Expedited Funds Avail Act

Question 1

. In addition to the specifics applied to new account and extended holds, there are other disclosure requirements specified by Regulation CC. On which type of deposit slip must a bank include a notice that deposits may not be available for immediate withdrawal?

A. On deposit slips that are not preprinted—such as counter deposit slips

B. On special deposit slips used to secure next-day availability for state and local government, cashier’s, certified, or teller’s checks

C. On deposit slips that are preprinted with the customer’s name and account number, ordered by the customer and furnished by the bank

D. On deposit slips that the customer may order from a private entity

Answer 1

The correct answer is C. A, B, and D are incorrect because the notice regarding availability is not required on these items.

Question 2

When must the funds availability disclosure for a new checking account be given to a customer who is opening his account in person at the branch?

A. It must be provided before opening a new account

B. It must be provided by the second business day following the day the account was opened

C. It must be provided within the first 5 days the account is opened

D. It must be provided with each deposit made in the first 30 days the account is opened

Answer 2

The correct answer is A. B, C, and D are incorrect because they do not offer the correct timing for providing disclosure to new accounts.

Question 3

Sam received a cashier’s check for $3,495.60 from his former bank. He does not have a checking account, so he asked his girlfriend, Janet, if she would deposit the cashier’s check today into her account at her bank. Sam believes that because cashier’s checks must be made available the next day, he will get his money tomorrow. Is Sam correct?

A. Yes, because cashier’s checks are always next-day items and the amount under $5,000 must be made available next day

B. Yes, because Janet’s account is in good standing at her bank, she has no overdrafts, and the bank has a case-by-case hold policy

C. No, because the check is for an odd amount and is therefore suspicious. Most cashier’s checks are for even amounts

D. No, because third party checks that are not deposited into the account of the named payee do not have to be treated as ‘‘next day’’ items

Answer 3

The correct answer is D. A, B, and C are incorrect because in order to be considered a next day item, the check must be payable to the customer and deposited into that customer’s account. The bank can decide to make an exception, but the law states that the item need not be considered a next day item and a hold may be placed when the check does not meet these requirements.

Question 4

Reg CC contains three important parts. Which rule describes an issue addressed by Reg CC?

A. Rules relating to the type of business entity that may qualify for a checking account

B. Rules regarding the duty of banks to make funds deposited into accounts available for withdrawal

C. Rules regarding the deposit of checks into savings accounts

D. Rules regarding the duty of banks to hold checks depending on the risk presented by the customer

Answer 4

The correct answer is B. A, C, and D are incorrect because they are not covered by Reg CC.

Question 5

Travis is depositing a local government check in the amount of $9,700. He wants to know when the funds will be available. What would you tell Travis?

A. Local government checks are not next-day items so the entire amount will be held for 7 days

B. You will have $5,000 available on the next business day and the remainder will be available in 7 business days

C. You will have $200 available tomorrow, $4,800 the next day, and the remainder will be available in 7 business days

D. Because this is a local government check, the bank cannot place a hold, so the entire amount will be available the next business day

Answer 5

The correct answer is B. A, C, and D are incorrect because when a next-day item exceeds $5,000, the bank may place a large dollar exception hold but must make $5,000 available the next business day—the $5,000 is inclusive of the $200.

Question 6

On Saturday, Ahmad deposited a check into his checking account. Saturday is not a banking day because the bank is closed for most of its functions; only a few branches are open as a customer service for basic transactions. The teller informed Ahmad that funds for the check would not be available for two business days. On which day will the funds be available?

A. Monday following the Saturday he made the deposit

B. Tuesday following the Saturday he made the deposit

C. Wednesday following the Saturday he made the deposit

D. Thursday following the Saturday he made the deposit

Answer 6

The correct answer is C. The count for Ahmad’s deposit would be as follows: Saturday is not a banking day by the Regulation CC definition, so Ahmad’s deposit would be considered a Monday deposit; Tuesday would be day one; Wednesday would be day two. A is incorrect because it is considered the day of deposit. B is incorrect because Tuesday would only be one day. D is incorrect because Thursday would extend the hold period one day beyond what is allowed by the second day availability schedule.

Question 7

Loretta is new to your area. She is using checks from her current bank to open a new checking account at your bank. You explain that the bank will place a hold on the checks she is depositing and you provide her with a funds availability disclosure. Which statement is true regarding Loretta’s checking account?

