Full text of Federal Reserve Bank of New York Circulars : Regulations CC and J

View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

/ 0 =? J J

D e c e m b e r 12, 1988

To A l l D e p o s i t o r y I n s t i t u t i o n s i n t h e S e c o n d
F e d e r a l R e s e r v e D i s t r i c t and O t h e r s
M a i n t a i n i n g S e t s o f Board R e g u l a t i o n s :

Enclosed are copies of (1) the new Regulation CC pamphlet,
"Availability of Funds and Collection of Checks," effective September 1, 1988,
of the Board of Governors of the Federal Reserve System,

(2) Technical

Amendments to Regulation CC, effective October 25, 1988, and (3) a revision of
Regulation J, "Collection of Checks and Other Items and Wire Transfers of
Funds by Federal Reserve Banks," effective September 1, 1988.

Notification of

the technical amendments to Regulation CC was sent to depository institutions
in this District with our Circular No. 10269 on November 21; the revision of
Regulation J conforms that regulation to the provisions of the Expedited Funds
Availability Act and supersedes the pamphlet dated January 1, 1987.
Additional copies of these documents will be furnished upon request
(Tel. No. 212-720-5215 or 5216).
C irculars D ivision
FEDERAL RESERVE BANK OF NEW YORK

2642C

Board of Governors of the Federal Reserve System

Regulation CC
Availability of Funds
and Collection of Checks
12 C F R 229; e ffe c tiv e S ep tem b er 1, 1988

fyr /o x is

Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the
Federal Reserve District in which the inquiry arises.
August 1988

Contents

Page

Subpart A—General
Section 229.1—Authority and
purpose; scope....................................
Section 229.2—Definitions .....................
Commentary on section 229.2 ...............
Section 229.3—Administrative
enforcement........................................
(a) Enforcement agencies.................
(b) Additional powers.......................
(c) Enforcement by the B oard..........

3
5
9
18
18
18
18

Subpart B—Availability of Funds and
Disclosure of Funds-Availability
Policies
Section 229.10—Next-day availability. . .
(a) Cash deposits...............................
(b) Electronic payments...................
(c) Certain check deposits ...............
Commentary on section 229.10 .............
Section 229.11—Temporary
availability schedule...........................
(a) Effective date...............................
(b) Local checks and certain other
checks..........................................
(c) Nonlocal checks .........................
(d) Deposits at nonproprietary
ATMs..........................................
(e) Extension of schedule for
certain deposits in Alaska,
Hawaii, Puerto Rico, and the
U.S. Virgin Islands.....................
Commentary on section 229.11 .............
Section 229.12—Permanent
availability schedule...........................
(a) Effective date..............................
(b) Local checks and certain other
checks..........................................
(c) Nonlocal checks .........................
(d) Time period adjustment for
withdrawal by cash or similar
means..........................................
(e) Extension of schedule for
certain deposits in Alaska,
Hawaii, Puerto Rico, and the
U.S. Virgin Islands.....................
Commentary on section 229.12 .............

Page
S e c tio n 2 2 9 .1 3 — E x c e p t io n s ..........................

19
19
19
19
21

( a ) N e w a c c o u n ts .......................................

( b ) L arge d e p o s i t s .......................................

( c ) R e d e p o s ite d c h e c k s .............................

( d ) R e p e a te d o v e r d r a f t s ..........................

( e ) R e a so n a b le c a u se to d o u b t
c o l l e c t i b i li t y ............................................

( f ) E m e rg e n c y c o n d i t i o n s .......................

( g ) N o t ic e o f e x c e p t i o n ............................

( h ) A v a ila b ility o f d e p o sits su b ject
to e x c e p t i o n s .........................................

C o m m e n ta r y o n se c tio n 2 2 9 .1 3 ..................

S e c tio n 2 2 9 .1 4 — P a y m e n t o f i n t e r e s t . . . .

( a ) In g e n e r a l .................................................

( b ) S p ec ia l ru le for c re d it u n io n s . . . .

( c ) E x c e p tio n fo r c h e c k s retu rn ed
u n p a id ......................................................

C o m m e n ta r y o n se c tio n 2 2 9 .1 4 ..................

S e c tio n 2 2 9 .1 5 — G en er a l d isc lo su re
r e q u i r e m e n t s ....................................................

25
25

( a ) F o r m o f d is c lo s u r e s ............................

25
25

( c ) M u ltip le a c c o u n ts a n d m u ltip le

( b ) U n ifo r m referen ce to d a y o f
a v a i la b il i t y ..............................................
a c c o u n t h o l d e r s ....................................
( d ) D o r m a n t or in a c tiv e a c c o u n ts . . .

C o m m e n ta r y o n se c tio n 2 2 9 .1 5 ..................

44
44
44
45

S e c tio n 2 2 9 .1 6 — S p ec ific a v a ila b ility -

25
26

p o lic y d i s c l o s u r e ............................................

( a ) G e n e r a l......................................................

( b ) C o n te n t o f s p e c ific a v a ila b ility p o lic y d i s c l o s u r e ..................................

( c ) L o n g e r d e la y s o n a ca se -b y -ca se

29
29
29
29

b a s i s ...........................................................

( d ) C r ed it-u n io n n o tic e o f in te re stp a y m e n t p o l i c y ....................................

C o m m e n ta r y o n s e c tio n 2 2 9 .1 6 ..................

S e c tio n 2 2 9 .1 7 — In itia l d i s c l o s u r e s ...........

( a ) N e w a c c o u n ts .......................................

( b ) E x istin g a c c o u n ts ...............................

C o m m e n ta r y o n se c tio n 2 2 9 .1 7 ..................

S e c tio n 2 2 9 .1 8 — A d d itio n a l d isc lo su r e

29
30

r e q u i r e m e n t s ....................................................

( a ) D e p o s it s l i p s ............................................

( b ) L o c a tio n s w h er e e m p lo y e e s
a c ce p t c o n su m e r d e p o s i t s ................

Contents

Regulation CC
Page

( c ) A u to m a te d te ller m a c h in e s .............

( d ) U p o n r e q u e s t .........................................

( e ) C h a n g e s in p o lic y ...............................

C o m m e n ta r y o n se c tio n 2 2 9 .1 8 ..................

S e c tio n 2 2 9 .1 9 — M is c e ll a n e o u s ..................

( a ) W h e n fu n d s are c o n sid e r ed
d e p o s i t e d .................................................

( b ) A v a ila b ility a t start o f b u sin e ss
d a y ..............................................................

( c ) E ffe c t o n p o lic ie s o f d ep o sita ry
b a n k ...........................................................

( d ) U s e o f c a lc u la ted a v a ila b ility . . . .

( e ) H o ld s o n o th e r f u n d s ..........................

( f ) E m p lo y e e tra in in g a n d c o m p lia n c e

( g ) E ffe ct o f m erger t r a n s a c t io n ..........

C o m m e n ta r y o n se c tio n 2 2 9 .1 9 ..................

S e c tio n 2 2 9 .2 0 — R e la tio n to sta te la w . . .

( a ) In g e n e r a l ...........................................

( b ) P re em p tio n o f in c o n sis te n t la w . . .
( c ) S ta n d a rd s for p r e e m p t io n ..........

62
62

( d ) P r e e m p tio n d e t e r m in a t io n ............

( e ) P ro c ed u r es for p reem p tio n
d e t e r m in a t io n s .................................

C o m m e n ta r y o n se c tio n 2 2 9 .2 0 ..................

S e c tio n 2 2 9 .2 1 — C iv il l i a b i l i t y ...............

( a ) C iv il l i a b i l i t y ...................................

( b ) C la ss a c tio n a w a r d s ......................

( c ) B o n a fid e e r r o r s ..............................

( d ) J u r i s d i c t i o n ......................................

( e ) R e lia n c e o n B o a rd r u lin g s ...............

( f ) E x c lu s io n s ...........................................

( g ) R e c o r d r e t e n t i o n ...........................

C o m m e n ta r y o n se c tio n 2 2 9 .2 1 ..................

S u b p a rt C— C o lle c tio n o f C h eck s
S e c tio n 2 2 9 .3 0 — P a y in g b a n k ’s
r esp o n sib ility fo r retu rn o f c h e c k s . . . .

( a ) R e tu r n o f c h e c k s .................................

( b ) U n id e n tifia b le d ep o sita ry b a n k . .
( c ) E x te n sio n o f d ea d lin e for
e x p e d ite d d e l i v e r y .........................

( d ) Id e n tific a tio n o f retu rn ed c h e c k . .

( e ) D e p o s ita r y b a n k w ith o u t a c c o u n ts

( f ) N o t ic e in lie u o f retu rn .....................

( g ) R e lia n c e o n ro u tin g n u m b e r ..........

C o m m e n ta r y o n se c tio n 2 2 9 .3 0 ..................

S e c tio n 2 2 9 .3 1 — R e tu r n in g b a n k ’s
r e sp o n sib ility for retu rn o f c h e c k s . . . .
( a ) R e tu r n o f c h e c k s ...........................

76
76

( b ) U n id e n tifia b le d ep o sita ry b a n k . . .
( c ) S e t t l e m e n t ........................................
n

76
76

Page

(d) Charges......................................
(e) Depositary bank withoutaccounts
(f) Notice in lieu of return ...............
(g) Reliance on routing number........
Commentary on section 229.31 .............
Section 229.32—Depositary bank’s
responsibility for returned checks . . . .
(a) Acceptance of returned checks. . .
(b) Payment......................................
(c) Misrouted returned checks and
written notices of nonpayment. . .
(d) Charges......................................
Commentary on section 229.32 .............
Section 229.33—Notice of nonpayment .
(a) Requirement...............................
(b) Content of notice.........................
(c) Acceptance of notice...................
(d) Notification to customer.............
(e) Depositary bank withoutaccounts
Commentary on section 229.33 .............
Section 229.34—Warranties by paying
bank and returning bank.....................
(a) Warranties..................................
(b) Warranty of notice of
nonpayment.................................
(c) Damages......................................
(d) Tender of defense.......................
Commentary on section 229.34 .............
Section 229.35—Indorsements...............
(a) Indorsement standards...............
(b) Liability of bank handling check .
(c) Indorsement by a b a n k ...............
(d) Indorsement for depositary bank .
Commentary on section 229.35 .............
Section 229.36—Presentation of checks .
(a) Payable-through and payable-at
checks..........................................
(b) Receipt at bank office or
processing center.........................
(c) Truncation..................................
(d) Liability of bank during forward
collection....................................
Commentary on section 229.36 .............
Section 229.37—Variation by agreement
Commentary on section 229.37 .............
Section 229.38—Liability........................
(a) Standard of care; liability;
measure of damages ...................
(b) Paying bank’s failure to make
timely re tu rn ...............................
(c) Comparative negligence..............

77
77
77
77
78
82
82
82
82
82
83
85
85
85
85
85
85
86
88
88
88
88
88
89
90
90
90
90
90
91
95
95
95
95
95
96
98
99
100
100
100
100

Regulation CC

( d ) R e sp o n sib ility fo r b a c k o f ch e c k .

Contents
Page
100

( e ) T im e lin e ss o f a c t io n ............................

100

( f ) E x c l u s i o n .................................................

100

( g ) J u r i s d i c t i o n ............................................
( h ) R e lia n c e o n B oard r u l i n g s .............
C o m m e n ta r y o n se c tio n 2 2 9 .3 8 ..................
S e c tio n 2 2 9 .3 9 — In so lv e n c y o f b an k
( a ) D u t y o f r e c e iv e r ....................................

100
100
101

103
103
104
105
106

EXPEDITED FUNDS
AVAILABILITY A C T ..................... 159

103

( c ) P re fer en ce a g a in st c o lle c tin g ,
p a y in g , or retu rn in g b a n k ................
( d ) F in a lity o f s e t t l e m e n t .......................
C o m m e n ta r y o n se c tio n 2 2 9 .3 9 ..................

