Solving Common Violations

Reg CC: Expedited Funds Availability

229.10(c): Funds availability, first $100

All front line staff must know and master this section. This is unavoidable.
Train on when and how the first $100 of a check deposit should be made available.
Common errors include making $100 from each check deposited available (only one will do), taking the first $100 from the cash portion of the deposit, and altogether forgetting to make this amount available.

229.12(b): Local checks

Give front-line deposit staff a cheat-sheet listing the local routing numbers.
Identify special checks that should be treated as local checks.
Include the number of days that a local or non-local check can be held without special exceptions.

229.12(c): Non-local checks

If they don't know what a local check is, they don't know what a non-local check is. Use training and the cheat-sheet.

229.13(b): Large Deposits.

More mistakes are made on this than almost any other type of hold. It simply has to be learned and practiced. Use examples.
Make the first $100 available under 229.10.
Make the next $4,900 available on the local or non-local schedule, as appropriate. Remind staff that they can choose which checks to put in this category.

229.13(g): Exception hold notice

The exception notice has to go to the customer. And it has to contain the reasons for the exception. No-one likes explaining why they don't trust the customer or the customer's deposit. But the regulation says you have to.

Practice filling out exception hold notices in training. Also practice calculating the correct number of days for the hold.

Discuss appropriate reasons to disclose.

Practice and give pop quizzes that require staff to work through these holds and also calculate days. For purposes of this quiz, "Send the check for collection" is cheating.

229.14(a): Payment of Interest

This one involves real dollars. The bank must pay interest on the full balance or the collected balance, whichever it discloses.

Check your disclosures to see what you said you would do.

Now check your operating system to see what you actually are doing. If you are doing something different than what you disclosed, fix it.

Remind operations not to change the system without notifying compliance.

Previously highlighted Common Violations:
Reg C- Solving Common Violations
Reg E: Electronic Funds Transfers
Reg H: Flood Hazard Insurance
Reg X: RESPA
Reg Z: Truth in Lending
Reg BB: Community Reinvestment Act
Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 6, 6/01