Reg CC - Nonproprietary ATM Deposits

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Question:

With the recent consolidation of the Federal Reserve Bank districts, basically eliminating the non-local check, how does this impact Reg CC with regard to the availability of deposits made at non-proprietary ATM machines? Can we still hold these deposits for five business days or do we have to reduce this to two days as well? Also, how does this impact the numbers of days we can hold deposits that fall under the exceptions?

Answer:

The elimination of nonlocal checks that will be complete in early 2010, should have no effect on the provision in section 229.12(f) that permits special treatment of cash or check deposits at non-proprietary ATMs. Such deposits would still have to be made available by the fifth business day following the banking day the deposit is received.

Exception holds for new accounts would not be affected by the change, either. Holds under sections 229.13(b)-(e), however, would be cut back so that funds would have to be available by the seventh business day following the banking day of receipt, unless a longer hold is warranted by specific circumstances and can be justified by the depositary bank (as permitted by the last sentence of section 229.13). The one exception to that seventh day requirement is, strangely enough, deposits at non-proprietary ATMs, which start at the fifth business day and to which six more days can be added, so that funds could be held until the eleventh business day.

Of course, this assumes that the Fed makes no other substantive changes to the regulation than have been previously discussed. The Fed can propose other amendments to the regulation to shorten the duration of holds, but it has not yet done so.

First published on BankersOnline.com 3/22/10