Expedited Funds Availability Act & Reg CC

Question 1

T or F: The primary purpose of the Expedited Funds Availability Act (EFAA) and Reg CC is to require depositary financial institutions to expedite the availability of funds to depositors from their deposited checks?

Answer 1

True

Question 2

The congressional rationale to enact the EFAA is that most checks get?

Answer 2

Paid

Question 3

The 4 major requirements of the EFAA and Reg CC for a credit union are:

Answer 3

1. Disclosing funds availability policies
2. Adhering to funds availability hold periods
3. Endorsing the checks in designated areas in black ink
4. Expediting the return of unpaid checks to the depositary financial institution.

Question 4

T or F: When one of the exception holds is placed on a deposit, the credit union’s hold notice must contain the current account balance with the held amount deducted?

Answer 4

False

Question 5

What three things must the reg cc hold notice state?

Answer 5

1. Deposit date
2. Amount held
3. Reason for the hold

Question 6

One test for the ‘repeated overdrafts’ exception is having a negative balance on six or more banking days in the last six months?

Answer 6

True

Question 7

T or F: When a credit union uses an exception hold on a deposit, the member must be notified of this hold?

Answer 7

True

Question 8

T or F: An on-us check must be given next-day availability unless it is deposited at a non-proprietary ATM?

Answer 8

True

Question 9

What is the general funds availability rule for checks deposited in non-proprietary ATMs?

Answer 9

5 business days

Question 10

T or F: Generally, a credit union can place holds on checks deposited into new accounts for a period of time up to the credit union’s discretion?

Answer 10

True

Question 11

T or F: Financial institutions are required by law to take checks for deposit that are drawn on other financial institutions?

Answer 11

FALSE

Question 12

CUs are required to provide their funds availability policy prior to opening an account, and those disclosures must be:

Answer 12

1. Given in a clear and conspicuous manner
2. In writing
3. In a form the member can keep
4. must describe the CUs specific policy on the availability of all deposited funds
   Note: These 4 requirements apply to Reg E, TISA, and Privacy disclosures as well, whether in paper or electronic format.

Question 13

Reg CC requires CUs to post their funds availability policy or provide a notice regarding their policy at proprietary ATMs they own or operate. This notice may be printed on the receipt the member receives AFTER the deposit?

Answer 13

False

Question 14

Why did the EFAA & Reg CC change the endorsement standards for all depositary and collecting financial institutions?

Answer 14

To identify the depositary institution that took the check for deposit.

Question 15

Why did the EFAA & Reg CC change the check return requirements for all payor-drawee financial institutions?

Answer 15

Because the time period a depositary institution may hold funds was limited, so they must get the check back quickly.

Question 16

T or F: The only notice your credit union must give to a member under Check 21 is when a deposited check is returned to your credit union as a substitute check?

Answer 16

True

Question 17

When a new account is opened by mail, the initial funds availability disclosures must be mailed to the member within 1 day after the account is opened?

Answer 17

True

Question 18

All owners of joint accounts must be given the account opening disclosures?

Answer 18

False, all disclosures just need to be provided to one account owner.

Question 19

Under Check 21, a substitute check can be generated/created by a financial institution in any size?

Answer 19

False