REG CC-Update

An amendment to the Expedited Funds Availability Act was signed into law on November 28, 1990 and was declared retroactive to September 1, 1990 regarding the availability schedule for deposits to non-proprietary ATMs.

The deposits into accounts through ATMs that do not belong to the financial institution where the account is held can now be considered non-local deposits. That means a five day hold on all deposits can be applied, if it is so stated in the disclosure.

If a financial institution is using an old disclosure that states that as of September 1, 1990, all deposits at non-proprietary ATMs will be considered local deposits....and the decision is made to take advantage of the change in the law...Fed has stated that 30 day advance notice will have to be given to customers before applying the longer hold. And the notice must also be in the initial disclosure.

The change from local two day hold to the non-local five day hold was welcomed by bankers nationwide. The possibility was very real for a customer to walk up to a teller's window, deposit a non-local check, and the computer would put an automatic five day hold on the deposit. But the customer could deposit the same non-local check in another institution's ATM for credit to his account at the account-holding institution, and have only a two day hold put on it. This amendment removes that possibility.

The good news is that the amendment and Fed rule is now reality. The bad news is that it will only be in place for two years, and then will have to be addressed all over again. Which means from September 1, 1990 through November 28, 1992 deposits of cash, "next-day" checks, local checks and non-local checks into a nonproprietary ATM may be held until the fifth business day following the banking day of deposit.

In other words, a deposit at a nonproprietary ATM on a Monday, including any deposit of cash or checks that would otherwise be subject to next-day (or second-day) availability, must be made available for withdrawal not later than Monday of the following week. (This rule does not apply to deposits made at proprietary [your own] ATMs.)

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 12, 12/90