A. Her checking account is considered a new account during the first 30 business days after the account has been established

B. Her checking account is considered a new account during the first 30 banking days after the account has been established

C. Her checking account is considered a new account the first business day of the following calendar month after the account has been established

D. Her checking account is considered a new account during the first 30 calendar days after the account has been established

Answer 7

The correct answer is D. A, B, and C are incorrect because Regulation CC specifically describes a new account as an account that has been opened 30 or less calendar days from the date it was established.

Question 8

Which one of these items being deposited into a checking account is considered a second business day availability item?

A. A cashier’s check from a relative for $250

B. A check drawn on an account holder’s own business account at your bank and made payable to himself

C. A U.S. Postal Money Order for $100 for a 30th birthday present

D. A local check for $450 from a garage sale last weekend for the sale of an antique chest

Answer 8

The correct answer is D. A, B, and C are incorrect because each of these items is considered a next day availability item. Remember that even though the neighbor’s check from the garage sale is considered a second day availability item, $200 of the $450 check should be made available the next business day.

Question 9

Regulation CC states when deposits of various types must be made available to your customers. A bank that has a policy of generally making deposited funds available for withdrawal sooner than required is considered to have ____________________.

A. An exception hold policy

B. A case-by-case hold policy

C. A next-day hold policy

D. A non-statutory hold policy

Answer 9

The correct answer is B. A, C, and D are incorrect because this type of policy is referred to as a case-by-case hold policy.

Question 10

In order to comply with Regulation CC, Northwest Bank must post notices specifically stating the availability periods for various types of deposits that may be made to consumer accounts. The notices must be posted at which location at Northwest Bank?

A. In a place where consumers seeking to make deposits are likely to see it

B. At each teller window

C. At the night depository location

D. At drive-thru teller windows

Answer 10

The correct answer is A. B, C, and D are incorrect because Northwest Bank must post the notice in a conspicuous place in each location where its employees receive deposits to consumer accounts. The notice need not be posted at each teller window, but it must be posted in a place where consumers seeking to make deposits are likely to see it before making their deposits. The notice is not required at drive-thru teller windows or at night depository locations

Question 11

11. Jaime has a cashier’s check in his possession drawn on National Bank. National Bank was chartered in 1965 and has several branches in Jaime’s hometown. Jaime wants to deposit the check into his Local Bank checking account, which has an average balance of $500. Which option accurately lists the two factors that determine the hold time for the check according to Regulation CC?

A. The average balance of the total amount of funds the customer has on deposit with the financial institution; the geographic location of the bank of first deposit and the paying bank

B. The geographic location of the bank of first deposit and the paying bank; the type of check being deposited

C. The type of check being deposited; whether the check is being deposited into an account of the named payee

D. The year the financial institution was chartered; the average balance of the total amount of funds the customer has on deposit with the financial institution

Answer 11

The correct answer is C. A is incorrect because while the average balance may help those banks that place case-by-case holds, EFAA does not include balances as part of the criteria for when funds are to be made available. B is incorrect because the geographic location of the bank is not a factor in determining the amount of time a check will be held. D is incorrect because the year the financial institution was chartered has nothing to do with EFAA schedules and while the average balance may help those banks that place case-by-case holds, EFAA does not include balances as part of the criteria for when funds are to be made available.

Question 12

In compliance with Regulation CC, a financial institution has extended a deposit hold in only certain eligible situations. Which situation would allow the bank to place an exception hold under Reg CC?

A. A customer depositing several checks that together total more than $4,000

B. Notification from the paying bank that a check is being paid

C. A severe flood that causes loss of power and closes the bank

D. A customer has been overdrawn two times in the past six months

Answer 12

The correct answer is C. A is incorrect because the deposit of multiple checks totaling more than $4,000 would not permit the bank to impose an exception hold. B is incorrect because the bank may place an extended hold if it receives notice that a deposited item may not be paid. D is incorrect because a repeat overdraft is defined as a customer’s account being overdrawn or having insufficient checks presented on six or more occasions within the last six months or, on two or more banking days within the last six months, the account balance was negative—or would have been negative—had insufficient checks been paid in an amount of $5,000 or more.

Question 13

A teller processing a customer’s deposit directed him to endorse the check. The teller pointed to the location on the back of the check where the client was to sign. What is the primary reason Regulation CC specifies where the various endorsements must be placed?