107
108
109
110

Appendix A—Routing number guide to
next-day availability checks and local
checks..................................................
Appendix B—Reduction of schedules for
certain nonlocal checks.......................
Appendix C—Model forms, clauses, and
notices................................................
Commentary on appendix C ...................
Appendix D—Indorsement standards. . .

103
103

( b ) P re fer en ce a g a in st p a y in g or
d e p o sita r y b a n k ....................................

Page

Section 229.41—Relation to state law . . .
Commentary on section 229.41 ..............
Section 229.42—Exclusions...................
Commentary on section 229.42 .............

I ll
115
138
153
157

S e c tio n 2 2 9 .4 0 — E ffe ct o f m erger
t r a n s a c t io n ........................................................
C o m m e n ta r y o n se c tio n 2 2 9 .4 0 ..................

N ote on Regulation CC

In the Code of Federal Regulations, the com
mentary on Regulation CC is set out separate
ly as appendix E. In the version of Regulation
CC that follows, each section of the regulation
is followed by the commentary on that sec
tion. The beginning of each commentary sec
tion is clearly labeled “Commentary,” and the
running head at the top of each page indicates
whether the text on that page is regulation or
commentary.
The commentary provides background ma
terial to explain the Board’s intent in adopting
a particular part of the regulation. It also pro
vides examples to help readers understand
how a particular requirement is to work. Un

der section 611(e) of the Expedited Funds
Availability Act (12 USC 4010(e)), no provi
sion of section 611—
imposing any liability shall apply to any act done or
omitted in good faith conformity with any rule, reg
ulation, or interpretation thereof by the Board of
Governors of the Federal Reserve System, notwith
standing the fact that after such act or omission has
occurred, such rule, regulation, or interpretation is
amended, rescinded, or determined by judicial or
other authority to be invalid for any reason.

The commentary is an “interpretation” of the
regulation by the Board within the meaning of
section 611.

Regulation CC
Availability of Funds and Collection of Checks
12 CFR 229; effective September 1, 1988*

Subpart A—General
Section
229.1 Authority and purpose; organization
229.2 Definitions
229.3 Administrative enforcement
Subpart B—Availability of Funds and Disclo
sure of Funds-Availability Policies
Section
229.10
229.11
229.12
229.13
229.14
229.15
229.16
229.17
229.18
229.19
229.20
229.21

Next-day availability
Temporary availability schedule
Permanent availability schedule
Exceptions
Payment of interest
General disclosure requirements
Content of specific availability-policy
disclosure
Initial disclosures
Additional disclosure requirements
Miscellaneous
Relation to state law
Civil liability

Subpart C—Collection of Checks
Section
229.30 Paying bank’s responsibility for
turn of checks
229.31 Returning bank’s responsibility
return of checks
229.32 Depositary bank’s responsibility
returned checks
229.33 Notice of nonpayment
229.34 Warranties by paying bank and
turning bank
229.35 Indorsements
229.36 Presentment of checks
229.37 Variation by agreement
229.38 Liability
229.39 Insolvency of bank
229.40 Effect of merger transaction
229.41 Relation to state law
229.42 Exclusions

re
for
for
re

* The effective date is September 1, 1988, except for sec
tion 229.12, which is effective September 1, 1990. After
September 1, 1990, section 229.11 will no longer be
effective.

Appendix A—Routing Number Guide to
Next-Day-Availability Checks and Local
Checks
Appendix B—Reduction of Schedules for
Certain Nonlocal Checks
Appendix C—Model Forms, Clauses, and
Notices
Appendix D—Indorsement Standards
Appendix E—Commentary f

SUBPART A—G ENERAL

SECTION 229.1—Authority and
Purpose; Organization
(a) Authority and purpose. This part (Regu
lation CC; 12 CFR part 229) is issued by the
Board of Governors of the Federal Reserve
System (“Board”) to implement the Expedit
ed Funds Availability Act (“act”), which is
contained in title VI of Public Law 100-86.
(b) Organization. This part is divided into
subparts and appendixes as follows—
(1) Subpart A contains general informa
tion. It sets forth—
(i) The authority,
purpose,
and
organization;
(ii) Definition of terms; and
(iii) Authority for administrative en
forcement of this part’s provisions.
(2) Subpart B of this part contains rules
regarding the duty of banks to make funds
deposited into accounts available for with
drawal, including both temporary and per
manent availability schedules. Subpart B of
this part also contains rules regarding ex
ceptions to the schedules, disclosure of
funds-availability policies, payment of in
terest, liability of banks for failure to com
ply with subpart B of this part, and other
matters.
t In this publication, the commentary is interwoven with
the regulation rather than set out as a separate appendix.
The commentary for each section of the regulation immedi
ately follows that section.

§229.1

(3) Subpart C of this part contains rules to
expedite the collection and return of checks
by banks. These rules cover the direct re
turn of checks, the manner in which the
paying bank and returning banks must re
turn checks to the depositary bank, notifica
tion of nonpayment by the paying bank,
rules regarding indorsement and present
ment, the liability of banks for failure to
comply with subpart C of this part, and
other matters.

Regulation CC

SECTION 229.2—Definitions
As used in this part, unless the context re
quires otherwise:
(a) “Account” means a deposit as defined in
12 CFR 204.2(a)(l)(i) that is a transaction
account as described in 12 CFR 204.2(e). As
defined in these sections, “account” generally
includes accounts at a bank from which the
account holder is permitted to make transfers
or withdrawals by negotiable or transferable
instrument, payment order of withdrawal,
telephone transfer, electronic payment, or
other similar means for the purpose of making
payments or transfers to third persons or oth
ers. “Account” also includes accounts at a
bank from which the account holder may
make third-party payments at an ATM, re
mote service unit, or other electronic device,
including by debit card, but the term does not
include savings deposits or accounts described
in 12 CFR 204.2(d)(2) even though such ac
counts permit third-party transfers. An ac
count may be in the form of—
(1) A demand deposit account,
(2) A negotiable order of withdrawal ac
count,
(3) A share draft account,
(4) An automatic transfer account, or
(5) Any other transaction account de
scribed in 12 CFR 204.2(e).
“Account” does not include an account where
the account holder is a bank, where the ac
count holder is an office of an institution de
scribed in paragraphs (e )( 1) through (e )( 6 )
of this section or an office of a “foreign bank”
as defined in section 1(b) of the International
Banking Act (12 USC 3101) that is located
outside the United States, or where the direct
or indirect account holder is the Treasury of
the United States.
(b) “Automated clearinghouse” or “ACH”
means a facility that processes debit and cred
it transfers under rules established by a Feder
al Reserve Bank operating circular on auto
mated clearinghouse items or under rules of
an automated clearinghouse association.
(c) “Automated teller machine” or “ATM”
means an electronic device at which a natural
person may make deposits to an account by

§ 229.2

cash or check and perform other account
transactions.
(d) “Available for withdrawal” with respect
to funds deposited means available for all uses
generally permitted to the customer for actu
ally and finally collected funds under the
bank’s account agreement or policies, such as
for payment of checks drawn on the account,
certification of checks drawn on the account,
electronic payments, withdrawals by cash,
and transfers between accounts.
(e) “Bank” means—
(1) An “insured bank” as defined in sec
tion 3 of the Federal Deposit Insurance Act
(12USC 1813) or a bank that is eligible to
apply to become an insured bank under sec
tion 5 of that act (12 USC 1815);
(2) A “mutual savings bank” as defined in
section 3 of the Federal Deposit Insurance
Act (12 USC 1813);
(3) A “savings bank” as defined in section
3 of the Federal Deposit Insurance Act (12
USC 1813);
(4) An “insured credit union” as defined
in section 101 of the Federal Credit Union
Act (12USC 1752)ora credit union that is
eligible to make application to become an
insured credit union under section 201 of
that act (12 USC 1781);
(5) A “member as defined in section 2 of
the Federal Home Loan Bank Act (12 USC
1422);
( 6 ) An “insured institution” as defined in
section 401 of the National Housing Act
(12 USC 1724) or an institution that is eli
gible to make application to become an in
sured institution under section 403 of that
act (12 USC 1726); or
(7) A “branch” of a “foreign bank” as de
fined in section 1(b) of the International
Banking Act (12 USC 3101).
For purposes of subpart C and, in connection
therewith, subpart A, the term “bank” also
includes any person engaged in the business of
banking, including a Federal Reserve Bank, a
Federal Home Loan Bank, and a state or unit
of general local government to the extent that
the state or unit of general local government
acts as a paying bank. Unless otherwise speci
fied, the term “bank” includes all of a bank’s
5

§ 229.2

offices in the United States, but not offices lo
cated outside the United States.
(f) “Banking day” means that part of any
business day on which an office of a bank is
open to the public for carrying on substantial
ly all of its banking functions.
(g) “Business day” means a calendar day other
than a Saturday or a Sunday, January 1, the
third Monday in January, the third Monday in
February, the last Monday in May, July 4, the
first Monday in September, the second Monday
in October, November 11, the fourth Thursday
in November, or December 25. If January 1,
July 4, November 11, or December 25 fall on a
Sunday, the next Monday is not a business day.
(h) “Cash” means United States coins and
currency.
(i) “Cashier’s check” means a check that
is—
(1) Drawn on a bank;
(2) Signed by an officer or employee of the
bank on behalf of the bank as drawer;
(3) A direct obligation of the bank; and
(4 ) P rovided to a custom er o f th e b an k or
acquired from th e bank for rem ittance
purposes.

(j) “Certified check” means a check with re
spect to which the drawee bank certifies by
signature on the check of an officer or other
authorized employee of the bank that—
(1 ) (i) The signature of the drawer on the
check is genuine; and
(ii) The bank has set aside funds that—
(A) Are equal to the amount of the
check, and
(B) Will be used to pay the check;
or
(2) The bank will pay the check upon
presentment.
(k) “Check” means—
(1) A negotiable demand draft drawn on
or payable through or at an office of a bank;
(2) A negotiable demand draft drawn on a
Federal Reserve Bank or a Federal Home
Loan Bank;
(3) A negotiable demand draft drawn on
the Treasury of the United States;
(4) A demand draft drawn on a state govern

Regulation CC

ment or unit of general local government that
is not payable through or at a bank;
(5) A United States Postal Service money
order; or
( 6 ) A traveler’s check drawn on or pay
able through or at a bank.
The term “check” does not include a noncash
item or an item payable in a medium other
than United States money. A draft may be a
check even though it is described on its face
by another term, such as “money order.” For
purposes of subpart C, and in connection
therewith, subpart A, of this part, the term
“check” also includes a demand draft of the
type described above that is nonnegotiable.
(/) “Check clearinghouse association” means
any arrangement by which three or more par
ticipants exchange checks on a local basis, in
cluding an entire metropolitan area. The term
“check clearinghouse association” may in
clude arrangements using the premises of a
Federal Reserve Bank, but it does not include
the handling of checks for forward collection
or return by a Federal Reserve Bank.
(m) “Check processing region” means the
geographical area served by an office of a Fed
eral Reserve Bank for purposes of its check
processing activities.
(n) “Consumer account” means any account
used primarily for personal, family, or house
hold purposes.
(o) “Depositary bank” means the first bank
to which a check is transferred even though it
is also the paying bank or the payee. A check
deposited in an account is deemed to be trans
ferred to the bank holding the account into
which the check is deposited, even though the
check is physically received and indorsed first
by another bank.
(p) “Electronic payment” means a wire
transfer or an ACH credit transfer.
(q) “Forward collection” means the process
by which a bank sends a check on a cash basis
to the paying bank for payment.
(r) “Local check” means a check payable by
or at a local paying bank, or a check payable
by a nonbank payor and payable through a
local paying bank.

