Ground Rules and Definitions

Available at the Start of the Business Day

When Regulation CC requires that funds be made available for withdrawal on a particular business day, it means those funds must be made available at the start of the business day. [12 CFR 229.19(b)] In particular, the rule says the funds must be made available for withdrawal by the later of 9 A.M. (local time at the branch where the account is maintained) or the time when your teller facilities (including ATMs) are available for customer withdrawals. So, for example, if your branch offices open at 10 A.M. but your ATMs operate 24 hours per day for customer withdrawals, you would have to make the funds available through the ATM by 9 A.M. On the other hand, if your branch offices open at 10 A.M. and you do not have ATMs, you don’t have to make the funds available until you open. And finally, if your branch offices open at 8:30 A.M. and you have no ATMs, you don’t have to make the funds available until 9 A.M.

Definition of “Available for Withdrawal”

The Regulation also has a very definite meaning for the term “available for withdrawal.” The term “…means available for all uses generally permitted to the customer for actually and finally collected funds under the bank’s account agreement or policies, such as for payment of checks drawn on the account, certification of checks drawn on the account, electronic payments, withdrawals by cash, and transfers between accounts.” [12 CFR 229.2(d)] Therefore, when the Regulation requires that funds be “available for withdrawal” on a particular business day, the funds must be available for all these uses, to the extent that the depositor can, in general, put account funds to these purposes. [Commentary, §229.2(d)-1] (For example, if you do not generally certify checks, this definition does not require you to begin doing so.)

You should be aware of two qualifications to these rules. The first is what we will be calling the “$400 [$450 effective 7/1/20] cash-withdrawal rule.” We will go over that rule in detail at the appropriate points. Second, funds are still considered “available for withdrawal” when you hold them to satisfy an obligation other than the customer’s potential liability for the check. [Commentary, §229.2(d)-2] For instance, if you are holding the funds to satisfy a garnishment, tax levy, court order, etc., you will be considered to have made the funds available for withdrawal for purposes of Regulation CC. The same is true if you are holding the funds to satisfy the customer’s liability arising from the certification of a check, sale of a cashier’s or teller’s check, guaranty or acceptance of a check, or similar transaction to be debited from the customer’s account.

Definitions of “Business Day,” “Banking Day,” and “Banking Day of Deposit”

The availability time frames in Regulation CC are phrased in terms of a number of business days after the banking day of deposit. For example, local checks under the permanent schedule must be available for withdrawal no later than the second business day after the banking day of deposit. To understand exactly what this means, you must understand what the Regulation means by “business day,” “banking day,” and “the banking day of deposit.”

A business day is any calendar day other than Saturdays, Sundays, and federal legal holidays. [12 CFR 229.2(g)] A banking day is that part of any business day on which an office of an institution is open to the public for carrying on substantially all of its banking functions. [12 CFR 229.2(f)]

The banking day of deposit is, generally, the day the deposit is actually made. However, there are a number of qualifications to that statement.

First, if the day the deposit is actually made is not a banking day, then the banking day of deposit is the next following banking day. [12 CFR 229.19(a)(5)(i)]

Second, if the deposit is made after the institution’s cut-off time on a banking day, the deposit is considered made on the next following banking day. [12 CFR 229.19(a)(5)(ii)] In effect, the cut-off time is the end of the “banking day.”

Third, if a deposit is made at a night depository, lock box, or similar facility, the deposit is considered made on the banking day the deposit is removed from the facility and is available for processing by you. [12 CFR 229.19(a)(3)]

Fourth, funds deposited at an ATM that is not on or within 50 feet of the premises of the depository bank are considered deposited on the day the funds are removed from the ATM, if funds are normally removed from the ATM no more than two times per week. [12 CFR 229.19(a)(4)]

Fifth, deposits made by mail are considered made when you receive the deposit. [12 CFR 229.19(a)(2)]

