Rule2024-10844
Availability of Funds and Collection of Checks
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 20, 2024
Effective
July 1, 2025
Issuing agencies
Federal Reserve System
Abstract
The Board and the CFPB (collectively, the Agencies) are amending Regulation CC, which implements the Expedited Funds Availability Act (EFA Act) and the Check Clearing for the 21st Century Act (Check 21 Act), to fulfill a statutory requirement in the EFA Act to adjust the dollar amounts under the EFA Act for inflation.
Full Text
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<title>Federal Register, Volume 89 Issue 98 (Monday, May 20, 2024)</title>
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[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Rules and Regulations]
[Pages 43737-43739]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-10844]
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FEDERAL RESERVE SYSTEM
12 CFR Part 229
[Regulation CC; Docket No. R-1832]
RIN 7100-AG 76
Availability of Funds and Collection of Checks
AGENCY: Board of Governors of the Federal Reserve System (Board) and
Consumer Financial Protection Bureau (CFPB).
ACTION: Final rule.
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SUMMARY: The Board and the CFPB (collectively, the Agencies) are
amending Regulation CC, which implements the Expedited Funds
Availability Act (EFA Act) and the Check Clearing for the 21st Century
Act (Check 21 Act), to fulfill a statutory requirement in the EFA Act
to adjust the dollar amounts under the EFA Act for inflation.
DATES: Effective date: This final rule is effective July 1, 2025.
FOR FURTHER INFORMATION CONTACT:
Board: Andrew Ruben, Counsel (202) 263-4851, Legal Division, or Ian
C.B. Spear, Assistant Director (202) 452-3959, Division of Reserve Bank
Operations and Payment Systems. For users of TTY-TRS, please call 711
from any telephone, anywhere in the United States.
CFPB: George Karithanom, Regulatory Implementation & Guidance
Program Analyst, Office of Regulations, at 202-435-7700 or at: <a href="https://reginquiries.consumerfinance.gov/">https://reginquiries.consumerfinance.gov/</a>. If you require this document in an
alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#62212432203d2301010711110b000b0e0b161b22010412004c050d14"><span class="__cf_email__" data-cfemail="4605001604190725252335352f242f2a2f323f062520362468212930">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Regulation CC (12 CFR part 229) implements the EFA Act and the
Check 21 Act.\1\ Subpart B of Regulation CC implements the requirements
set forth in the EFA Act regarding the availability schedules within
which banks \2\ must make funds available for withdrawal, exceptions to
those schedules, disclosure of funds availability policies, and payment
of interest. The EFA Act and subpart B of Regulation CC contain
specified dollar amounts, including: (1) the minimum amount of
deposited funds that banks must make available for withdrawal by
opening of business on the next day for certain check deposits
(``minimum amount''); \3\ (2) the amount a bank must make available
when using the EFA Act's permissive adjustment to the funds-
availability rules for withdrawals by cash or other means (``cash
withdrawal amount''); \4\ (3) the amount of funds deposited by certain
checks in a new account that are subject to next-day availability
(``new-account amount''); \5\ (4) the threshold for using an exception
to the funds-availability schedules if the aggregate amount of checks
on any one banking day exceeds the threshold amount (``large-deposit
threshold''); \6\ (5) the threshold for determining whether an account
has been repeatedly overdrawn (``repeatedly overdrawn threshold''); \7\
and (6) the civil liability amounts for failing to comply with the EFA
Act's requirements.\8\
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\1\ Expedited Funds Availability Act, 12 U.S.C. 4001 et seq.;
Check Clearing for the 21st Century Act, 12 U.S.C. 5001 et seq.
\2\ Section 229.2(e) of Regulation CC defines ``bank'' to
include banks, savings institutions, and credit unions.
\3\ The minimum amount is currently $225. 12 CFR
229.10(c)(1)(vii); 12 U.S.C. 4002(a)(2)(D).
\4\ The cash withdrawal amount is currently $450. 12 CFR
229.12(d); 12 U.S.C. 4002(b)(3)(B).
\5\ The new-account amount is currently $5,525. 12 CFR
229.13(a)(1)(ii); 12 U.S.C. 4003(a)(3).