Regulation CC

(s) “Local paying bank” means a paying
bank that is located in the same check-pro
cessing region as the physical location of—
(1) The branch or proprietary ATM of the
depositary bank in which that check was
deposited; or
(2) Both the branch of the depositary bank
at which the account is held and the non
proprietary ATM at which the check is
deposited.
(t) “Merger transaction” means—
(1) A merger or consolidation of two or
more banks; or
(2) The transfer of substantially all of the
assets of one or more banks or branches to
another bank in consideration of the as
sumption by the acquiring bank of substan
tially all of the liabilities of the transferring
banks, including the deposit liabilities.
(u) “Noncash item” means an item that
would otherwise be a check, except that—
(1) A passbook, certificate, or other docu
ment is attached;
(2) It is accompanied by special instruc
tions, such as a request for special advice of
payment or dishonor;
(3) It consists of more than a single thick
ness of paper, except a check that qualifies
for handling by automated check-process
ing equipment; or
(4) It has not been preprinted or postencoded in magnetic ink with the routing
number of the paying bank.
(v) “Nonlocal check” means a check payable
by, through, or at a nonlocal paying bank.
(w) “Nonlocal paying bank” means a paying
bank that is not a local paying bank with re
spect to the depositary bank.
(x) “Nonproprietary ATM” means an ATM
that is not a proprietary ATM.
(y) “Participant” means a bank that—
(1) Is located in the geographic area
served by a check clearinghouse associa
tion; and
(2) Both collects and receives for payment
checks through the check clearinghouse as
sociation either directly or through another
participant.

§ 229.2

(z) “Paying bank” means—
(1) The bank by which a check is payable,
unless the check is payable at another bank
and is sent to the other bank for payment or
collection;
(2) The bank at which a check is payable
and to which it is sent for payment or
collection;
(3) The Federal Reserve Bank or Federal
Home Loan Bank by which a check is
payable;
(4) The bank through which a check is
payable and to which it is sent for payment
or collection, if the check is not payable by
a bank;
(5) The state or unit of general local gov
ernment on which a check is drawn.
For purposes of subpart C, and in connection
therewith, subpart A, “paying bank” includes
the bank through which a check is payable
and to which the check is sent for payment or
collection, regardless of whether the check is
payable by another bank, and the bank whose
routing number appears on a check in frac
tional or magnetic form and to which the
check is sent for payment or collection.
(aa) “Proprietary ATM” means an ATM
that is—
(1) Owned or operated by, or operated ex
clusively for, the depositary bank;
(2) Located on the premises (including
the outside wall) of the depositary bank; or
(3) Located within 50 feet of the premises
of the depositary bank, and not identified as
being owned or operated by another entity.
If more than one bank meets the owned-oroperated criterion of paragraph ( 1 ) of this
definition, the ATM is considered proprietary
to the bank that operates it.
(bb) “Qualified returned check” means a re
turned check that is prepared for automated
return to the depositary bank by placing the
check in a carrier envelope or placing a strip
on the check and encoding the strip or enve
lope in magnetic ink. A qualified returned
check need not contain other elements of a
check drawn on the depositary bank, such as
the name of the depositary bank.
(cc) “Returning bank” means a bank (other
than the paying or depositary bank) handling
7

§ 229.2

a returned check or notice in lieu of return. A
returning bank is also a collecting bank for the
purpose of UCC section 4—202(1 )(e) and

( 2 ).

(dd) “Routing number” means—
(1) The number printed on the face of a
check in fractional form or in nine-digit
form; or
(2) The number in a bank’s indorsement in
fractional or nine-digit form.
(ee) “Similarly situated bank” means a bank
of similar size, located in the same communi
ty, and with similar check-handling activities
as the paying bank or returning bank.
(ff) “State” means a state, the District of Co
lumbia, Puerto Rico, or the U.S. Virgin
Islands.
(gg) “Teller’s check” means a check provid
ed to a customer of a bank or acquired from a
bank for remittance purposes, that is drawn
by the bank, and drawn on another bank or
payable through or at a bank.
(hh) “Traveler’s check” means an instru
ment for the payment of money that—
(1) Is drawn on or payable through or at a
bank;
(2) Is designated on its face by the term
“traveler’s check” or by any substantially
similar term or is commonly known and
marketed as a traveler’s check by a corpora
tion or bank that is an issuer of traveler’s
checks;
(3) Provides for a specimen signature of
the purchaser to be completed at the time of
purchase; and
(4) Provides for a countersignature of the
purchaser to be completed at the time of
negotiation.
(ii) “Uniform Commercial Code,” “Code,”
or “UCC” means the Uniform Commercial
Code as adopted in a state.
(jj) “United States” means the states, includ
ing the District of Columbia, the U.S. Virgin
Islands, and Puerto Rico.
(kk) “Unit of general local government”
means any city, county, parish, town, town
ship, village, or other general-purpose politi
cal subdivision of a state. The term does not

Regulation CC

include special-purpose units of government,
such as school districts or water districts.
(//) “Wire transfer” means an unconditional
order to a bank to pay a fixed or determinable
amount of money to a beneficiary upon re
ceipt or on a day stated in the order, that is
transmitted by electronic or other means
through the Federal Reserve Communications
System, the New York Clearing House Inter
bank Payments System, other similar net
work, between banks, or on the books of a
bank. “Wire transfer” does not include an
electronic fund transfer as defined in section
902(f) of the Electronic Fund Transfer Act
(15 USC 1693a(6)).
(mm) Unless the context requires otherwise,
the terms not defined in this section have the
meanings set forth in the UCC.

§ 229.2

Regulation CC Commentary

COM M ENTARY
SECTION 229.2—Definitions
Section 229.2 defines the terms used in the
regulation. For the most part, terms are de
fined as they are in section 602 of the Expedit
ed Funds Availability Act (12 USC 4001).
The Board has made a number of changes for
the sake of clarity, to conform the terminolo
gy to that which is familiar to the banking
industry, to define terms that are not defined
in the act, and to carry out the purposes of the
act. The Board has also incorporated by refer
ence the definitions of the Uniform Commer
cial Code where appropriate. Some of the
Regulation CC definitions are self-explanatory
and therefore are not discussed in this
commentary.
2(a) Account
The act defines account to mean “a demand
deposit account or similar transaction account
at a depository institution.” The regulation
defines “account” in terms of the definition of
“transaction account” in the Board’s Regula
tion D (12 CFR 204). The definition of “ac
count” in Regulation CC, however, excludes
certain deposits, such as nondocumentary ob
ligations (see 12 CFR 204.2(a) (1) (vii)), that
are covered under the definition of “transac
tion account” in Regulation D. The definition
applies to accounts with general third-party
payment powers but does not cover time de
posits or savings deposits, including money
market deposit accounts, even though they
may have limited third-party payment pow
ers. The Board believes that it is appropriate
to exclude these accounts because of the refer
ence to demand deposits in the act, which sug
gests that the act is intended to apply only to
accounts that permit unlimited third-party
transfers.
The term “account” also differs from the
definition of “transaction account” in Regula
tion D because the term “account” refers to
accounts held at banks. Under subparts A and
C, the term “bank” includes not only any “de
pository institution,” as defined in the act, but
also any person engaged in the business of
banking, such as a Federal Reserve Bank, a
Federal Home Loan Bank, or a private banker

that is not subject to Regulation D. Thus ac
counts at these institutions benefit from the
expeditious-return requirements of subpart C.
Interbank deposits, including accounts of
offices of domestic banks or foreign banks lo
cated outside the United States, and direct
and indirect accounts of the United States
Treasury (including Treasury General Ac
counts and Treasury Tax and Loan Deposit
Accounts) are exempt from Regulation CC.
2(b) Automated Clearinghouse (ACH)
The Board has defined “automated clearing
house” as a facility that processes debit and
credit transfers under rules established by a
Federal Reserve Bank operating circular gov
erning automated clearinghouse items or the
rules of an ACH association. ACH credit
transfers are included in the definition of
“electronic payment.”
The reference to “credit transfers” and
“debit transfers” does not refer to the corre
sponding credit and debit entries that are part
of the same transaction, but to different kinds
of ACH payments. In an ACH credit transfer,
the originator orders that its account be debit
ed and another account credited. In an ACH
debit transfer, the originator, with prior au
thorization, orders another account to be deb
ited and the originator’s account to be
credited.
A facility that handles only “wire transfers”
(defined elsewhere) is not an ACH.
2(c) Automated Teller Machine
“Automated teller machine (ATM)” is not
defined in the act. The regulation defines an
ATM as an electronic device at which a natu
ral person may make deposits to an account
by cash or check and perform other account
transactions. Point-of-sale terminals, ma
chines that only dispense cash, night deposito
ries, and lobby deposit boxes are not ATMs
within the meaning of the definition, either be
cause they do not accept deposits of cash or
checks (e.g., point-of-sale terminals and cash
dispensers) or because they only accept de
posits (e.g., night depositories and lobby box
es) and cannot perform other transactions. A
lobby deposit box or similar receptacle in
9

§ 229.2

which written payment orders or deposits
may be placed is not an ATM.
A facility may be an ATM within this defi
nition even if it is a branch under state or
federal law, although an ATM is not a branch
as that term is used in this regulation.
2 (d ) Available for Withdrawal
Under this definition, when funds become
“available for withdrawal,” the funds may be
put to all uses for which the customer may use
actually and finally collected funds in the cus
tomer’s account under the customer’s account
agreement with the bank. Examples of such
uses include payment of checks drawn on the
account, certification of checks, electronic
payments, and cash withdrawals. Funds are
available for these uses notwithstanding provi
sions of other law that may restrict the use of
uncollected funds (e.g., 18 USC 1004; 12 USC
331).
If a bank makes funds available to a cus
tomer for a specific purpose (such as paying
checks that would otherwise overdraw the
customer’s account and be returned for insuf
ficient funds) before the funds must be made
available under the bank’s policy or this regu
lation, it may nevertheless apply a hold con
sistent with this regulation to those funds for
other purposes (such as cash withdrawals).
For the purposes of this regulation, funds are
considered available for withdrawal even
though they cannot actually be withdrawn be
cause they are subject to garnishment, tax
levy, or court order restricting disbursements
from the account.
2(e) Bank
The act uses the term “depository
institution,” which it defines by reference
to section 19(b) (1) (A) (i) through (vi) of
the Federal Reserve Act (12 USC
461 (b)(1)(A )(i) through (vi)). This regula
tion uses the term “bank,” a term that con
forms to the usage the Board has previously
adopted in Regulation J. “Bank” is also used
in article 4 of the Uniform Commercial Code.
“Bank” is defined to include depository in
stitutions, such as commercial banks, savings
banks, savings and loan associations, and
credit unions as defined in the act, and U.S.

Regulation CC Commentary

branches of foreign banks. For purposes of
subpart C, and in connection therewith, sub
part A, any Federal Reserve Bank, Federal
Home Loan Bank, or any other person en
gaged in the business of banking is regarded as
a bank. The phrase “any other person engaged
in the business of banking,” is derived from
UCC section 1-201(4), and is intended to
cover entities, such as certain industrial banks
and private bankers that handle checks for
collection and payment, so that all checks will
be covered by the same rules for forward col
lection and return, even though they may not
be covered by the requirements of subpart B.
For the purposes of subpart C, and in connec
tion therewith, subpart A, term may also in
clude states and units of general local govern
ment to the extent that they pay warrants or
other drafts drawn directly on the state or lo
cal government itself.
Unless otherwise specified, the term “bank”
includes all of a bank’s offices in the United
States. The regulation does not cover foreign
offices of U.S. banks.
2(f) and (g) Banking Day and Business
Day
The act defines “business day” as any day ex
cluding Saturdays, Sundays, and legal holi
days. “Legal holiday,” however, is not
defined, and the variety of local holidays, to
gether with the practice of some banks to
close midweek, makes the act’s definition diffi
cult to apply. The Board believes that two
kinds of business days are relevant. First,
when determining the day when funds are de
posited or when a bank must perform certain
actions (such as returning a check), the focus
should be on a day that the bank is actually
open for business. Second, when counting
days for purposes of determining when funds
must be available under the regulation or
when notice of nonpayment must be received
by the depositary bank, there would be confu
sion and uncertainty in trying to follow the
schedule of a particular bank, and there is less
need to identify a day when a particular bank
is open. Most banks that act as intermediaries
(large correspondents and Federal Reserve
Banks) follow the same holiday schedule. Ac
cordingly, the regulation has two definitions:

§ 229.2

Regulation CC Commentary

“business day” generally follows the standard
Federal Reserve holiday schedule (which is
followed by most large banks), and “banking
day” is defined to mean that part of a business
day on which a bank is open for substantially
all of its banking activities.
The definition of “banking day” corre
sponds to the definition of banking day in
UCC section 4—104(1) (c), except that a
banking day is defined in terms of a “business
day.” Thus, if a bank is open on Saturday,
Saturday might be a banking day for purposes
of the UCC, but it would not be a banking day
for purposes of Regulation CC because Satur
day is never a “business day” under the
regulation.
The definition of “banking day” is phrased
in terms of when “an office of a bank is open”
to indicate that a bank may observe a banking
day on a per-branch basis. Deposits made at
an ATM are considered made at the branch
holding the account into which the deposit is
made for purposes of determining the day of
deposit.

2 (h ) Cash
“Cash” means U.S. coins and currency. The
phrase in the act “including Federal Reserve
notes” has been deleted as unnecessary. (See
31 USC 5103.)

2 (i) Cashier’s Check
The regulation adds to the second item in the
act’s definition of “cashier’s check” the
phrase, “on behalf of the bank as drawer,” to
clarify that the term “cashier’s check” is in
tended to cover only checks that a bank draws
on itself. The definition of cashier’s check in
cludes checks provided to customers for pur
poses of making payments or to pay with
drawals or provided to others to enable them
to make payments. Cashier’s checks provided
to customers or others are often labeled as
“cashier’s check,” “officer’s check,” or “offi
cial check.” The definition does not include
checks that a bank draws on itself for other
purposes, such as to pay employees and
vendors.

2 (j) Certified Check
The act defines a “certified check” as one to
which a bank has certified that the drawer’s
signature is genuine and that the bank has set
aside funds to pay the check. Under the Uni
form Commercial Code, certification of a
check means the bank’s signed agreement that
it will honor the check as presented (UCC
§§ 3-410, 3-411). The regulation defines
“certified check” to include both the act’s and
UCC’s definitions.
2(k) Check
“Check” is defined in section 602(7) of the
act as a negotiable demand draft drawn on or
payable through an office of a depository insti
tution located in the United States, excluding
noncash items. The regulation includes six
categories of instruments within the definition
of check.
The first category is negotiable demand
drafts drawn on or payable through or at an
office of a bank. As the definition of “bank”
includes only offices located in the United
States, this category is limited to checks
drawn on or payable through or at a banking
office located in the United States.
The act treats drafts payable through a
bank as checks, even though under the UCC
the payable-through bank is a collecting bank
to make presentment and is generally not au
thorized to make payment (UCC § 3-120).
The act does not expressly address items that
are payable at a bank. This regulation treats
both payable-through and payable-at demand
drafts as checks. The Board believes that
treating demand drafts payable at a bank as
checks will not have a substantial effect on the
operations of payable at banks—by far the
largest proportion of payable-at items are not
negotiable demand drafts, but time items,
such as commercial paper, bonds, notes, bank
er’s acceptances, and securities. These time
items are not covered by the requirements of
the act or this regulation. (The treatment of
payable-through drafts is discussed in greater
detail in connection with the definitions of
“local check” and “paying bank.”)
The second category is checks drawn on
Federal Reserve Banks and Federal Home
Loan Banks. Principal and interest payments

§ 229.2

on federal debt instruments are often paid
with checks drawn on a Federal Reserve Bank
as fiscal agent of the United States, and these
fiscal-agency checks are indistinguishable
from other checks drawn on Federal Reserve
Banks. (See 31 CFR 355.) Federal Reserve
Bank checks are also used by some banks as
substitutes for cashier’s or teller’s checks.
Similarly, savings and loan associations often
use checks drawn on Federal Home Loan
Banks as teller’s checks. The definition of
“check” includes checks drawn on Federal
Home Loan Banks and Federal Reserve
Banks because in many cases they are the
functional equivalent of Treasury checks or
teller’s checks.
The third and fourth categories of instru
ment included in the definition of “check” re
fer to government checks. The act refers to
checks drawn on the U.S. Treasury, even
though these instruments are not drawn on or
payable through an office of a depository insti
tution, and checks drawn by state and local
governments. The act also gives the Board au
thority to define functionally equivalent in
struments as “depository checks.” 1 Thus, the
act is intended to apply to instruments other
than those that meet the strict definition of
“check” in section 602(7) of the act. Checks
and warrants drawn by states and local gov
ernments are often used for the purposes of
making unemployment-compensation pay
ments and other payments that are important
to the recipients. Consequently, the Board has
expressly defined “check” to include drafts
drawn on the U.S. Treasury and drafts or
warrants drawn by a state or a unit of general
local government on itself.
The fifth category of instrument included in
the definition of “check” is U.S. Postal Service
money orders. These instruments are defined
as checks because they are often used as a sub
stitute for checks by consumers, even though
money orders are not negotiable under Postal
Service regulations. The Board has not pro
vided specific rules for other types of money
orders; these instruments are generally drawn

1 Section 602(11) of the act (12 USC 4001(11)) defines
“depository check” as “any cashier’s check, certified check,
teller’s check, and any other functionally equivalent instru
ment as determined by the Board.”

Regulation CC Commentary

on or payable through or payable at banks
and are treated as checks on that basis.
The sixth and final category of instrument
included in the definition of check is traveler’s
checks drawn on or payable through or at a
bank. “Traveler’s check” is defined in para
graph (hh) of this section. Finally, for the
purposes of subpart C, and in connection
therewith, subpart A, the definition of
“check” includes nonnegotiable demand
drafts because these instruments are often
handled as cash items in the forward-collec
tion process.
The definition of “check” does not include
an instrument payable in foreign currency
(i.e., other than in United States money as
defined in 31 USC 5101) or a credit card
draft.
2(1) Check Clearinghouse Association

The act defines a clearinghouse association as
any arrangement by which participants ex
change deposited checks on a local basis, in
cluding an entire metropolitan area. The defi
nition includes informal arrangements where
the participants have not formally constituted
themselves as an association. The definition of
check clearinghouse association excludes di
rect exchanges involving only two banks.
The act defines “clearinghouses” as local
arrangements, which may cover an entire
metropolitan area. In some cases, most nota
bly California, a single clearinghouse associa
tion sponsors separate exchanges in different
metropolitan areas. For purposes of this regu
lation, each of those exchanges would be re
garded as a separate clearinghouse.
Using the premises of a Federal Reserve
Bank to exchange checks does not constitute
the handling of checks for collection by the
Reserve Bank. Several clearinghouses meet at
Reserve Banks to exchange checks among
their members.
2(m ) Check-Processing Region
The act defines this term as “the geographic
area served by a Federal Reserve bank check
processing center or such larger area as the
Board may prescribe by regulations.” The
Board has defined check-processing region as
the territory served by one of the 48 Federal

Regulation CC Commentary

Reserve head offices, branches, or regional
check-processing centers. Appendix A in
cludes a list of routing numbers arranged by
Federal Reserve Bank office. The definition of
check-processing region is key to determining
whether a check is considered local or
nonlocal.

2 (n ) Consumer Account
“Consumer account” is defined as an account
used primarily for personal, family, or house
hold purposes. Both consumer and noncon
sumer accounts are subject to the require
ments of this regulation, including the
requirement that funds be made available ac
cording to specific schedules and that the
bank make specified disclosures of its avail
ability policies. Section 229.18(b) (Notices at
Branch Locations) and section 229.18(e)
(Notice of Changes in Policy) apply only to
consumer accounts. Section 229.19(d) (Use
of Calculated Availability) applies only to
nonconsumer accounts.

2(o) Depositary Bank
The regulation uses the term “depositary
bank” rather than the term “receiving deposi
tory institution.” “Receiving depository insti
tution” is a term unique to the act, while “de
positary bank” is the term used in article 4 of
the UCC and Regulation J.
A depositary bank includes the bank in
which the check is first deposited. If a foreign
office of a U.S. or foreign bank sends checks to
its U.S. correspondent bank for forward col
lection, the U.S. correspondent is the deposi
tary bank since foreign offices of banks are not
included in the definition of “bank.”
If a customer deposits a check in its ac
count at a bank, the customer’s bank is the
depositary bank with respect to the check. For
example, if a person deposits a check into an
account at a nonproprietary ATM, the bank
holding the account into which the check is
deposited is the depositary bank even though
another bank may service the nonproprietary
ATM and send the check for collection. (Un
der section 229.35 the depositary bank may
agree with the bank servicing the nonproprie
tary ATM to have the servicing bank place its

§ 229.2

own indorsement on the check as the deposi
tary bank. For the purposes of subpart C, the
bank applying its indorsement as the deposi
tary-bank indorsement on the check is the de
positary bank.)
For purposes of subpart B, a bank may act
as both the depositary bank and the paying
bank with respect to a check, if the check is
payable by the bank in which it was deposited,
or if the check is payable by a nonbank payor
and payable through or at the bank in which
it was deposited. A bank is also considered a
depositary bank with respect to checks it re
ceives as payee. For example, a bank is a de
positary bank with respect to checks it re
ceives for loan repayment, even though these
checks are not deposited in an account at the
bank. Because these checks would not be “de
posited to accounts,” they would not be sub
ject to the availability or disclosure require
ments of subpart B.

2(p ) Electronic Payment
“Electronic payment” is defined to mean a
wire transfer as defined in section 229.2(11)
or an ACH credit transfer. The act requires
that funds deposited by wire transfer be made
available for withdrawal on the business day
following deposit but expressly leaves the defi
nition of the term “wire transfer” to the
Board. Because ACH credit transfers fre
quently involve important consumer pay
ments, such as wages, the regulation requires
that funds deposited by ACH credit transfers
be available for withdrawal on the business
day following deposit.
ACH debit transfers, even though they may
be transmitted electronically, are not defined
as electronic payments because the receiver of
an ACH debit transfer has the right to return
the transfer, which would reverse the credit
given to the originator. Thus, ACH debit
transfers are more like checks than wire trans
fers. Further, bank customers that receive
funds by originating ACH debit transfers are
primarily large corporations, which would
generally be able to negotiate with their banks
for prompt availability.
A point-of-sale transaction would not be
considered an electronic payment unless the
transaction was effected by means of an ACH
credit transfer or wire transfer.
13

§ 229.2

2 (q ) Forward Collection
“Forward collection” is defined to mean the
process by which a bank sends a check to the
paying bank for payment as distinguished
from the process by which the check is re
turned after nonpayment. Noncash collections
are not included in the term “forward
collection.”
2 (r) Local Check
“Local check” is defined as a check payable
by or at a local paying bank, or, in the case of
nonbank payors, payable through a local pay
ing bank. A check payable by a local bank but
payable through a nonlocal bank is a local
check. Conversely, a check payable through a
local bank but payable by a nonlocal bank is a
nonlocal check. Where two banks are named
on a check and neither is designated as a payable-through bank, the check is considered
payable by either bank and may be considered
local or nonlocal depending on which bank it
is sent to for payment. Generally, the deposi
tary bank may rely on the routing number to
determine whether a check is local or nonlo
cal. Appendix A includes a list of routing
numbers arranged by Federal Reserve Bank
Office to assist persons in determining wheth
er or not such a check is local. If, however, a
check is payable by one bank but payable
through another bank, the routing number ap
pearing on the check will be that of the pay
able-through bank, not the paying bank.
Many credit-union share drafts and certain
other checks payable by banks are payable
through other banks. In such cases, the rout
ing number cannot be relied on to determine
whether the check is local or nonlocal. In a
few cases, a payable-through bank will be des
ignated only by routing numbers and will not
be named on the check. In such cases also, the
routing number may not be relied on to deter
mine whether the check is local or nonlocal.

Regulation CC Commentary

the depositary bank is payable through a bank
located in another check-processing region,
the check is considered local or nonlocal de
pending on the location of the bank by which
it is payable even if the check is sent to the
nonlocal bank for collection.
2. The location of the depositary bank is de
termined by the physical location of the
branch or proprietary ATM at which a check
is deposited. If the branch of the depositary
bank located in one check-processing region
sends a check to the depositary bank’s central
facility in another check-processing region,
and the central facility is in the same check
processing region as the paying bank, the
check is still considered nonlocal. (See the
commentary on definition of “paying bank.”)
For deposits at nonproprietary ATMs, a
paying bank is a local paying bank only if the
paying bank is located in the same check-pro
cessing region as the location of both the
branch of the depositary bank at which the
account is held and the nonproprietary ATM
at which the check is deposited.
2 (t) Merger Transaction
“Merger transaction” is a term used in sub
parts B and C in connection with transition
rules for merged banks. It encompasses merg
ers, consolidations, and purchase/assumption
transactions of the type that must usually be
approved under the Bank Merger Act (12
USC 1828) or similar statutes; it does not en
compass acquisitions of a bank under the
Bank Holding Company Act (12 USC 1842)
or section 408 of the National Housing Act
(12 USC 1730a) where an acquired bank
maintains its separate corporate existence.
Regulation CC adopts a one-year transition
period for banks that are party to a merger
transaction during which the merged banks
will continue to be treated as separate entities.
(See sections 229.19(g) and 229.40.)

2(s) Local Paying Bank

2(u) Noncash Item

“Local paying bank” is defined as a paying
bank located in the same check-processing re
gion as the branch or proprietary ATM of the
depositary bank.

The act defines the term “check” to exclude
noncash items, and defines “noncash items”
to include checks to which another document
is attached, checks accompanied by special in
structions, or any similar item classified as a
noncash item in the Board’s regulation.
The regulation’s definition of “noncash
item” also includes checks that consist of
more than a single thickness of paper (except

Examples
1. If a check that is payable by a bank that is
located in the same check-processing region as
14

Regulation CC Commentary

checks that qualify for handling by automated
check-processing equipment, e.g., those
placed in carrier envelopes) and checks that
have not been preprinted or post-encoded in
magnetic ink with the paying bank’s routing
number as well as checks with documents
attached or accompanied by special
instructions.
A check that has been preprinted or postencoded with a routing number that has been
retired (e.g., because of a merger) for at least
three years is a noncash item unless the cur
rent number is added for processing purposes
by placing the check in an encoded carrier
document or adding a strip to the check.
Checks that are accompanied by special in
structions are also noncash items. For exam
ple, a person concerned about whether a
check will be paid may request the depositary
bank to send a check for collection as a non
cash item with an instruction to the paying
bank to notify the depositary bank promptly
when the check is paid or dishonored.
For purposes of forward collection, a copy
of a check is neither a check nor a noncash
item, but may be treated as either. For pur
poses of return, a copy is generally a notice in
lieu of return. (See sections 229.30(f) and
229.31(f).)
2(y) Participant
“Participant” means a bank that is located in
the geographic area served by a clearinghouse
and that both collects checks drawn on other
clearinghouse participants and receives for
payment checks from other clearinghouse
participants through the clearinghouse either
directly or through another participant. The
phrase “through a participant” covers associ
ate members of the clearinghouse, but a bank
is not a participant merely because it sends a
check to a correspondent that in turn presents
the check through a clearinghouse exchange.
2(z) Paying bank
The regulation uses this term in lieu of the
act’s “originating depository institution.” For
purposes of subpart B, the term “paying
bank” includes the payor bank, the payable-at
bank to which a check is sent, or, if the check
is payable by a nonbank payor, the bank
through which the check is payable and to
which it is sent for payment or collection. For
purposes of subpart C, the term includes the
payable-through bank and the bank whose

§ 229.2

routing number appears on the check, regard
less of whether the check is payable by a dif
ferent bank, provided that the check is sent
for payment or collection to the payablethrough bank or the bank whose routing num
ber appears on the check.
Under sections 229.30 and 229.36(a), a
bank designated as a payable-through bank or
payable-at bank and to which the check is
sent for payment or collection is responsible
for the expedited return of checks and notice
of nonpayment requirements of subpart C.
The payable-through or payable-at bank may
contract with the payor with respect to its lia
bility in discharging these responsibilities. The
Board believes that the act makes a clear con
nection between availability and the time it
takes for checks to be cleared and returned.
Allowing the payable-through bank additional
time to forward checks to the payor and await
return or pay instructions from the payor
would delay the return of these checks, in
creasing the risks to depositary banks. Sub
part C places on payable-through and pay
able-at banks the requirements of expeditious
return based on the time the payable-through
or payable-at bank received the check for for
ward collection.
If a check is sent for forward collection
based on the routing number, the bank associ
ated with the routing number is a paying bank
for the purposes of subpart C requirements,
including notice of nonpayment, even if the
check is not drawn by a customer of that bank
or the check is fraudulent.
The phrase “and to which [the check] is
sent for payment or collection” includes send
ing not only the physical check, but informa
tion regarding the check under a truncation
arrangement.
Federal Reserve Banks and Federal Home
Loan Banks are also paying banks under all
subparts of the regulation with respect to
checks payable by them, even though such
banks are not defined as banks for purposes of
subpart B.

2(aa) Proprietary ATM
Under the temporary schedule, all deposits at
nonproprietary ATMs are treated as deposits
of nonlocal checks and deposits at proprietary
ATMs are generally treated as deposits at
banking offices. The conference report on the
act indicates that the special availability rules
for deposits received through nonproprietary
15

§ 229.2

ATMs are provided because “nonproprietary
ATMs today do not distinguish among check
deposits or between check and cash deposits”
(H.R. Rep. No. 261, 100th Cong., 1st Sess.
179 (1987)). Thus, during the temporary
schedule, a deposit of any combination of cash
and checks at a nonproprietary ATM may be
treated as if it were a deposit of nonlocal
checks, because the depositary bank does not
know the makeup of the deposit and conse
quently is unable to place different holds on
cash, local check, and nonlocal check deposits
made at the ATM.
A colloquy between Senators Proxmire and
Dodd during the floor debate on the Competi
tive Equality Banking Act (133 Cong. Rec.
SI 1289 (Aug. 4, 1987)) indicates that wheth
er a bank operates the ATM is the primary
criterion in determining whether the ATM is
proprietary to that bank. Since a bank should
be capable of ascertaining the composition of
deposits made to an ATM operated by that
bank, an exception to the availability sched
ules is not warranted for these deposits. If
more than one bank meets the owns-or-operates criterion, the ATM is considered proprie
tary to the bank that operates it. For the pur
pose of this definition, the bank that operates
an ATM is the bank that puts checks deposit
ed into the ATM into the forward-collection
stream. An ATM owned by one or more
banks, but operated by a nonbank servicer, is
considered proprietary to the bank or banks
that own it.
The act also includes location as a factor in
determining whether an ATM that is either
owned or operated by a bank is proprietary to
that bank. The definition of proprietary ATM
includes an ATM located on the premises of
the bank, either inside the branch or on its
outside wall, regardless of whether the ATM
is owned or operated by that bank. Since the
act also defines a proprietary ATM as one
that is “in close proximity” to the bank, the
regulation defines an ATM located within 50
feet of a bank to be proprietary to that bank
unless it is identified as being owned or oper
ated by another entity. The Board believes
that the statutory proximity test was designed
to apply to situations where it would appear
to the depositor that the ATM is run by his or
her bank, because of the proximity of the
ATM to the bank. The Board believes that an
ATM located within 50 feet of a banking of
fice would be presumed proprietary to that
bank unless it is clearly identified as being
owned or operated by another entity.
16

Regulation CC Commentary

2(bb) Qualified Returned Check
Subpart C requires the paying bank and re
turning bank(s) to return checks in an expe
ditious manner. The banks may meet this
responsibility by returning a check to the de
positary bank by the same general means used
for forward collection of a check from the de
positary bank to the paying bank. One way to
speed the return process is to prepare the re
turned check for automated processing. Re
turned checks can be automated by either the
paying bank or a returning bank by placing
the return in a carrier envelope or by placing a
strip on the bottom of the return, and encod
ing the envelope or strip with the routing
number of the depositary bank, the amount of
the check, and a special return identifier. Re
turns are identified by placing a “2 ” in posi
tion 44 of the MICR line. (See American Na
tional Standards Committee on Financial
Services, Specification for the Placement and
Location of MICR Printing, X9.13 (Sept. 8 ,
1983), hereinafter referred to as “ANSI
X9.13-1983.”)
Generally, under the standard of care im
posed by section 229.38, a paying or returning
bank would be liable for any damages in
curred due to misencoding of the routing
number, the amount of the check, or return
identifier on a qualified returned check unless
the error was due to problems with the depos
itary bank’s indorsement. (See also discussion
of section 229.38(c).) A qualified returned
check that contains an encoding error would
still be a qualified returned check for purposes
of the regulation.
A qualified returned check need not contain
the elements of a check drawn on tre deposi
tary bank, such as the name of the depositary
bank, as is required under the direct-return
provision of UCC section 4—212(2). Because
indorsements and other information on carri
er envelopes or strips will not appear on a re
turned check itself, banks will wish to retain
carrier envelopes and/or microfilm or other
records of carrier envelopes or strips with
their check records.

2(cc) Returning Bank
“Returning bank” is defined to mean any
bank (excluding the paying bank and the de
positary bank) handling a returned check. A
returning bank may or may not be a bank that
handled the returned check in the forwardcollection process. A returning bank includes

§ 229.2

Regulation CC Commentary

a bank that agrees to handle a returned check
for expeditious return to the depositary bank
under section 229.31(a). A returning bank is
also a collecting bank for the purpose of a col
lecting bank’s duty to act seasonably under
UCC section 4—202.

2(dd) Routing Number
Each bank is assigned a routing number by
Rand McNally & Co. as agent for the Ameri
can Bankers Association. The routing number
takes two forms: a fractional form and a nine
digit form. A paying bank is identified by both
the fractional form routing number (which
normally appears in the upper right-hand cor
ner of the check) and the nine-digit form. The
nine-digit routing number of the paying bank
is generally printed in magnetic ink near the
bottom of the check (the “MICR strip;” see
ANSI X9.13-1983). Subpart C requires de
positary banks and subsequent collecting
banks to place their routing numbers in nine
digit form in their indorsements.

numbers with an 8000 prefix that identifies a
bank as paying agent.
Because a traveler’s check is payable by, at,
or through a bank, it is also a check for pur
poses of this regulation. When not subject to
the next-day availability requirement for new
accounts, a traveler’s check should be treated
as a local or nonlocal check depending on the
location of the paying bank. The depositary
bank may rely on the designation of the pay
ing bank by the routing number to determine
whether local or nonlocal treatment is
required.

2(ii) Uniform Commercial Code
“Uniform Commercial Code” is defined as the
version of the code adopted by the individual
states. For purposes of uniform citation, all
citations to the UCC in this part refer to the
official text as approved by the American Law
Institute and the National Conference of
Commissioners on Uniform State Laws.

2(11) Wire Transfer

2(gg) Teller’s Check
“Teller’s check” is defined in the act to mean
a check issued by a depository institution and
drawn on another depository institution. The
definition in the regulation includes not only
checks drawn by a bank on another bank, but
also checks payable through or at a bank. This
would include checks drawn on a nonbank, as
long as the check is payable through or at a
bank. The definition explicitly excludes checks
used by the bank to pay employees or ven
dors. (See also the commentary on the defini
tion of “cashier’s check.”)

