Rule Associated w/ Bank Float and Customer Float

Regulation CC requires that interest be paid on an account no later than the date on which the bank receives provisional credit based on either the Fed or correspondent availability schedules:Sec. 229.14 Payment of interest. (a) In general. A depositary bank shall begin to accrue interest or dividends on funds deposited in an interest-bearing account not later than the business day on which the depositary bank receives credit for the funds. For the purposes of this section, the depositary bank may-- (1) Rely on the availability schedule of its Federal Reserve Bank, Federal Home Loan Bank, or correspondent bank to determine the time credit is actually received; and (2) Accrue interest or dividends on funds deposited in interest- bearing accounts by checks that the depositary bank sends to paying banks or subsequent collecting banks for payment or collection based on the availability of funds the depositary bank receives from the paying or collecting banks.

First published on BankersOnline.com 1/9/12