Banking and Finance Law Daily Funds availability adjustments finalized
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Tuesday, June 25, 2019

Funds availability adjustments finalized

By Nicole D. Prysby, J.D.

The final rule adjusts for inflation the funds that must be available as required by the EFA Act and Regulation CC.

On June 24, 2019, the Consumer Financial Protection Bureau and the Federal Reserve Board announced that they jointly published a final ruleamending Regulation CC—Availability of Funds and Collection of Checks and the Expedited Funds Availability Act. The amendments implement a statutory requirement in the EFA Act to adjust the dollar amounts for inflation. The amendments apply in circumstances ranging from next business day withdrawal of check deposits to setting the threshold amount for determining whether an account has been repeatedly withdrawn. The agencies are also amending Regulation CC to incorporate the Economic Growth, Regulatory Relief, and Consumer Protection Act amendments to the EFA Act.

The EFA Act and subpart B of Regulation CC contain specified dollar amounts, such as the minimum amount of deposited funds that banks must make available for withdrawal by opening of business on the next day for certain check deposits. The Dodd-Frank Act added a section to the EFA Act, which provides that the dollar amounts under the EFA Act shall be adjusted every five years after Dec. 31, 2011, by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

As previously reported (see Banking and Finance Law Daily, Nov. 20, 2018), the agencies published proposed amendments in late 2018. In response to commenters concerned about the amount of time for compliance with the changes to the dollar thresholds, the provisions will not be effective until July 1, 2020, allowing one year for compliance. The EFA Act does not specify which month’s CPI-W should be used to measure inflation; the agencies have selected July and will use July 2011-July 2018 as the initial inflation measurement period. If the aggregate percentage increase in the CPI-W is zero or negative, the dollar amounts in Regulation CC will remain unchanged. In response to comments regarding the expense of informing consumers of the change in an institution’s funds-availability policy, the agencies suggested that the required notice be provided electronically or sent with the monthly account statement. The CFPB estimates compliance costs of $2,241 every five years to update notices sent to customers.

The amendments also modify Regulation CC to implement the EGRRCPA amendments to the EFA Act that extended its application to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam.

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