2(h h ) Traveler’s Check
The act and regulation require that traveler’s
checks be treated as cashier’s, teller’s, or certi
fied checks when a new depositor opens an
account. (See section 229.13(a); 12 USC
4003(a)(1)(C).) The act does not define
traveler’s check.
One element of the definition states that a
traveler’s check is “drawn on or payable
through or at a bank.” Traveler’s checks that
are not issued by banks may not have any
words on them identifying a bank as drawee
or paying agent, but may bear unique routing

The act delegates to the Board the authority
to define the term “wire transfer.” The regula
tion defines “wire transfer” as an uncondition
al order to a bank to pay a fixed or determin
able amount of money to a beneficiary upon
receipt or on a day stated in the order that is
transmitted by electronic or other means over
certain networks or on the books of banks and
that is used primarily to transfer funds be
tween commercial accounts. Unconditional
means that no condition, such as presentation
of documents, must be met before the bank
receiving the order is to make payment. A
wire transfer may be transmitted by electronic
or other means. “Electronic means” includes
computer-to-computer links, on-line termi
nals, telegrams (including TWX, TELEX, or
similar methods of communication), tele
phone calls, or other similar methods. Fedwire (the Federal Reserve’s wire transfer net
work), CHIPS (Clearing House Interbank
Payments System, operated by the New York
Clearing House), and book transfers among
banks or within one bank are covered by this
definition. Credits for credit and debit card
transactions are not wire transfers. The term
“wire transfer” excludes “electronic fund
transfers” as that term is defined by the Elec
tronic Fund Transfer Act.

§ 229.3

SECTION 229.3—Administrative
Enforcement
(a) Enforcement agencies. Compliance with
this part is enforced under—
(1) Section 8 of the Federal Deposit Insur
ance Act (12 USC 1818) in the case of—
(i) National banks by the Comptroller
of the Currency;
(ii) Member banks of the Federal Re
serve System (other than national banks)
by the Board; and
(iii) Banks insured by the Federal De
posit Insurance Corporation (other than
members of the Federal Reserve System)
by the Board of Directors of the Federal
Deposit Insurance Corporation;
(2) Section 5(d) of the Home Owners
Loan Act of 1933 (12 USC 1464(d)), sec
tion 407 of the National Housing Act (12
USC 1730), and section 17 of the Federal
Home Loan Bank Act (12 USC 1437), by
the Federal Home Loan Bank Board (act
ing directly or through the Federal Savings
and Loan Insurance Corporation) in the
case of any institution subject to those pro
visions; and
(3) The Federal Credit Union Act (12
USC 1751 et seq.) by the National Credit
Union Administration Board with respect
to any federal credit union or credit union
insured by the National Credit Union Share
Insurance Fund.
(b) Additional powers.
(1) For the purposes of the exercise by any
agency referred to in paragraph (a) of this
•section of its powers under any statute re
ferred to in that paragraph, a violation of
any requirement imposed under the act is
deemed to be a violation of a requirement
imposed under that statute.
(2) In addition to its powers under any
provision of law specifically referred to in
paragraph (a) of this section, each of the
agencies referred to in that paragraph may
exercise, for purposes of enforcing compli
ance with any requirement imposed under
this part, any other authority conferred on
it by law.
(c) Enforcement by the Board.
(1) Except to the extent that enforcement

Regulation CC

of the requirements imposed under this part
is specifically committed to some other gov
ernment agency, the Board shall enforce
such requirements.
(2) If the Board determines that—
(i) Any bank that is not a bank de
scribed in paragraph (a) of this section;
or
(ii) Any other person subject to the au
thority of the Board under the act and
this part,
has failed to comply with any requirement
imposed by this part, the Board may issue
an order prohibiting any bank, any Federal
Reserve Bank, or any other person subject
to the authority of the Board from engaging
in any activity or transaction that directly
or indirectly involves such noncomplying
bank or person (including any activity or
transaction involving the receipt, payment,
collection, and clearing of checks, and any
related function of the payment system with
respect to checks.)

Regulation CC

SUBPART B—AVAILABILITY OF
FUNDS A N D DISCLOSURE OF
FUNDS-AVAILABILITY POLICIES

SECTION 229.10—Next-Day
Availability
(a) Cash deposits.
(1) A bank shall make funds deposited in
an account by cash available for withdrawal
not later than the business day after the
banking day on which the cash is deposited,
if the deposit is made in person to an em
ployee of the depositary bank.
(2) A bank shall make funds deposited in
an account by cash available for withdrawal
not later than the second business day after
the banking day on which the cash is depos
ited, if the deposit is not made in person to
an employee of the depositary bank.
(b) Electronic payments.
(1) In general. A bank shall make funds
received for deposit in an account by an
electronic payment available for withdrawal
not later than the business day after the
banking day on which the bank received the
electronic payment.
(2) When an electronic payment is re
ceived. An electronic payment is received
when the bank receiving the payment has
received both—
(i) Payment in actually and finally col
lected funds; and
(ii) Information on the account and
amount to be credited.
A bank receives an electronic payment only
to the extent that the bank has received
payment in actually and finally collected
funds.
(c) Certain check deposits.
(1) General rule. A depositary bank shall
make funds deposited in an account by
check available for withdrawal not later
than the business day after the banking day
on which the funds are deposited, in the
case of—
(i) A check drawn on the Treasury of
the United States and deposited in an ac
count held by a payee of the check;

§229.10

(ii) A U.S. Postal Service money order
deposited—
(A) In an account held by a payee of
the money order; and
(B) In person to an employee of the
depositary bank.
(iii) A check drawn on a Federal Re
serve Bank or Federal Home Loan Bank
and deposited—
(A) In an account held by a payee of
the check; and
(B) In person to an employee of the
depositary bank;
(iv) A check drawn by a state or
a unit of general local government and
deposited—
(A) In an account held by a payee of
the check;
(B) In a depositary bank located in
the state that issued the check, or the
same state as the unit of general local
government that issued the check;
(C) In person to an employee of the
depositary bank; and
(D) With a special deposit slip or de
posit envelope, if such slip or envelope
is required by the depositary bank un
der paragraph (c)(3) of this section.
(v) A cashier’s, certified, or teller’s
check deposited—
(A) In an account held by a payee of
the check;
(B) In person to an employee of the
depositary bank; and
(C) With a special deposit slip or de
posit envelope, if such slip or envelope
is required by the depositary bank un
der paragraph (c)(3) of this section.
(vi) A check deposited in a branch of
the depositary bank and drawn on the
same or another branch of the same bank
if both branches are located in the same
state or the same check-processing re
gion; and,
(vii) The lesser of—
(A) $100, or
(B) The aggregate amount deposited
on any one banking day to all accounts
of the customer by check or checks not
subject to next-day availability under
paragraphs (c) ( 1) (i) through (vi) of
this section.
19

§ 229.10

(2) Checks not deposited in person. A de
positary bank shall make funds deposited in
an account by check or checks available for
withdrawal not later than the second busi
ness day after the banking day on which
funds are deposited, in the case of a check
deposit described in and that meets the re
quirements of paragraphs (c )(l)(ii), (iii),
(iv), and (v), of this section, except that it
is not deposited in person to an employee of
the depositary bank.
(3) Special deposit slip.
(i) As a condition to making the funds
available for withdrawal in accordance
with this section, a depositary bank may
require that a state or local government
check or a cashier’s, certified, or teller’s
check be deposited with a special deposit
slip or deposit envelope that identifies the
type of check.
(ii) If a depositary bank requires the use
of a special deposit slip or deposit enve
lope, the bank must either provide the
special deposit slip or deposit envelope to
its customers or inform its customers
how the slip or envelope may be prepared
or obtained and make the slip or enve
lope reasonably available.

Regulation CC

§ 229.10

Regulation CC Commentary
COM M ENTARY

S E C T I O N 2 2 9 .1 0 — N e x t - D a y
A v a ila b ility
1 0 (a )

C a sh D e p o s its

This paragraph implements the act’s require
ment for next-day availability for cash depos
its to accounts at a depositary bank “staffed
by individuals employed by such institution.”2
This paragraph, as well as other provisions of
this subpart governing the availability of
funds, provides that funds must be made
available for withdrawal not later than a spec
ified number of business days following the
banking day on which the funds are deposited.
Thus, a deposit is only considered made on a
banking day, i.e., a day that the bank is open
to the public for carrying on substantially all
of its banking functions. For example, if a de
posit is made at an ATM on a Saturday, Sun
day, or other day on which the bank is closed
to the public, the deposit is considered re
ceived on that bank’s next banking day.
Nevertheless, business days are used to de
termine the number of days following the
banking day of deposit that funds must be
available for withdrawal. For example, if a de
posit of a local check were made on a Monday
under the temporary schedule, which requires
that funds be available for withdrawal on the
third business day after deposit, funds must be
made available on Thursday regardless of
whether the bank was closed on Wednesday
for other than a standard legal holiday as
specified in the definition of “business day.”
Under this paragraph, cash deposited in an
account at a staffed teller station on a Monday
must become available for withdrawal by the
start of business on Tuesday. It must become
available for withdrawal by the start of busi
ness on Wednesday if it is deposited by mail,
at a proprietary ATM (or at a nonproprietary
ATM under the permanent schedule), or by
other means other than at a staffed teller
station.
2 Nothing in the act or this regulation affects terms of
account arrangements, such as negotiable order o f with
drawal accounts, which may require prior notice of with
drawal. (See 12 CFR 2 0 4 .2 (e)(2 ).)

1 0 (b )

E le c tr o n ic P a y m e n ts

The act provides next-day availability for
funds received for deposit by wire transfer.
The regulation uses the term “electronic pay
ment,” rather than “wire transfer,” to include
both wire transfers and ACH credit transfers
under the next-day availability requirement.
(See the discussion of definitions of “automat
ed clearinghouse,” “electronic payment,” and
“wire transfer” in section 229.2.)
The act requires that funds received by wire
transfer be available for withdrawal not later
than the business day following the day a wire
transfer is received. This paragraph clarifies
what constitutes receipt of an electronic pay
ment. For the purposes of this paragraph, a
bank receives an electronic payment when the
bank receives both payment in finally collect
ed funds and the payment instructions indi
cating the customer accounts to be credited
and the amount to be credited to each ac
count. For example, in the case of Fedwire,
the bank receives finally collected funds at the
time the payment is made. (See 12 CFR
210.36.) Finally collected funds generally are
received for an ACH credit transfer when
they are posted to the receiving bank’s ac
count on the settlement day. In certain cases,
the bank receiving ACH credit payments will
not receive the specific payment instructions
indicating which accounts to credit until after
settlement day. In these cases, the payments
are not considered received until the informa
tion on the account and amount to be credited
is received.
This paragraph also establishes the extent
to which an electronic payment is considered
made. Thus, if a participant on a private net
work fails to settle and the receiving bank re
ceives finally settled funds representing only a
partial amount of the payment, it must make
only the amount that it actually received
available for withdrawal.
The availability requirements of this regula
tion do not preempt or invalidate other rules,
regulations, or agreements which require
funds to be made available on a more prompt
basis. For example, the next-day availability
requirement for ACH credits in this section
does not preempt ACH association rules and
Treasury regulations (31 CFR 210) which

§229.10

provide that the proceeds of these credit pay
ments be available to the recipient for with
drawal on the day the bank receives the funds.

10(c) Certain Check Deposits
The act generally requires that funds be made
available on the business day following the
banking day of deposit for Treasury checks;
state and local government checks; cashier’s,
certified, and teller’s checks; and on-us
checks, under specified conditions. (Treasury
checks are checks drawn on the Treasury of
the United States and have a routing number
beginning with the digits “0000.”) This sec
tion also requires next-day availability for ad
ditional types of checks not addressed in the
act. Checks drawn on a Federal Reserve Bank
or a Federal Home Loan Bank and U.S. Post
al Service money orders must also be made
available on the next business day following
deposit under specified conditions. For the
purposes of this section, all checks drawn on a
Federal Reserve Bank or Federal Home Loan
Bank are subject to the next-day availability
requirement if they are deposited in an ac
count held by a payee of the check and in
person to an employee of the depositary bank,
regardless of the purpose for which the checks
were issued.
Deposit in Account of Payee
One statutory condition to receipt of next-day
availability of Treasury checks; state and local
government checks; and cashier’s, certified,
and teller’s checks is that the check must be
“endorsed only by the person to whom it was
issued.” The act could be interpreted to in
clude a check that has been indorsed in blank
and deposited into an account of a third party
that is not named as payee. The Board be
lieves that such a check presents greater risks
than a check deposited by the payee and that
Congress did not intend to require next-day
availability to such checks. The regulation,
therefore, provides that funds must be avail
able on the business day following deposit
only if the check is deposited in an account
held by a payee of the check. For the purposes
of this section, payee does not include trans
ferees other than named payees. The
22

Regulation CC Commentary

regulation also applies this condition to Postal
Service money orders, and checks drawn on
Federal Reserve Banks and Federal Home
Loan Banks.
Deposit at Staffed, Teller Station
In most cases, next-day availability of the pro
ceeds of checks subject to this section is condi
tioned on the deposit of these checks in person
to an employee of the depositary bank. If the
deposit is made at a proprietary ATM (and at
a nonproprietary ATM under the permanent
schedule), night depository, or through the
mail, rather than at a staffed teller facility, the
proceeds of the deposit must be available for
withdrawal by the start of business on the sec
ond business day after deposit, under para
graph (c) ( 2 ) of this section.
The act and regulation do not condition the
receipt of next-day availability to deposits at
staffed teller stations in the case of Treasury
checks. Therefore, Treasury checks deposited
at a proprietary ATM must be accorded nextday availability, if the check is deposited to an
account of a payee of the check.
On-Us Checks
The act and regulation require next-day avail
ability for on-us checks, i.e., checks deposited
in a branch of the depositary bank and drawn
on the same or another branch of the same
bank, if both branches are located in the same
state or check-processing region. Thus, checks
deposited in one branch of a bank and drawn
on another branch of the same bank must re
ceive next-day availability even if the branch
on which the checks are drawn is located in
another check-processing region but in the
same state as the branch in which the check is
deposited. For the purposes of this require
ment, deposits at facilities that are not located
on the premises of a brick-and-mortar branch
of the bank, such as off-premise ATMs and
remote depositories, are not considered depos
its made at branches of the depositary bank.
First $100
The act and regulation also require that up to
$100 of the aggregate deposit by check or

§229.10

Regulation CC Commentary

checks not subject to next-day availability on
any one banking day be made available on the
next business day. For example, if $70 were
deposited in an account by check(s) on a
Monday, the entire $70 must be available for
withdrawal at the start of business on Tues
day. If $200 were deposited by check(s) on a
Monday, this section requires that $100 of the
funds be available for withdrawal at the start
of business on Tuesday. The portion of the
customer’s deposit to which the $100 must be
applied is at the discretion of the depositary
bank, as long as it is not applied to any checks
subject to next-day availability. The $100
next-day availability rule does not apply to de
posits at nonproprietary ATMs.
The $100 that must be made available un
der this rule is in addition to the amount that
must be made available for withdrawal on the
business day after deposit under other provi
sions of this section. For example, if a custom
er deposits a $1,000 Treasury check and a
$1,000 local check in its account on Monday,
$ 1,100 must be made available for withdrawal
on Tuesday—the proceeds of the $1,000 Trea
sury check, as well as the first $100 of the
local check.
A depositary bank may aggregate all local
and nonlocal check deposits made by the cus
tomer on a given banking day for the purposes
of the $100 next-day availability rule. Thus, if
a customer has two accounts at the depositary
bank, and on a particular banking day makes
deposits to each account, $100 of the total de
posited to the two accounts must be made
available on the business day after deposit.
Banks may aggregate deposits to individual
and joint accounts for the purposes of this
provision.
If the customer deposits a $500 local check
and gets $100 cash back at the time of deposit,
the bank need not make an additional $100
available for withdrawal on the following day.
Similarly, if the customer depositing the local
check has a negative book balance, or negative
available balance in its account at the time of
deposit, the $100 that must be available on the
next business day may be made available by
applying the $100 to the negative balance,
rather than making the $100 available for
withdrawal by cash or check on the following
day.

Feesfor Withdrawals
A depositary bank may not impose a fee on a
customer if the fee is based on the fact that the
customer has withdrawn funds for which the
bank has not received credit, if the funds must
be made available for withdrawal under this
subpart.
Special Deposit Slips
Under the act, a depositary bank may require
the use of a special deposit slip as a condition
to providing next-day availability for certain
types of checks. This condition was included
in the act because a number of banks deter
mine the availability of their customers’ check
deposits in an automated manner by reading
the MICR-encoded routing number on the de
posited checks. Using these procedures, a
bank can determine whether a check is a local
or nonlocal check; a check drawn on the Trea
sury, a Federal Reserve Bank, a Federal
Home Loan Bank, or a branch of the deposi
tary bank; or a U.S. Postal Service money or
der. Appendix A includes the routing num
bers of certain categories of checks that are
subject to next-day availability. The bank can
not require a special deposit slip for these
checks.
A bank cannot distinguish whether the
check is a state or local government check or
a cashier’s, certified, or teller’s check by read
ing the MICR-encoded routing number, be
cause these checks bear the same routing
number as other checks drawn on the same
bank that are not accorded next-day availabil
ity. Therefore, a bank may require a special
deposit slip for these checks.
The regulation specifies that if a bank de
cides to require the use of a special deposit
slip (or a special deposit envelope in the case
of a deposit at an ATM or other unstaffed
facility) as a condition to granting next-day
availability under paragraphs (c)(l)(iv ) or
(c) ( 1) (v) of this section or second day avail
ability under paragraph (c )( 2 ) of this section,
and if the deposit slip that must be used is
different from the bank’s regular deposit slips,
the bank must either provide the special slips
to its customers or inform its customers how
such slips may be obtained and make the slips
reasonably available to the customers.
23

§229.10
A bank may meet this requirement by pro
viding customers with an order form for the
special deposit slips and allowing sufficient
time for the customer to order and receive the
slips before this condition is imposed. If a
bank provides deposit slips in its branches for
use by its customers, it must also provide the
special deposit slips in the branches. If special
deposit envelopes are required for deposits at
an ATM, the bank must provide such enve
lopes at the ATM.
Generally, a teller is not required to advise
depositors of the availability of special deposit
slips merely because checks requiring special
deposit slips for next-day availability are de
posited without such slips. If a bank only pro
vides the special deposit slips upon the request
of a depositor, however, the teller must advise
the depositor of the availability of the special
deposit slips. If a bank prepares a deposit for a
depositor, it must use a special deposit slip
where appropriate. A bank may require the
customer to segregate the checks subject to
next-day availability for which special deposit
slips could be required, and to indicate on a
regular deposit slip that such checks are being
deposited, if the bank so instructs its custom
ers in its initial disclosure.

Regulation CC Commentary

Regulation CC

SECTION 229.11—Temporary
Availability Schedule

§229.11

drawal by cash or similar means not later
than 5:00 p.m. on the third business day
following the banking day on which the
funds are deposited. This $400 is in addi
tion to the $100 available under section
229.10(c) (l)(vii).

(a) Effective date. The temporary availability
schedule contained in this section is effective
from September 1, 1988, through August 31,
1990. For the permanent availability schedule,
which is effective September 1, 1990, see sec (c) Nonlocal checks.
tion 229.12.
(1) In general. A depositary bank shall
make
funds deposited in an account by a
(b) Local checks and certain other checks.
check available for withdrawal not later
(1) In general. A depositary bank shall
than the seventh business day following the
make funds deposited in an account by a
banking
day on which funds are deposited,
check available for withdrawal not later
in
the
case
of—
than the third business day following the
(i) A nonlocal check; and
banking day on which funds are deposited,
(ii) A check drawn on a Federal Re
in the case of—
serve
Bank or Federal Home Loan Bank;
(i) A local check;
a
check
drawn by a state or unit of gener
(ii) A check drawn on the Treasury of
al local government; a cashier’s, certified,
the United States that is not governed by
or teller’s check; or a check deposited in
the availability requirements of section
a branch of the depositary bank and
229.10(c);
drawn on the same or another branch of
(iii) A U.S. Postal Service money order
the same bank, if any check referred to in
that is not governed by the availability
this paragraph (c )( 1) (ii) is a nonlocal
requirements of section 229.10(c); and
check
that is not governed by the avail
(iv) A check drawn on a Federal Re
ability
requirements of section 229.10(c).
serve Bank or Federal Home Loan Bank;
(2) Reduction in schedule for certain check
a check drawn by a state or unit of gener
deposits. Nonlocal checks specified in ap
al local government; or a cashier’s, certi
pendix B-l to this part must be made avail
fied, or teller’s check; if any check re
able for withdrawal not later than the times
ferred to in this paragraph (b) ( 1) (iv) of
prescribed in that appendix.
this section is a local check that is not
governed by the availability requirements (d) Deposits at nonproprietary ATMs. A de
of section 229.10(c).
positary bank shall make funds deposited in
(2) Time period adjustment for withdrawal an account at a nonproprietary ATM by cash
by cash or similar means. A depositary bank or check available for withdrawal not later
may extend by one business day the time than the seventh business day following the
that funds deposited in an account by one banking day on which the funds are deposited.
or more local checks are available for with
drawal by cash or similar means unless the (e) Extension of schedule for certain deposits
checks are drawn on or payable at or in Alaska, Hawaii, Puerto Rico, and the U.S.
through a local paying bank that is a partic Virgin Islands. The depositary bank may ex
ipant in the same check clearinghouse asso tend the time periods set forth in this section
ciation as the depositary bank. Similar by one business day in the case of any deposit,
means include electronic payment, issuance other than a deposit described in section
of a cashier’s or teller’s check, certification 229.10, that is—
(1) Deposited in an account at a branch of
of a check, or other irrevocable commit
a depositary bank if the branch is located in
ment to pay, but do not include the grant
ing of credit to a bank, Federal Reserve
Alaska, Hawaii, Puerto Rico, or the U.S.
Bank, or Federal Home Loan Bank that
Virgin Islands; and
presents a check to the depositary bank for
(2) Deposited by a check drawn on or pay
able at or through a paying bank not locat
payment. A depositary bank shall, however,
ed in the same state as the depositary bank.
make $400 of these funds available for with
25

§229.11

COMMENTARY
SECTION 229.11—Temporary
Availability Schedule
11 (a) Effective Date
Checks, other than those that must be accord
ed next-day availability, are categorized as
either local or nonlocal, with different avail
ability schedules attached to each. These
schedules are effective on September 1, 1988,
and will be superseded by more stringent
schedules on September 1, 1990.
11 (b) Local Checks and Certain Other
Checks
This paragraph sets forth the maximum hold
period that can be placed on local checks dur
ing the temporary schedule. The regulation
refers to the day on which funds must be
available for withdrawal as within a specified
number of business days after deposit, rather
than after a specified number of intervening
business days, as provided in the act. A depos
itary bank must make funds from the deposit
of a local check available on the third business
day following the banking day on which the
check is deposited. This requirement corre
sponds to the two intervening business days
specified in the act. Thus, under the tempo
rary schedule, a local check deposited on a
Monday must be available for withdrawal on
Thursday, except in the case of deposits at
nonproprietary ATMs and deposits to ac
counts in banks located outside the 48 contig
uous states.
The regulation provides that Treasury
checks and U.S. Postal Service money orders
be treated as local checks, where the condi
tions to receiving next-day (or second-day)
availability in section 229.10(c) are not met.
These checks are treated as local checks be
cause they are payable at any Federal Reserve
office. Thus, a Treasury check or a postal
money order that is indorsed and deposited in
an account not held by the payee must be
made available in accordance with the sched
ule for local checks.
Other types of checks described in section
229.10(c), such as checks drawn on a Federal
Reserve Bank or Federal Home Loan Bank;
26