A. It was one way of reminding bank personnel which endorsements were necessary before a check could be paid

B. It reduced the possibility of late returns due to overlapping endorsements which were difficult to read

C. It was because customers could never remember which end of the check to endorse

D. It created specific dimensions for the size of personal and business checks

Answer 13

The correct answer is B. A is incorrect because the verbiage was not designed to assist bank personnel. C is incorrect because while consistency was achieved, the purpose of the standardization was not just to create a consistent placement format. D is incorrect because there are standards in place for check sizes but they do not come from EFAA.

Question 14

Joan makes a deposit to her checking account and is informed that the bank must put a two day hold on the deposited funds. Which option best defines second business day availability?

A. Funds will be available no later than the second day after the deposit is made

B. Funds will be available no later than the second business day after the banking day of deposit

C. Funds will be available no later than the second banking day after the business day of deposit

D. Funds will be available no later than the second calendar day after the deposit is made

Answer 14

The correct answer is B. A and D are incorrect because they do not differentiate business or banking days. C is incorrect because Regulation CC specifically defines business days and banking days.

Question 15

Dorothy is opening a new account with your bank online. To fund the account, Dorothy is authorizing your bank to obtain the account opening deposit from her money market account at her former bank. When will the new funds on the new account be available for withdrawal?

A. Immediately because it is an electronic deposit

B. In nine business days because it is a new account

C. The bank must apply NACHA rules, because debit transfers are not subject to Reg CC

D. When the bank receives finally collected funds

Answer 15

The correct answer is C. A, B, and D are incorrect because NACHA rules apply. Debit transfers are not subject to Reg CC.

Question 16

You are discussing the changes brought about by Check 21 with a new customer. The customer has read your brochure and made four statements she believes to be true about Check 21. Which statement is correct?

A. Images and data are captured and stored at the Federal Reserve

B. The paying bank must deliver images to its customers using E-SIGN

C. Checks can only be physically transported between banks

D. The paper check is destroyed

Answer 16

The correct answer is D. A, B, and C are incorrect because they do not describe changes brought about by Check 21

Question 17

Suzanne Tyson is a customer. She believes a substitute check was paid twice. How long does she have to make a claim with the bank?

A. 90 days

B. 60 days

C. 40 days

D. 7 days

Answer 17

The correct answer is C. A, B, and D are incorrect because a customer generally has 40 days to make a claim. Extenuating circumstances, such as illness, can lengthen the time.

Question 18

If the bank changes its availability policy which will delay the availability of funds, it must notify all consumer account holders. When must the account holders be notified?

A. 45 days before implementing the policy change

B. 30 days before implementing the policy change

C. 90 days before implementing the policy change

D. 60 days before implementing the policy change

Answer 18

The correct answer is B. A, C, and D are incorrect because while banks may decide to share the change notification earlier, Regulation CC only requires a 30-day notice. If the bank changes its availability policy, it must notify all holders of consumer accounts at least 30 days before implementing the policy change unless the change expedites the availability of funds, in which case notice may be given within 30 days after the change.

Question 19

For which of the following deposits is a bank NOT required to give next day availability?

A. A deposit of seven $100 bills

B. A deposit of a Social Security check by mail

C. A deposit of a Social Security payment

D. The deposit of a cashier’s check at an ATM

Answer 19

The correct answer is d. 12 CFR 229.10(c)(1)(v)
Regulation CC
Outline II A(3)
This type of deposit must be made in person to a bank employee to be eligible for next-day availability.

Question 20

First National has an account for Mary Jones, who has had several overdrafts in her account over the past few months. On February 15, she overdrew her account and had a negative balance, which lasted for 10 days. As of March 14, the number of negative days in the statement cycle was three; and as of April 14, the number of days was six. The last overdraft occurred on May 14, and the account was overdrawn for three days. Mary has not been overdrawn since May. First National has extended the holds placed on all deposits to her account. How long can the bank continue to subject her account to extended hold periods?

A. Until May 14

B. Until October 14

C. Until July 14

D. Until April 14 of the next year

Answer 20

Incorrect. The correct answer is b. 12 CFR 229.13(d)
Regulation CC
Outline III E(4)
The bank can apply the extended hold because the depositor has been overdrawn for at least six days during the preceding six months. The six days is a running total. Basically, from any day in the year the bank should count back six months to determine if the number of overdrafts within that time period equals six or more. In this situation the six months begins to run from the April 14 date (the last date as of which the account has actually been overdrawn for six days). If Mary’s account has no more overdrafts, by October 14 it will no longer meet the criterion of having been overdrawn for six days during the previous six months—so the hold will have to be lifted.

Question 21

. A customer deposits a $7,000 local check and a $12,000 U.S. Treasury check in the bank on Monday. The bank’s policy is that it generally makes funds from checks available on the next business day, although it does place exception holds. When does the bank have to make these funds available?

A. $5,000 is available on Tuesday; the rest is available within a reasonable time period

B. $500 is available on Tuesday; $4,500 is available on Wednesday; and the remaining is available within a reasonable time period

C. $5,200 is available on Tuesday; $4,800 is available on Wednesday; and the remaining is available within a reasonable time period

D. $12,200 is available on Tuesday and $6,800 is available on Wednesday

Answer 21

The correct answer is a. 12 CFR 229.13(b) and 229.10(c)
Regulation CC
Outline III E(2)
The aggregate deposit is subject to the large deposit exception. The next day availability requirement for Treasury checks is not applicable to the entirety of a large deposit. Only $5,000 of the Treasury check must be made available on the next business day. In the case of a large deposit exception, the $200 does not have to be made available, so only $5,000 is required to be made available on the next business day. The remainder of the deposit can be made available within a reasonable period of time.

Question 22

On which of the following deposits is a bank NOT required to give next day availability?

A. A cashier’s check deposited at a proprietary ATM

B. A Social Security check received through the mail to be deposited in the payee’s account

C. U.S. Postal Service money orders deposited in person to the payee’s account

D. Cash, where the deposit was made in person to a teller at the depository bank

Answer 22

The correct answer is a. 12 CFR 229.10(c)(v)
Outline II A(3)
Cashier’s checks must be deposited in person to get next day availability.

Question 23

What is the required timing for giving notice to customers regarding a change to a bank’s Regulation CC funds availability policy that improves or expedites availability?

A. At least 15 days prior to implementation

B. At least 30 days prior to implementation

C. No later than 15 days after implementation

D. No later than 30 days after implementation

Answer 23

The correct answer is d. 12 CFR 229.18(e)

Outline V D(6)

Question 24

A senior officer of a bank is considering breaking with tradition and opening the main office for general banking business on Saturdays. Before making the final decision, he requests your input. Which of the following describes the Regulation CC implications of his proposal?

A. Saturday is not a ‘‘business day’’ under the regulation, and the funds availability schedule will not be affected.

B. Funds availability disclosures and lobby notices will have to be revised for all branches.

C. An extra day of interest on Saturday deposits will have to be paid.

D. Being open on Saturday will shorten hold periods and increase exposure to operating losses.

Answer 24

The correct answer is a. 12 CFR 229.2(g)

Outline I B

Question 25

The manager of teller operations contacts the compliance manager about a high level of exceptions noted on hold notices during recent compliance monitoring. Which of the following recommendations is MOST appropriate for the compliance manager to make?

A. Require an officer’s review and signature on all hold notices.

B. Support the purchase of a new teller computer system to automate hold notices.

C. Increase the frequency and volume of compliance monitoring to better determine the weak areas.

D. Arrange remedial training on hold notice requirements for tellers where the exceptions were noted.

Answer 25

The correct answer is d. While the other alternatives are appropriate also, the first action should be to retrain the tellers where the exceptions were noted. Training will help immediately correct the problem. The other actions would have an effect in the long term.

Question 26

Which of the following accounts is considered to be a new account for delayed funds availability purposes?

A. A new account opened by an established customer who has had several transaction accounts with the bank for a long time

B. A new account opened by a customer who previously had an account but closed it 15 days before opening the new one

C. A new account opened by a customer who has had a regular savings account at the bank for five years

D. A new account opened by a customer who is a joint account holder on another checking account at the bank but who has no other individual account

Answer 26

. The correct answer is c. 12 CFR 229.13(a) and 229.2(a)
Regulation CC
Outline I and III E(1)
A savings account is not a transaction account and therefore is not an account according to the definition given in Regulation CC. Therefore, the customer has not had an account at the bank at the time the new account was opened, so the new account exception applies.

Question 27

For which of the following deposits is a bank required to give next-day availability (assume that all checks are deposited into the account of the payee)?

