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Home > News & Events > Press Releases

Press Release
March 03, 2011

Federal Reserve proposes amendments to
Regulation CC regarding collection of checks
and availability of funds
For immediate release
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The Federal Reserve Board on Thursday requested public comment on
proposed amendments to Regulation CC (Availability of Funds and
Collection of Checks) to encourage banks to clear and return checks
electronically, add provisions that govern electronic items cleared
through the check-collection system, and shorten the "exception" hold
periods on deposited funds.
To encourage electronic collection and return of checks between banks,
the proposal provides that a depositary bank would be entitled to the
expeditious return of a check only if it agrees to receive returned checks
electronically. In addition, the proposal would permit the bank
responsible for paying a check to require that checks presented to it for
same-day settlement be presented electronically. More generally, the
proposal would apply Regulation CC's collection and return provisions,
including warranties, to electronic check images that meet certain
requirements.
Additionally, due to the faster collection and return timeframes that result
from electronic collection and return, the proposal would shorten the
safe-harbor period for an exception hold to four business days, which
should enable the depositary bank to learn of the return of virtually all
unpaid checks before being required to make these deposits available
for withdrawal. The proposal also eliminates the references in

Regulation CC to "nonlocal" checks. The distinction between local and
nonlocal checks is tied to Federal Reserve Bank check processing
regions. As of February 2010, the Reserve Banks have ceased
operations in all but one of their check processing offices, such that
there is now only one check processing region, and all checks are local
to each other. Local checks are generally subject to a two-business-day
hold period.
Appendix C to the regulation sets forth model funds-availability forms
that banks may use as the basis of their disclosures to customers. The
proposal includes new model forms that were developed using
consumer testing and that set forth funds-availability policies in a
manner that is designed to be more easily understood by consumers.
The Board's Federal Register notice is attached. Comments on the
proposal are due June 3, 2011.
Federal Register notice: HTML | PDF (9.5 MB)
Comments: Submit | View
Summary of Findings: Design and Testing of Regulation CC Funds
Availability Clauses, Disclosures, and Notices (877 KB PDF)
Model forms
1. C-1 (30 KB PDF) Next-day availability
2. C-2 (23 KB PDF) Next-day availability and section 229.13
exceptions
3. C-3A (34 KB PDF) Next-day availability, case-by-case holds to
statutory limits on check deposits without cash-withdrawal
limitation, and section 229.13 exceptions
4. C-3B (41 KB PDF) Next-day availability, case-by-case holds to
statutory limits on check deposits with cash-withdrawal limitation,
and section 229.13 exceptions
5. C-4A (38 KB PDF) Holds to statutory limits on all deposits without
cash-withdrawal limitation
6. C-4B (37 KB PDF) Holds to statutory limits on all deposits with
cash-withdrawal limitation
7. C-9 (19 KB PDF) Exception or reasonable-cause hold notice
8. C-10 (22 KB PDF) One-time notice for large-deposit and
redeposited-check exception holds
9. C-11 (22 KB PDF) One-time notice for repeated-overdraft
exception holds
10. C-12A (23 KB PDF) Case-by-case hold notice without cashwithdrawal limitation
11. C-12B (25 KB PDF) Case-by-case hold notice with cashwithdrawal limitation
12. C-13 (21 KB PDF) Notice at locations where employees accept
consumer deposits
13. C-14 (21 KB PDF) Notice at locations where employees accept
consumer deposits (case-by-case holds)

Last Update: March 03, 2011

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