Funds availability – local government checks

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Question:

Our bank is in New Hampshire, near the Massachusetts border. We have several depositors who work for the City of Haverhill (MA) who deposit their municipal paychecks in our bank. Are these checks “checks drawn by a unit of general local government” that we must recognize as next-day availability checks?

Answer:

Regulation CC doesn’t require it, because the checks are not being deposited in a bank in the same state as the unit of general local government. Many banks near state borders have elected to provide next-day treatment in similar situations, but not because the regulation says so. They do it for competitive and good-will reasons. Note, however, if the deposits are made in a branch of your bank located in Massachusetts, the checks would be next-day checks under the regulation.
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