Sixth, if a deposit is made to a deposit box in your lobby that is accessible to your customers only during regular business hours, the deposit is treated the same as if it were made in person to a teller, unless you put a notice on the box stating when the deposit will be considered received, which would allow you to treat the deposits exactly the way you treat deposits to night depositories. (See the third condition above.) [Commentary, §229.19(a)‑2]

All other deposits, such as those made in person at staffed facilities, ATMs (other than those we just mentioned), or contractual branches, are considered deposited when received by you. [12 CFR 229.19(a)(1)] A deposit at a contractual branch is considered received by you when it is received by the teller at the contractual branch. [12 CFR 229.19(a)(1)] The deposit is not, however, treated as received in person by one of your employees, which, as we will see later, is a condition for next-day availability for some deposits. [Commentary, §229.10(c)-3]

Regulation CC allows you to have a cut-off time, or a time during a banking day after which all deposits are considered made on the next following banking day. But the Regulation prohibits cut-off times earlier than 2 P.M., except for deposits made at ATMs, contractual branches, and other off-premise facilities, which can be subject to cut-off times as early as 12 noon. [12 CFR 229.19(a)(5)(ii)]

Let’s look at some examples of how the rules about business days, banking days, and cut‑off times work.

Suppose you have a cut-off time of 2 P.M. and a customer makes a deposit at 9 A.M. on a Tuesday on which you are open for substantially all your banking functions and that is not a federal legal holiday. Tuesday is the banking day of deposit in this case. If the customer makes the deposit at 3:30 P.M. on that Tuesday, then Wednesday is the banking day of deposit if Wednesday is not a federal legal holiday and you are open for substantially all your banking functions. If you are open for business on Saturday and the customer makes a deposit with you, the banking day of deposit is the following Monday (assuming Monday is not a federal legal holiday and you are open for substantially all your banking functions), since Saturday can never be a banking day even if you are open for business. Remember, a banking day is that part of a business day on which you are open to the public for carrying on substantially all of your banking functions. Since Saturday is not a business day under the definitions we gave above, Saturday can never be a banking day.

Although the Regulation prohibits cut-off times earlier than 2 P.M., it does not require that you stay open until then. [Commentary, §229.19(a)-6.c.] You can close whenever you want, and your closing time will be the end of that banking day. The definition of banking day is that part of a business day on which you are open to the public for carrying on substantially all of your banking functions. So, once you close, that banking day is over, and any deposits made after your closing time that day are not made during a banking day, which means they are treated as having been made the next banking day. Also, you can consider your institution closed at a certain time even if you remain open for limited purposes after that time. [Commentary, §229.19(a)-6.c.] For example, you could close at 12 noon but leave a drive-up teller window open for the limited purpose of receiving deposits and making cash withdrawals. Your closing time, for purposes of Regulation CC, is 12 noon since you are not open after that time “for carrying on substantially all of your banking functions.” Therefore, deposits made after 12 noon can be considered made on the next banking day. The rule is the same even if you reopen for all your functions after 2 P.M. Deposits made after your 12 noon closing time can be considered made on the next banking day. But you cannot reopen before 2 P.M. and still consider 12 noon to be your closing time. That would be viewed as having a cut-off time of earlier than 2 P.M. [Commentary, §229.19(a)-6.c.]

Generally, the banking day of deposit is determined according to the banking days of the branch where the deposit is made, whether the account to which the deposit is made is at that branch or not. [Commentary, §229.2(f) and (g)-3] So, for example, a deposit made on Tuesday at branch A to an account held at branch B would be considered made on Tuesday if Tuesday is a banking day for branch A and the deposit is made before branch A’s cut-off time, even if Tuesday is not a banking day for branch B. However, deposits made at off-premise ATMs or other off-premise facilities (such as night depositories) are considered deposited at the branch holding the account for purposes of determining the banking day of deposit. [Commentary, §229.2(f) and (g)-3] But deposits made at night depositories or lockboxes, etc., that are located on the premises of a branch, are considered made at that branch and the banking days of that branch will be used to determine the banking day of deposit, whether the account to which the deposit is made is held at that branch or not. [Commentary, §229.2(f) and (g)-3]