A. A deposit of pesos

B. A deposit of a Social Security check by mail

C. A deposit of a U.S. Postal Money Order by mail

D. The deposit of a cashier’s check through the night deposit box

Answer 27

The correct answer is b. 12 CFR 229.10(c)(1)(i)
Regulation CC
Outline II A(3)
This type of deposit does not need to be made in person to a bank employee to be eligible for next-day availability.

Question 28

A $7,000 check is presented to First National Bank, as the paying bank on Monday. First National is going to return the check to the depositary bank.
Generally, First National mails return checks to the Federal Reserve Bank and mails its forward collection checks as well to avoid the costs of a courier. Other banks in the community send both return and forward collection checks to the Federal Reserve Bank by courier if the checks are over $5,000. Can First National follow its usual procedure in this case?

A. Yes. Provided the bank is consistent in its method of return, it does not have to use the most expeditious method.

B. Yes. Provided the bank uses the mail for forward collection, it can use the mail for returns.

C. No. The bank must use the method used by banks in similar circumstances.

D. No. The bank is required to use an expeditious method of return such that the depositary bank normally would receive the returned check by 2 p.m. (local time of the depositary bank)

Answer 28

The correct answer is d. 12 CFR 229.31(b)(1)
Regulation CC
Outline X A(2)
The bank is required to use an expeditious method of return in order to ensure that the depositary bank would normally receive the returned check by 2 p.m. (local time of the depositary bank).
Using the method used by a similarly situated bank is no longer considered an expeditious method as of 7/1/18.

Question 29

The following deposits were made on Monday at First National Bank:
• Martha Smith, a new customer, deposited $150 in checks into her checking account, which she had opened the previous week
• Jerry Williams, an established customer, deposited a $7,000 check from his father
• Amanda Thomas, also an established customer, deposited her $600 IRS refund into her account
What funds must be made available to these depositors on Tuesday?

A. $200 for each

B. $200 for Martha and Jerry; $600 for Amanda

C. $200 for Jerry; $600 for Amanda

D. $200 for Martha; $600 for Amanda

Answer 29

The correct answer is c. 12 CFR 229.10(c)(1)(i) and 229.13(a) and (b)
Regulation CC
Outline III A, B, and E
Jerry’s deposit is a check that does not have to be available the next day, with the exception of $200. Because Amanda’s check is on the U.S. Treasury, her entire deposit is available the next day. Martha’s account is a new account; therefore, none of her deposit is required to be made available on the next business day.

Question 30

First National’s funds availability policy states that funds from checks are generally available for withdrawal on the next business day following the day of deposit. The policy also states that longer holds may be required on a case-by-case basis and advises customers to ask if they need to be sure of the availability of a specific deposit. Henry Cranston deposited a check into his account on Monday. Henry needed to use the funds on Tuesday but he did not ask about the availability at the time of the deposit. A bank teller accepted the deposit and gave Henry a receipt. After Henry left the bank, the teller’s supervisor noticed the check and decided that a longer hold needed to be placed and the funds would not be available until Wednesday . Which of the following actions must the bank perform?

A. The bank must make the funds available on Tuesday, because Henry was not notified at the time of the deposit.

B. The bank may hold the funds for a longer time period but must send Henry a hold notice.

C. The bank may hold the funds for a longer time period and need not notify Henry because he did not ask about the availability of the deposit.

D. The bank may hold the funds for a longer time period and may, at its option, send Henry a notice of the delay.

Answer 30

The correct answer is b. 12 CFR 229.16(c)(2)
Regulation CC
Outline V C
The bank must send Henry a hold notice even if it is sent after the deposit is made. Notice must be sent no later than the first banking day following the day of the deposit.

Question 31

Which of the following accounts is considered to be a new account for delayed funds availability purposes?

A. A new account opened by an established customer who has had several transaction accounts with the bank for a long time

B. A new account opened by a customer who previously had an account but closed it 15 days before opening the new one

C. A new account opened by a customer who has had a regular savings account at the bank for five years

D. A new account opened by a customer who is a joint account holder on another checking account at the bank but who has no other individual account

Answer 31

The correct answer is c. 12 CFR 229.13(a) and 229.2(a)
Regulation CC - Outline I and III E(1)
A savings account is not a transaction account and therefore is not an account according to the definition given in Regulation CC. Therefore, the customer has not had an account at the bank at the time the new account was opened, so the new account exception applies.

Question 32

First National has an account for Mary Jones, who has had several overdrafts in her account over the past few months. On February 15, she overdrew her account and had a negative balance, which lasted for 10 days. As of March 14, the number of negative days in the statement cycle was three; and as of April 14, the number of days was six. The last overdraft occurred on May 14, and the account was overdrawn for three days. Mary has not been overdrawn since May. First National has extended the holds placed on all deposits to her account. How long can the bank continue to subject her account to extended hold periods?

A. Until May 14

B. Until October 14

C. Until July 14

D. Until April 14 of the next year

Answer 32

The correct answer is b. 12 CFR 229.13(d)
Regulation CC
Outline III E(4) - The bank can apply the extended hold because the depositor has been overdrawn for at least six days during the preceding six months. The six days is a running total. Basically, from any day in the year the bank should count back six months to determine if the number of overdrafts within that time period equals six or more. In this situation the six months begins to run from the April 14 date (the last date as of which the account has actually been overdrawn for six days). If Mary’s account has no more overdrafts, by October 14 it will no longer meet the criterion of having been overdrawn for six days during the previous six months—so the hold will have to be lifted.

Question 33

The following deposits were made on Monday at First National Bank:
• Martha Smith, a new customer, deposited $150 in checks into her checking account, which she had opened the previous week
• Jerry Williams, an established customer, deposited a $7,000 check from his father
• Amanda Thomas, also an established customer, deposited her $600 IRS refund into her account
What funds must be made available to these depositors on Tuesday?

A. $200 for each

B. $200 for Martha and Jerry; $600 for Amanda

C. $200 for Jerry; $600 for Amanda

D. $200 for Martha; $600 for Amanda

Answer 33

The correct answer is c. 12 CFR 229.10(c)(1)(i) and 229.13(a) and (b)
Regulation CC
Outline III A, B, and E
Jerry’s deposit is a check that does not have to be available the next day, with the exception of $200. Because Amanda’s check is on the U.S. Treasury, her entire deposit is available the next day. Martha’s account is a new account; therefore, none of her deposit is required to be made available on the next business day.

Question 34

For which of the following deposits is a bank required to give next-day availability (assume that all checks are deposited into the account of the payee)?

A. A deposit of pesos

B. A deposit of a Social Security check by mail

C. A deposit of a U.S. Postal Money Order by mail

D. The deposit of a cashier’s check through the night deposit box

Answer 34

The correct answer is b. 12 CFR 229.10(c)(1)(i)
Regulation CC
Outline II A(3)
This type of deposit does not need to be made in person to a bank employee to be eligible for next-day availability.

Question 35

First National’s funds availability policy states that funds from checks are generally available for withdrawal on the next business day following the day of deposit. The policy also states that longer holds may be required on a case-by-case basis and advises customers to ask if they need to be sure of the availability of a specific deposit. Henry Cranston deposited a check into his account on Monday. Henry needed to use the funds on Tuesday but he did not ask about the availability at the time of the deposit. A bank teller accepted the deposit and gave Henry a receipt. After Henry left the bank, the teller’s supervisor noticed the check and decided that a longer hold needed to be placed and the funds would not be available until Wednesday . Which of the following actions must the bank perform?

A. The bank must make the funds available on Tuesday, because Henry was not notified at the time of the deposit.

B. The bank may hold the funds for a longer time period but must send Henry a hold notice.

C. The bank may hold the funds for a longer time period and need not notify Henry because he did not ask about the availability of the deposit.

D. The bank may hold the funds for a longer time period and may, at its option, send Henry a notice of the delay.

Answer 35

The correct answer is b. 12 CFR 229.16(c)(2)
Regulation CC - Outline V C - bank must send Henry a hold notice even if it is sent after the deposit is made. Notice must be sent no later than the first banking day following the day of the deposit.

Question 36

A senior officer of a bank is considering breaking with tradition and opening the main office for general banking business on Saturdays. Before making the final decision, he requests your input. Which of the following describes the Regulation CC implications of his proposal?

A. Saturday is not a ‘‘business day’’ under the regulation, and the funds availability schedule will not be affected.

B. Funds availability disclosures and lobby notices will have to be revised for all branches.

C. An extra day of interest on Saturday deposits will have to be paid.

D. Being open on Saturday will shorten hold periods and increase exposure to operating losses.

Answer 36

The correct answer is a. 12 CFR 229.2(g)

Outline I B

Question 37

For which of the following deposits is a bank NOT required to give next day availability?

