subpart A) of Regulation CC, preempt provisions of Massachusetts law relating to the availability of funds. The EFA Act defines a certified check as one to which a bank has certified that the drawer's signature is genuine and that the bank has set aside funds to pay the check. 229.16 Specific availability policy disclosure. A bank must, however, retain a copy of each notice provided pursuant to its use of the reasonable cause exception under 229.13(g) as well as a brief description of the facts giving rise to the availability of that exception. Otherwise, the bank must provide the disclosure no later than the time at which the bank provides a substitute check in response to the consumer's request. We will notify you within one day of any such reversal. Records may be stored by use of microfiche, microfilm, magnetic tape, or other methods capable of accurately retaining and reproducing information. Instead, the bank may provide a total dollar amount for each of the time periods when funds will be available, or provide the customer with an explanation of how to determine the amount of the deposit that will be held and when the held funds will be available for withdrawal. The routing number takes two forms: a fractional form and a nine-digit form. However, if no reasonable delivery requirements are established or if the paying bank does not make provisions for accepting delivery of checks during its non-business hours, leaving the paper checks at the presentment location constitutes effective presentment. 1. 1. (See 229.35(a)). The Maine law and regulation govern the availability of funds to any deposit account, as defined in the Board's Regulation D (12 CFR 204.2(a)). When paragraph (g)(2) or (g)(3) requires disclosure of the time period within which deposits subject to the exception generally will be available for withdrawal, the requirement may be satisfied if the one-time notice states when on us, local, and nonlocal checks will be available for withdrawal if an exception is invoked. Definition, History, Benefits, and Criticism, Basel II: Definition, Purpose, Regulatory Reforms, Basel III: What It Is, Capital Requirements, and Implementation, A Brief History of U.S. Banking Regulation, How the Banking Sector Impacts Our Economy. 3. This advice must be conspicuous, such as a stamp on the check or a notice on the cash letter. B. These provisions require that the proceeds of nonlocal checks payable by a New York institution be made available for withdrawal not later than the start of the fourth business day following deposit, if deposited in a bank, or the fifth business day following deposit, if deposited in a savings institution. Payment must be made so that the funds are available for use by the bank returning the check to the depositary bank on the day the check is received by the depositary bank. (k) Notice of claim. 2. 4. b. Under the permanent schedule in the California regulations, a depositary bank with a four-digit routing symbol of 1210 or of 1220 that receives for deposit a check drawn on a nonlocal, in-state commercial bank or foreign bank branch must make the funds available for withdrawal by the fourth business day after the day of deposit. Indorsing parties other than banks, e.g., corporations, will benefit from the faster return of checks if they protect the identifiability and legibility of the depositary bank indorsement by staying clear of the area on the back of the paper check reserved for the depositary bank indorsement. An institution is deemed to have provided a service when a fee required to be disclosed is assessed. This paragraph permits a paying bank to rely on the routing number of the depositary bank as it appears on the check (in the depositary bank's indorsement) or in the electronic check sent pursuant to an agreement when the check, or electronic check, is received by the paying bank. (See 229.42). (2) Deposited by a check drawn on or payable at or through a paying bank not located in the same state as the depositary bank. 229.34(a) Warranties With Respect to Electronic Checks and Electronic Returned Checks. 9. Delivering a check to a nonbank that is acting on behalf of a bank (such as a third-party check processor or presentment point) is a transfer of the check to that bank. To meet the requirements of a specific availability policy disclosure under 229.17 and 229.18(d), a bank shall provide a disclosure describing the bank's policy as to when funds deposited in an account are available for withdrawal. A substitute check that is the legal equivalent of an original check under paragraph (a) of this section shall be subject to any provision, including any provision relating to the protection of customers, of this part, the U.C.C., and any other applicable federal or state law as if such substitute check were the original check, to the extent such provision of law is not inconsistent with the Check 21 Act or this subpart. 1. In addition, a total of $400 of other funds becoming available on a given day is available for withdrawal in cash at or after (time no later than 5:00 p.m.) on that day.