\6\ The large-deposit threshold is currently $5,525. 12 CFR
229.13(b); 12 U.S.C. 4003(b)(1).
\7\ The repeatedly overdrawn threshold is currently $5,525. 12
CFR 229.13(d)(2). This dollar amount is not specified in the EFA
Act, but is a result of the authority of the Board and the CFPB
under section 604(b)(3) of the EFA Act (12 U.S.C. 4003(b)(3)) to
establish reasonable exceptions to time limitations for deposit
accounts that have been overdrawn repeatedly.
\8\ The civil liability amounts are currently ``not less than
$100 nor greater than $1,100'' for an individual action and ``not
more than $552,500 or 1 percent of the net worth'' of a depository
institution for a class action. 12 CFR 229.21(a)(2)(i),
(a)(2)(ii)(B).
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The Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) made certain amendments to the EFA Act, and these
amendments were effective on July 21, 2011.\9\ Section 609(a) of the
EFA Act,\10\ as amended by section 1086(d) of the Dodd-Frank Act,
provides that the Board and the Director of the CFPB shall jointly
prescribe regulations to carry out the provisions of the EFA Act, to
prevent the circumvention or evasion of such provisions, and to
facilitate compliance with such provisions.
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\9\ Public Law 111-203, sections 1062, 1086, 1100H, 124 Stat.
2081 (2010); 75 FR 57252 (September 20, 2010).
\10\ 12 U.S.C. 4008(a).
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Additionally, section 1086(f) of the Dodd-Frank Act added section
607(f) of the EFA Act, which provides that the dollar amounts under the
EFA Act shall be adjusted every five years after December 31, 2011, by
the annual percentage increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W), as published by the Bureau
of Labor Statistics, rounded to the nearest multiple of $25.\11\ In
2019, the Agencies promulgated a final rule that implemented this
section of the EFA Act. The final rule codified a methodology for
inflation adjustments and specified that the relevant dollar amounts
shall be adjusted effective on July 1, 2020, on July 1, 2025, and on
July 1 of every fifth year after 2025.\12\
[[Page 43738]]
For dollar amount adjustments that are effective on July 1, 2025, the
inflation measurement period begins in July 2018 and ends in July
2023.\13\
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\11\ 12 U.S.C. 4006(f).
\12\ See 84 FR 31687 (July 3, 2019); 84 FR 45403 (Aug. 29,
2019); 12 CFR 229.11(a). As noted in the preamble to the July 2019
final rule, the effective dates are consistent with section 302 of
the Riegle Community Development and Regulatory Improvement Act of
1994 (Pub. L. 103-325, 108 Stat. 2160, 12 U.S.C. 4802). That section
provides that new regulations and amendments to regulations
prescribed by Federal banking agencies, including the Board (but not
the CFPB), that impose additional reporting, disclosures, or other
new requirements on insured depository institutions, shall take
effect on the first day of a calendar quarter beginning on or after
the date on which the regulations are published in final form (with
certain exceptions). 84 FR 31687 at 31688 n.16.
\13\ 12 CFR 229.11(b)(1).
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II. Adjustment
As a result of the 21.8 percent increase in the CPI-W between July
2018 and July 2023, the following thresholds are effective July 1,
2025: \14\
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\14\ Dollar amounts have been rounded to the nearest multiple of
$25, consistent with statutory requirements. 12 U.S.C. 4006(f).
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Section Threshold
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Minimum Amount, 12 CFR 229.10(c)(1)(vii)................ $275
Cash Withdrawal Amount, 12 CFR 229.12(d)................ 550
New-Account Amount, 12 CFR 229.13(a)(1)(ii)............. 6,725
Large-Deposit Threshold, 12 CFR 229.13(b)............... 6,725
Repeatedly Overdrawn Threshold, 12 CFR 229.13(d)(2)..... 6,725
Civil Liability Minimum and Maximum for Individual \15\ 125
Action, 12 CFR 229.21(a)(2)(i)......................... $1,350
Civil Liability Maximum for Class Action, 12 CFR 672,950
229.21(a)(2)(ii)(B)....................................
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III. Legal Authority
In issuing the final rule, the Agencies are exercising their
authority under section 609(a) of the EFA Act (12 U.S.C. 4008(a)) to
amend subpart B of Regulation CC to prescribe regulations to carry out
the provisions of the EFA Act, to prevent the circumvention or evasion
of such provisions, and to facilitate compliance with such
provisions.\16\
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\15\ The civil liability minimum threshold did not change in the
previous five-year inflation measurement period due to rounding to
the nearest $25, consistent with statutory requirements. As a
result, the inflation adjustment for this five-year period includes
the aggregate inflation percentage increase for both five-year
periods. 12 CFR 229.11(b)(4).
\16\ Additionally, section 604(b)(3) of the EFA Act (12 U.S.C.
4003(b)(3)) authorizes the Agencies to establish reasonable
exceptions to time limitations for deposit accounts that have been
overdrawn repeatedly. As noted above, the Agencies also rely on this
authority in adjusting the repeatedly overdrawn threshold in 12 CFR
229.13(d).
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IV. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the Agencies find that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest.\17\ The amendments in this rule are expected,
technical, and non-discretionary adjustments that are required by
statute and result from the application of a methodology in Regulation
CC that the Agencies previously published for comment.\18\ For these
reasons, the Agencies have determined that publishing a notice of
proposed rulemaking and providing opportunity for public comment are
unnecessary. Therefore, the amendments are adopted in final form.
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\17\ 5 U.S.C. 553(b)(B).
\18\ In the preamble to the July 2019 final rule, the Agencies
stated their expectation that notice and opportunity for public
comment on subsequent inflation adjustments would be impracticable,
unnecessary, or contrary to the public interest, because the
calculation methodology for the adjustments is set forth in the
regulation and future execution of the adjustments will be technical
and non-discretionary. 84 FR 31687, 31690.
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to a rulemaking where
a general notice of proposed rulemaking is not required.\19\ As noted
previously, the Agencies have determined that it is unnecessary to
publish a general notice of proposed rulemaking for this joint final
rule. Accordingly, the Regulatory Flexibility Act's requirements
relating to an initial and final regulatory flexibility analysis do not
apply.
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\19\ 5 U.S.C. 603(a) and 604(a).
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C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\20\ the
Agencies have reviewed this final rule and determined that it does not
create any new information collections or substantially revise any
existing collections.
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\20\ 44 U.S.C. 3506; 5 CFR part 1320.
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D. Plain Language Used
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113
Stat. 1338, 1471, 12 U.S.C. 4809) requires the Federal banking agencies
to use plain language in all proposed and final rules published after
January 1, 2000. The Board has sought to present the final rule in a
simple and straightforward manner.
E. CFPB Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the CFPB will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule taking effect. The Office of Information and Regulatory
Affairs has designated this rule as not a ``major rule'' as defined by
5 U.S.C. 804(2).
List of Subjects in 12 CFR Part 229
Banks, banking, Federal Reserve System, Reporting and recordkeeping
requirements.
Authority and Issuance
For the reasons set forth in the preamble, the Board amends
Regulation CC, 12 CFR part 229, as set forth below:
PART 229--AVAILABILITY OF FUNDS AND COLLECTIONS OF CHECKS
(REGULATION CC)
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1. The authority citation for part 229 continues to read as follows:
Authority: 12 U.S.C. 4001-4010, 12 U.S.C. 5001-5018.
Subpart B--Availability of Funds and Disclosure of Funds
Availability Policies
Sec. 229.10 [Amended]
0
2. In Sec. 229.10, remove ``$225,'' and add in its place ``$275;'' in
paragraph (c)(1)(vii)(A).
0
3. In Sec. 229.11, revise paragraph (c) to read as follows:
Sec. 229.11 Adjustment of dollar amounts.
* * * * *
(c) Amounts. (1) For purposes of Sec. 229.10(c)(1)(vii), the
dollar amount in effect during a particular period is the amount stated
in this paragraph (c)(1) for that period.
(i) Prior to July 21, 2011, the amount is $100.
[[Page 43739]]
(ii) From July 21, 2011, through June 30, 2020, by operation of
section 603(a)(2)(D) of the EFA Act (12 U.S.C. 4002(a)(2)(D)) the
amount is $200.
(iii) From July 1, 2020, through June 30, 2025, the amount is $225.
(iv) Effective July 1, 2025, the amount is $275.
(2) For purposes of Sec. 229.12(d), the dollar amount in effect
during a particular period is the amount stated in this paragraph
(c)(2) for that period.
(i) Prior to July 1, 2020, the amount is $400.
(ii) From July 1, 2020, through June 30, 2025, the amount is $450.
(iii) Effective July 1, 2025, the amount is $550.
(3) For purposes of Sec. Sec. 229.13(a), (b), and (d), the dollar
amount in effect during a particular period is the amount stated in
this paragraph (c)(3) for that period.
(i) Prior to July 1, 2020, the amount is $5,000.
(ii) From July 1, 2020, through June 30, 2025, the amount is
$5,525.
(iii) Effective July 1, 2025, the amount is $6,725.
(4) For purposes of Sec. 229.21(a), the dollar amounts in effect
during a particular period are the amounts stated in this paragraph
(c)(4) for the period.
(i) Prior to July 1, 2020, the amounts are $100, $1,000, and
$500,000 respectively.
(ii) From July 1, 2020, through June 30, 2025, the amounts are
$100, $1,100, and $552,500 respectively.
(iii) Effective July 1, 2025, the amounts are $125, $1,350, and
$672,950 respectively.
Sec. 229.12 [Amended]
0
4. In Sec. 229.12, remove ``$450'' and ``$225'' and add in their
places ``$550'' and ``$275'', respectively, in paragraph (d).
Sec. 229.13 [Amended]
0
5. In Sec. 229.13, remove ``$5,525'' and add in its place ``$6,725''
in paragraphs (a)(1)(ii), (b), and (d)(2).
Sec. 229.21 [Amended]
0
6. In Sec. 229.21:
0
a. Remove ``$100'' and ``$1,100'' and add in their places ``$125'' and
``$1,350'', respectively, in paragraph (a)(2)(i).
0
b. Remove ``$552,500'' and add in its place ``$672,950'' in paragraph
(a)(2)(ii)(B).
Appendix E to Part 229--[Amended]
0
7. In appendix E to part 229, remove the dollar amounts in the
``Remove'' column wherever they appear within the section indicated in
the ``Section'' column, and add in their places the dollar amounts in
the ``Add'' column in the following table:
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Section Remove Add
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IV.D.1.............................................. $5,525 $6,725
IV.D.5.............................................. 225 275
IV.D.5.............................................. 1,225 1,275
IV.D.5.............................................. 500 550
VI.D.1. and 2....................................... 450 550
VI.D.1.............................................. 100 275
VI.F.1.............................................. 100 275
VII.B.2.b........................................... 100 275
VII.B.2.b........................................... 5,525 6,725
VII.B.2.b........................................... 5,000 6,725
VII.C.1............................................. 5,525 6,725
VII.C.2............................................. 2,225 2,275
VII.C.2............................................. 225 275
VII.C.2............................................. 5,300 6,450
VII.C.2............................................. 3,475 2,275
VII.D.3............................................. 100 275
VII.E.2............................................. 5,525 6,725
VII.E.4............................................. 100 275
VII.F.1............................................. 100 275
VII.G.1............................................. 100 275
VII.H.2.b, b.(1), and b.(2)......................... 5,525 6,725
VII.H.2.b.(1) and (2)............................... 225 275
VII.H.2.b.(1) and (2)............................... 5,300 6,450
VII.I.4............................................. 5,000 6,725
VII.I.4............................................. 2,000 275
XIII.C.3 and 4...................................... 400 550
XIV.C.2............................................. 225 275
XIV.C.2............................................. 75 25
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By order of the Board of Governors of the Federal Reserve
System.
Ann E. Misback,
Secretary of the Board.
Brian Shearer,
Assistant Director, Office of Policy Planning and Strategy, Consumer
Financial Protection Bureau.
[FR Doc. 2024-10844 Filed 5-17-24; 8:45 am]
BILLING CODE 6210-01-P; 4810-AM-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.