Section 12. The Permanent Schedule
Section 12 of Regulation CC [12 CFR 229.12] establishes availability time frames for check deposits that are not governed by Section 10, the next-day availability deposits. Section 12 is called the permanent schedule because it replaces what was known as the temporary schedule, which was in effect until September 1, 1990, and that provided for longer availability time frames than does the permanent schedule.
The permanent schedule has time frames for four categories of deposits: (1) local checks; (2) nonlocal checks; (3) deposits at nonproprietary ATMs; and (4) certain deposits made in institutions located in Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and, effective September 3, 2019 per the Final Rule, American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam.
Before we look at the time frames that apply to these categories, let’s first be precise about the parameters of the categories. Following are some relevant definitions from Regulation CC.
Definitions
A “local check” is a check “payable by or at a local paying bank or a check payable by a nonbank payor and payable through a local paying bank.” [12 CFR 229.2(r)] A “local paying bank” is “a paying bank that is located in the same check-processing region as the physical location of the branch, contractual branch, or proprietary ATM of the depository bank in which that check was deposited. [12 CFR 229.2(s)]
- The bank by which a check is payable, unless the check is payable at another bank and is sent to the other bank for payment or collection;
- The bank at which a check is payable and to which it is sent for payment or collection;
- The Federal Reserve Bank or Federal Home Loan Bank by which a check is payable;
- The bank through which a check is payable and to which it is sent for payment or collection if the check is not payable by a bank; or
- The state or unit of general local government on which a check is drawn and to which it is sent for payment or collection.
[12 CFR 229.2(z)]
An "automated teller machine" (ATM) is an electronic device at which a natural person may make deposits to an account by cash or check and perform other account transactions. [12 CFR 229.2(c)] Per the Final Rule, this definition was amended to limit ATMs to those "located in the United States."
To oversimplify a little, a check is local if the institution on which it is drawn, or by which it is payable, is physically located in the same Federal Reserve check-processing region as the branch, contractual branch, or proprietary ATM where the deposit was made. If the deposit was made at a nonproprietary ATM, the check is local only if the institution on which the check is drawn is located in the same check-processing region as both the branch where the account is held and the nonproprietary ATM. (So a check deposited at a nonproprietary ATM that is not located in the same check-processing region as the branch in which the account is held can never be a local check.)
Under these definitions, a check drawn on one institution but payable through another is either local or nonlocal depending on the location of the institution on which it is drawn (rather than the payable through institution) relative to the location of the depository bank. However, for purposes of Subpart C of Regulation CC (having to do with check return procedures), the location of the payable through institution is determinative. In other words, in deciding how quickly a payable through check must be made available, you look to the location of the institution on which it is drawn and disregard the location of the institution through which it is payable. But if you are a payable through institution returning a check, you compare your location to the depository bank’s location to decide how quickly notice of return must be made under Subpart C of the Regulation, rather than comparing the drawee institution’s location to that of the depository bank. See the chapter in this manual entitled “The Check Return Requirements and Indorsement Standards of Regulation CC” for details on check return requirements.
- Owned or operated by, or operated exclusively for, the depository bank;
- Located on the premises (including the outside wall) of the depository bank; or
- Located within 50 feet of the premises of the depository bank, and not identified as being owned or operated by another entity.
[12 CFR 229.2(aa)]
If more than one institution meets the owned or operated criterion, then the ATM is proprietary to the institution that operates it. [12 CFR 229.2(aa)]
A “nonproprietary ATM” is an ATM that is not a “proprietary ATM.” [12 CFR 229.2(x)]
We’re now ready to look at the time limitations Regulation CC establishes for each of the categories under the permanent schedule.
Availability Time Frames—General Rules
Local checks: Must be available for withdrawal no later than the SECOND business day after the day of deposit. [12 CFR 229.12(b)(1)]
Nonlocal checks: Must be available for withdrawal no later than the FIFTH business day after the day of deposit. [12 CFR 229.12(c)(1)(i)] (Remember that there are really no nonlocal checks since the consolidation of check processing regions.)
Deposits at nonproprietary ATMs: Must be available no later than the FIFTH business day after the day of deposit. [12 CFR 229.12(f)] This time frame applies to any type of deposit made at a nonproprietary ATM, including cash and other types of deposit that would otherwise be subject to next-day availability under Section 10. [Commentary, §229.12(f)-1]
Deposits in institutions located in Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands and , effective September 3, 2019 per the Final Rule, American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam: Add one business day to the time periods listed in this section if the deposit is made to an account at a branch located in one of these states and the check is drawn on or payable at or through an institution located in a different state. [12 CFR 229.12(e)] (For purposes of Regulation CC, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands are considered “states.”) [12 CFR 229.2(ff)]
$400 [Per Final Rule, $450 Effective 7/1/20] Cash-Withdrawal Rule
This rule allows you to delay, by one day, the customer’s ability to withdraw in cash a portion of a deposit of local checks, or a deposit at a nonproprietary ATM, from the normal time frames. I.e., you can delay the availability for withdrawal by cash of a local check until the third (instead of the second) business day after the day of deposit. But you must make $400 [$450 effective 7/1/20] of the deposit available for withdrawal by cash by 5 P.M. of the business day according to the normal time frame. I.e., for local check deposits, by 5 P.M. of the second business day after the day of deposit. The entire deposit must be available for withdrawal by means other than cash withdrawal within the normal time frames. [12 CFR 229.12(d)]
To put it another way, you may, if you choose, allow a customer to withdraw only $400 [$450 effective 7/1/20] in cash within the normal availability time frame for deposits of local checks. The customer can withdraw the rest in cash on the next business day. The entire deposit, however, must be available for other sorts of withdrawals (such as for the payment of checks drawn on the customer’s account) within the normal time frames.
When we say “withdrawals by cash” we also mean withdrawals that are similar to cash withdrawals in that they involve an irrevocable commitment to pay on your part. The term includes electronic payments, issuance of a cashier’s or teller’s check, certification of a check, over-the-counter payment of a check, or other irrevocable commitment to pay. The term does not include, however, the granting of credit to a bank, a Federal Reserve Bank, or a Federal Home Loan Bank that presents a check to you for payment. So, if your policy takes advantage of the $400 [$450 effective 7/1/20] cash-withdrawal rule, you will be able to restrict availability for withdrawal by these similar means until the third business day, but you would have to make $400 [$450 effective 7/1/20] dollars available for these types of withdrawals by 5 P.M. on the second business day. [12 CFR 229.12(d) and Commentary, §229.12(d)-3]
The $400 [$450 effective 7/1/20] that you make available by 5 P.M. in the normal time frame must be in addition to the $200 [$225 effective 7/1/20] you made available under Section 10 on the first business day. [12 CFR 229.12(d)] For example, if a customer deposits a local check in the amount of $1,000 on Monday, that customer could come in on Tuesday and withdraw $200 [$225 effective 7/1/20] in cash and then come in on Wednesday (the second business day) at 5 P.M. and withdraw an additional $400 [$450 effective 7/1/20] in cash so that you would have made $600 [$675 effective 7/1/20] available for cash withdrawal at that point. The remaining $400 [$325 effective 7/1/20] must be available for cash withdrawal at the beginning of the third business day, although it was already available for other forms of withdrawal by the beginning of the second business day.
The most you have to make available under this rule is $400 [$450 effective 7/1/20]. If the amount of the deposit that is to be made available on a particular day is less than $400 [$450 effective 7/1/20], then you only have to make the amount of the deposit available. If the deposit consists of more than one check, the maximum amount you have to make available is still only $400 [$450 effective 7/1/20]. Also, this rule does not supersede any rules your institution might have limiting the amount of cash withdrawals generally at ATMs or over the counter. Your limitations remain in effect as long as those limitations are not related to how long funds have been on deposit, and as long as the limitations on in-person withdrawals are applied to all customers of the bank and are related to security, bonding, or operating requirements. [12 CFR 229.19(c)(4)]