Introduction: Reg CC: Ongoing Responsibilities Toward the Account Holder (Funds Availability)

This section deals with your responsibilities under Regulation C (the funds availability regulation) toward the account holder after account opening. Part I of this manual deals with your responsibilities at account opening. Part II deals with other ongoing responsibilities that are not directly for the benefit of your account holder, namely, return check rules and indorsement standards. Part II also deals with how Regulation CC interacts with state funds availability laws.

Please be aware that, throughout this section, when we use the word “account,” we are using it as it is defined by Regulation CC. The Regulation CC definition of “account” limits the term to transaction accounts, or accounts against which the depositor can write an unlimited number of checks or make other third-party transfers. [12 CFR 229.2(a)] Savings accounts, time deposits, and even money market deposit accounts (MMDAs) are not transaction accounts and are not, therefore, “accounts” for purposes of Regulation CC.

We also use the word “bank” in the generic sense, as used by Regulation CC, to refer to commercial banks, savings institutions, and credit unions. [12 CFR 229.2(e)]

Regulation CC imposes a variety of duties on banks after an account has been opened. Perhaps the most important is the requirement that you make the customer’s deposits available for withdrawal and for the payment of checks within specified time frames.

The Availability Time Limitations section reviews those time frames after first establishing some ground rules and definitions necessary to understanding the time frames.

The Section 13. The Safeguard Exception section reviews the “safeguard exceptions.” These are situations where you are allowed to delay the availability of a deposit beyond the usual time frames. After that, we will review the “case-by-case exception” authority. Banks with availability policies that are shorter than the mandatory time frames may, on a case-by-case basis, extend availability up to the mandatory time frame. We will look at the conditions a bank must meet to have this authority.

The Regulation CC Exercises section includes some exercises you can use to test your knowledge of the availability time frames the section has described so far.

The Holds on Other Funds section explores a bank’s authority to put a hold on funds other than those just deposited if the bank gives immediate availability on the deposited funds. T

The Additional Disclosure Requirements section reviews some disclosure requirements that apply after the opening of an account.

The Section 14. Interest-Payment Policy looks at the rules requiring a bank to promptly begin the accrual of interest on a deposit to an interest-bearing account.

The Employee Training section looks at Regulation CC’s requirements in the area of employee training.

The Special Allowance for Institutions Recently Merged section reviews the special allowance for institutions that have recently merged.

The Record Retention section lists your obligations to retain records that establish your compliance with Regulation CC.

This section is particularly important since it contains the details on requirements that institutions most frequently violate. Historically, the four requirements that caused the most compliance problems are: