Compliance Question of the Week

When do I need to notify members about the change in next-day availability of funds that has increased because of Dodd-Frank?

When do I need to notify members about the change in next-day availability of funds that has increased because of Dodd-Frank?

ANSWER: Per the recent Regulation CC proposed amendments, “When the Dodd-Frank Act’s increase to $200 becomes effective, credit unions should ensure that their disclosures reflect the new funds-availability schedule and that customers are notified of the changes in policy in accordance with 229.18(e).  Specifically, effective on July 21, 2011, a credit union basing its funds-availability disclosure on current model C-3, C-4, or C-5 must ensure that its disclosure indicates that the first $200 (rather than $100) of a check deposit will be available on the next business day after the day of deposit.”

Section 229.18(e) of reg CC states that:

(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank’s availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.

Because the Dodd-Frank Act’s increase is expediting the availability of funds, credit unions do not need to provide the changed availability policy 30 days prior to July 21, 2011, but will need to do so no later than August 21, 2011.

This question and more like it can be found in CAL, the Compliance Answer Library.