On July 1, 2020, changes to Regulation CC will go into effect that will require more funds to be made available to customers when certain holds are placed. The Consumer Financial Protection Bureau and the Federal Reserve Board jointly made an amendment to Regulation CC on June 24, 2019, to increase funds availability to compensate for inflation. These amounts will continue to be adjusted for inflation every five years using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and rounded to the nearest multiple of $25.
The July 1 changes to availability include:
- 229.10(c) – The minimum next-day availability will increase from $200 to $225.
- 229.12(d) – The cash withdrawal availability will increase from $400 to $450.
- 229.13(a) – The first $5,000 of funds availability for new account exception holds will increase from $5,000 to $5,525.
- 229.13(b) – The first $5,000 of funds availability for large deposit exception holds will increase from $5,000 to $5,525.
- 229.13(d)(2) –The $5,000 threshold for determining a repeat overdraft will increase from $5,000 to $5,525.
- 229.21(a) – The civil liability will increase from a range of $100 - $1,000 to a range of $100 - $1,100 in the case of individual action. The bank’s liability in the case of a class action will increase from $500,000 to $552,500.
Financial institutions should revise their Expedited Funds Availability disclosures and policies and procedures at least by the effective date of July 1, 2020, as well as inform customers of these upcoming changes not later than 30 days after implementation on July 1. Per the commentary in the final rule, a written change-in-terms notice is required to be sent to customers, but the notice can be included on account statements (and e-statements, as applicable). Also, remember Regulation CC applies to all transaction accounts (e.g. checking, NOW), not simply consumer accounts. If your bank decides to send out the updated Expedited Funds Availability disclosure to satisfy the change-in-terms notice requirement, remember that the commentary to Regulation CC requires that the specific changes be highlighted in some manner to bring attention to the changes themselves. Lastly, training should be provided to applicable staff before the effective date of the changes.
To access the Regulation CC final rule, use the following link: