REG CC: AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS Flashcards
In general, Regulation CC requires that funds from certain types of deposits be given next-day availability. List five of the eight types of deposits named in the regulation.
Cash deposits made at a staffed teller facility; electronic payments; U.S. Treasury checks; U.S. Postal money orders deposited at a staffed teller facility
into the account of the payee; Federal Reserve Bank and Federal Home Loan Bank checks deposited at a staffed teller facility in the account of the payee;
state and local government checks deposited in a credit union in the same state as the unit of government; cashier’s, certified, and teller’s checks deposited at a staffed teller facility into the account of the payee; on-us checks deposited at a branch of the depositary credit union if located in the same state or check processing region.
A notice that funds deposited to an account may not be immediately available must be posted at all ATMs where deposits can be made. What is the timing for
this notice and what are three ways the notice can be given?
The notice must be given before the deposit is made and can be 1) posted on a sign at the ATM, 2) be shown on the ATM screen, and 3) be printed on deposit envelopes provided at the ATM.
When must the funds from local checks be available for withdrawal?
Not later than the second business day following the day of deposit.
Does the fact that an ATM is considered nonproprietary make any difference to the availability of a funds deposited at that ATM?
All deposits at nonproprietary ATMs shall be available by the fifth business day after the banking day the deposit is made.
Regulation CC provides safeguard exception holds that can be applied to a member’s deposit. List three of them.
Large deposits; redeposited checks; repeated overdrafts; reasonable cause to doubt collectibility; emergency conditions; new accounts.
The hold on a deposit can be extended for accounts that are repeatedly overdrawn. Briefly describe the two tests provided by Regulation CC to determine
what constitutes “repeated overdrafts.”
Test one — the account or combination of accounts has had a negative balance (or would have had a negative balance if checks had been paid and not returned) on six or more banking days in the preceding six months.
Test two — the account had or might have had a negative balance of $5,525 or more on two or more banking days.
When invoking the reasonable cause exception, what is the additional statement that must be included in the notice sent to the member?
The reason the credit union believes the check is uncollectible.
When a new account is opened, when are you required to provide the Funds Ability Policy disclosure?
Prior to accepting the deposit to open the new account. If opened by mail, the disclosure must be mailed no later than the business day following the banking day the deposit was made.
If your credit union changes its funds availability policy, describe the timing of the required change in terms notice.
A change in terms notice must go out to members 30 days prior to the change unless that change results in faster availability of deposits. This change would
require the notice to be mailed within 30 days after the change takes effect.
If one of the safeguard exceptions holds is placed on a deposit, what information must be contained in the required notice?
The member’s account number; the date of the deposit; the deposit amount being held; the reason the exception was invoked.
If a credit union places a new account hold on a deposit, how long can the funds from local and nonlocal checks be held?
The length of the hold is up to the discretion of the credit union.
Your credit union truncates checks and does not return them to your members with their periodic statements. Because of this you are only required to send the Check 21 notice outlining their rights any time you provide a substitute check instead of an original.
_____ True _____False
True
Under Check 21, a substitute check must meet certain requirements. List four of those requirements.
Substitute checks must: 1) contain an image of the front and back of the original, 2) be suitable for automated processing the same as an original check, 3) have a MICR line with the information from the original check, 4) include the legend “This is a legal copy of your check. You can use it in the same way you would use the original check.”