A. A deposit of seven $100 bills

B. A deposit of a Social Security check by mail

C. A deposit of a Social Security payment

D. The deposit of a cashier’s check at an ATM

Answer 37

The correct answer is d. 12 CFR 229.10(c)(1)(v)
Regulation CC
Outline II A(3) - This type of deposit must be made in person to a bank employee to be eligible for next-day availability.

Question 38

A customer deposits a $7,000 local check and a $12,000 U.S. Treasury check in the bank on Monday. The bank’s policy is that it generally makes funds from checks available on the next business day, although it does place exception holds. When does the bank have to make these funds available?

A. $5,000 is available on Tuesday; the rest is available within a reasonable time period

B. $500 is available on Tuesday; $4,500 is available on Wednesday; and the remaining is available within a reasonable time period

C. $5,200 is available on Tuesday; $4,800 is available on Wednesday; and the remaining is available within a reasonable time period

D. $12,200 is available on Tuesday and $6,800 is available on Wednesday

Answer 38

The correct answer is a. 12 CFR 229.13(b) and 229.10(c)
Regulation CC
Outline III E(2) - The aggregate deposit is subject to the large deposit exception. The next day availability requirement for Treasury checks is not applicable to the entirety of a large deposit. Only $5,000 of the Treasury check must be made available on the next business day. In the case of a large deposit exception, the $200 does not have to be made available, so only $5,000 is required to be made available on the next business day. The remainder of the deposit can be made available within a reasonable period of time.

Question 39

On which of the following deposits is a bank NOT required to give next day availability?

A. A cashier’s check deposited at a proprietary ATM

B. A Social Security check received through the mail to be deposited in the payee’s account

C. U.S. Postal Service money orders deposited in person to the payee’s account

D. Cash, where the deposit was made in person to a teller at the depository bank

Answer 39

The correct answer is a. 12 CFR 229.10(c)(v)
Outline II A(3)
Cashier’s checks must be deposited in person to get next day availability.

Question 40

A $7,000 check is presented to First National Bank, as the paying bank on Monday. First National is going to return the check to the depositary bank.
Generally, First National mails return checks to the Federal Reserve Bank and mails its forward collection checks as well to avoid the costs of a courier. Other banks in the community send both return and forward collection checks to the Federal Reserve Bank by courier if the checks are over $5,000. Can First National follow its usual procedure in this case?

A. Yes. Provided the bank is consistent in its method of return, it does not have to use the most expeditious method.

B. Yes. Provided the bank uses the mail for forward collection, it can use the mail for returns.

C. No. The bank must use the method used by banks in similar circumstances.

D. No. The bank is required to use an expeditious method of return such that the depositary bank normally would receive the returned check by 2 p.m. (local time of the depositary bank)

Answer 40

. The correct answer is d. 12 CFR 229.31(b)(1)
Regulation CC
Outline X A(2) - The bank is required to use an expeditious method of return in order to ensure that the depositary bank would normally receive the returned check by 2 p.m. (local time of the depositary bank).
Using the method used by a similarly situated bank is no longer considered an expeditious method as of 7/1/18.

Question 41

The manager of teller operations contacts the compliance manager about a high level of exceptions noted on hold notices during recent compliance monitoring. Which of the following recommendations is MOST appropriate for the compliance manager to make?

A. Require an officer’s review and signature on all hold notices.

B. Support the purchase of a new teller computer system to automate hold notices.

C. Increase the frequency and volume of compliance monitoring to better determine the weak areas.

D. Arrange remedial training on hold notice requirements for tellers where the exceptions were noted.

Answer 41

The correct answer is d. While the other alternatives are appropriate also, the first action should be to retrain the tellers where the exceptions were noted. Training will help immediately correct the problem. The other actions would have an effect in the long term.

Question 42

What is the required timing for giving notice to customers regarding a change to a bank’s Regulation CC funds availability policy that improves or expedites availability?

A. At least 15 days prior to implementation

B. At least 30 days prior to implementation

C. No later than 15 days after implementation

D. No later than 30 days after implementation

Answer 42

The correct answer is d. 12 CFR 229.18(e)

Outline V D(6)