Regulation CC Commentary

state and local government checks; and cash
ier’s, certified, and teller’s checks for which
next-day availability does not apply (e.g., be
cause they were not deposited in an account of
a payee of the check), are treated as either
local or nonlocal checks, depending on the
check-processing region in which they are
payable.
Time Period Adjustment for Withdrawal by
Cash
The act provides an adjustment to the avail
ability rules for cash withdrawals. During the
temporary schedule, the act provides that
funds from local checks that are drawn on or
payable at or through a paying bank that is
not a participant in the same check clearing
house association as the depositary bank need
not be available for cash withdrawal until 5:00
p.m. on the day specified in the schedule. At
5:00 p.m., $400 of the deposit must be made
available for cash withdrawal. This $400 is in
addition to the first $100 of a day’s deposit,
which must be made available for withdrawal
at the start of business on the next business
day following the banking day of deposit. The
remainder of the funds must be available for
cash withdrawal at the start of business on the
business day following the business day speci
fied in the schedule. This special rule does not,
under the temporary schedule, apply to de
posits of local checks cleared through a check
clearinghouse association or to nonlocal
checks.
The act recognizes that the $400 that must
be provided on the day specified in the sched
ule may exceed a bank’s daily ATM cash
withdrawal limit, and explicitly provides that
the act does not supersede the bank’s policy
in this regard. The Board believes that the ra
tionale for accommodating a bank’s ATM
withdrawal limit also applies to other cash
withdrawal limits established by that bank.
Section 229.19(c)(4) of the regulation ad
dresses the relation between a bank’s cashwithdrawal limit (for over-the-counter cash
withdrawals as well as ATM cash withdraw
als) and the requirements of this subpart.
The Board believes that the Congress
included this special cash withdrawal rule to
provide a depositary bank with additional

Regulation CC Commentary

time to learn of the nonpayment of a check
before it must make funds available to its cus
tomer. If a customer deposits a local check on
a Monday, and that check is returned by the
paying bank, the depositary bank may receive
the returned check on Thursday (the day
funds must be made available under the tem
porary schedule), but may not receive the re
turned check by the start of business on
Thursday. Checks written by the customer
that are presented to the depositary bank on
Thursday are typically not posted to the cus
tomer’s account until late Thursday night.
Any returned checks that have been received
on that day are debited to the customer’s ac
count before the checks being presented are
posted. Thus, for the purpose of checks writ
ten by the customer, the fact that a return is
not received until sometime during the day on
which funds must be made available does not
increase the bank’s risk.
Nonetheless, the depositary bank’s risk
does increase significantly if the customer
withdraws the funds in cash, because the
withdrawal may occur before the return is re
ceived and posted. The intent of the special
cash withdrawal rule is to minimize this risk
to the depositary bank.
For this rule to minimize the depositary
bank’s risk, it must apply not only to cash
withdrawals, but also to withdrawals by other
means that result in an irrevocable debit to
the customer’s account or commitment to pay
by the bank on the customer’s behalf during
the day. Thus, the cash withdrawal rule also
includes withdrawals by electronic payment,
issuance of a cashier’s or teller’s check, certifi
cation of a check, or other irrevocable com
mitment to pay, such as authorization of an
on-line point-of-sale debit. The rule would
also apply to checks presented over-the-coun
ter for payment on the day of presentment by
the depositor or another person. Such checks
could not be dishonored for insufficient funds
if an amount sufficient to cover the check had
become available for cash withdrawal under
this rule; however, payment of such checks
would be subject to the bank’s cut-off hour
established under UCC section 4—107. The
cash withdrawal rule does not apply to checks
and other provisional debits presented to the

§229.11

bank for payment that the bank has the right
to return.
11 (c) Nonlocal Checks
Under the temporary schedule, funds deposit
ed by nonlocal checks must be made available
for withdrawal not later than the seventh
business day following the banking day the
funds are deposited, except in the case of de
posits at nonproprietary ATMs or in accounts
of banks located outside the 48 contiguous
states. Thus, funds from a nonlocal check de
posited on a Monday must be available for
withdrawal by Wednesday of the following
week. The act does not establish a special rule
for cash withdrawals for nonlocal checks un
der the temporary schedule. Therefore, sub
ject to section 229.19(c), the full amount of
the deposit becomes available for withdrawal
at the start of business on the business day
specified in the schedule.
A reduction in schedules may apply even in
those cases where the determination that the
check is nonlocal cannot be made based on
the routing number on the check. For exam
ple, a nonlocal credit-union payable-through
share draft may be subject to a reduction in
schedules if the routing number of the pay
able-through bank which appears on the draft
is included in appendix B, even though the
determination that the payable-through share
draft is nonlocal is based on the location of
the credit union and not the routing number
on the draft.
Reduction in Schedules
Section 603(d)(1) of the act (12 USC
4002(d)(1)) requires the Board to reduce the
statutory schedules for any category of checks
where most of those checks would be returned
in a shorter period of time than provided in
the schedules. The conferees indicated that “if
the new system makes it possible for twothirds of the items of a category of checks to
meet this test in a shorter period of time, then
the Federal Reserve must shorten the sched
ules accordingly” (H.R. Rep. No. 261, 100th
Cong., 1st Sess. 179 (1987)).
Reduced schedules are provided for certain
nonlocal checks where significant improve
ments can be made to the act’s schedules. Spe27

§229.11

cifically, shorter schedules are provided for
checks deposited in banks located in certain
Federal Reserve cities and drawn on or pay
able at or through banks located in certain
other Federal Reserve cities, where transpor
tation arrangements allow for faster collection
and return. In addition, shorter schedules are
provided for checks drawn on or payable at or
through certain banks that are served by two
Federal Reserve offices, and for certain checks
deposited in and drawn on or payable at or
through banks in the New York City metro
politan area, where the proximity of the Fed
eral Reserve offices facilitates faster clearing
and return of these checks.
Appendix B-l sets forth the specific reduc
tion of schedules applicable to banks located
in each check-processing region.
11 (d) Deposits at Nonproprietary
ATMs
The act and regulation provide a special rule
for deposits made at nonproprietary ATMs.
Notwithstanding other provisions of the regu
lation concerning availability requirements,
during the temporary schedule, a depositary
bank may treat all deposits made by its cus
tomers at a nonproprietary ATM as though
the deposits were nonlocal checks. A deposit
at a nonproprietary ATM on a Monday, in
cluding any deposit by cash or checks that
would otherwise be subject to next-day avail
ability, must be made available for withdrawal
not later than Wednesday of the following
week. This rule does not apply to deposits
made at proprietary ATMs.1
11 (e) Extension of Schedule for Certain
Deposits in Alaska, Hawaii, Puerto Rico,
and the U.S. Virgin Islands
The act and regulation provide an extension
of the availability schedules for check deposits
at a branch of a bank if the branch is located
in Alaska, Hawaii, Puerto Rico, or the U.S.
Virgin Islands. The schedules for local checks,
nonlocal checks (including nonlocal checks
subject to the reduced schedules of appendix
B), and deposits at nonproprietary ATMs are
extended by one business day for checks de
posited to accounts in banks located in these
jurisdictions that are drawn on or payable at
28

Regulation CC Commentary

or through a paying bank not located in the
same jurisdiction as the depositary bank. For
example, a check deposited in a bank in Ha
waii and drawn on a San Francisco paying
bank must be made available for withdrawal
not later than the fourth business day follow
ing deposit. This extension does not apply to
deposits that must be made available for with
drawal on the next business day.
The Congress did not provide this extension
of the schedules to checks drawn on a paying
bank located in Alaska, Hawaii, Puerto Rico,
or the U.S. Virgin Islands and deposited in an
account at a depositary bank in the 48 contig
uous states. Therefore, a check deposited in a
San Francisco bank drawn on a Hawaii pay
ing bank must be made available for with
drawal not later than the third rather than the
fourth business day following deposit.

Regulation CC

SECTION 229.12—Permanent
Availability Schedule
(a) Effective date. The permanent availability
schedule contained in this section is effective
September 1, 1990.
(b) Local checks and certain other checks. A
depositary bank shall make funds deposited in
an account by a check available for withdraw
al not later than the second business day fol
lowing the banking day on which funds are
deposited, in the case of—
(1) A local check;
(2) A check drawn on the Treasury of the
United States that is not governed by the
availability requirements of section
229.10(c);
(3) A check drawn on the Treasury of the
United States that is deposited at a nonpro
prietary ATM;
(4) A U.S. Postal Service money order
that is not governed by the availability re
quirements of section 229.10(c); and
(5) A check drawn on a Federal Reserve
Bank or Federal Home Loan Bank; a check
drawn by a state or unit of general local
government; or a cashier’s, certified, or tell
er’s check; if any check referred to in this
paragraph (b)(5) is a local check that is
not governed by the availability require
ments of section 229.10(c).
(c) Nonlocal checks.
(1) In general. A depositary bank shall
make funds deposited in an account by a
check available for withdrawal not later
than the fifth business day following the
banking day on which funds are deposited,
in the case of—
(i) A nonlocal check; and
(ii) A check drawn on a Federal Re
serve Bank or Federal Home Loan Bank;
a check drawn by a state or unit of gener
al local government; a cashier’s, certified,
or teller’s check; or a check deposited in
a branch of the depositary bank and
drawn on the same or another branch of
the same bank, if any check referred to in
this paragraph (c) ( 1) (ii) is a nonlocal
check that is not governed by the avail
ability requirements of section 229.10(c).
(2) Nonlocal checks specified in appendix

§229.12

B-2 to this part must be made available for
withdrawal not later than the times pre
scribed in that appendix.
(d) Time period adjustment for withdrawal
by cash or similar means. A depositary bank
may extend by one business day the time that
funds deposited in an account by one or more
checks subject to paragraphs (b) or (c) of
this section are available for withdrawal by
cash or similar means. Similar means include
electronic payment, issuance of a cashier’s or
teller’s check, or certification of a check, or
other irrevocable commitment to pay, but do
not include the granting of credit to a bank, a
Federal Reserve Bank, or a Federal Home
Loan Bank that presents a check to the depos
itary bank for payment. A depositary bank
shall, however, make $400 of these funds
available for withdrawal by cash or similar
means not later than 5:00 p.m. on the business
day on which the funds are available under
paragraphs (b) and (c) of this section. This
$400 is in addition to the $100 available under
section 229.10(c)(1) (vii).
(e) Extension of schedule for certain deposits
in Alaska, Hawaii, Puerto Rico, and the U.S.
Virgin Islands. The depositary bank may ex
tend the time periods set forth in this section
by one business day in the case of any deposit,
other than a deposit described in section
229.10, that is—
(1) Deposited in an account at a branch of
a depositary bank if the branch is located in
Alaska, Hawaii, Puerto Rico, or the U.S.
Virgin Islands; and
(2) Deposited by a check drawn on or pay
able at or through a paying bank not locat
ed in the same state as the depositary bank.

§229.12

COMMENTARY
SECTION 229.12—Permanent
Availability Schedule
12(a) Effective Date
The permanent schedule supersedes the tem
porary schedule on September 1, 1990.
12(b) Local Checks and Certain Other
Checks
Under the permanent schedule, local checks
must be made available for withdrawal not
later than the second business day following
the banking day on which the checks were
deposited.
In addition, the proceeds of Treasury
checks and U.S. Postal Service money orders
not subject to next-day (or second-day) avail
ability under section 229.10(c); Treasury
checks deposited in nonproprietary ATMs;
checks drawn on Federal Reserve Banks and
Federal Home Loan Banks; checks drawn by
a state or unit of general local government;
and cashier’s, certified, and teller’s checks not
subject to next-day (or second-day) availabil
ity under section 229.10(c) and payable in the
same check-processing region as the deposi
tary bank, must be made available for with
drawal by the second business day following
deposit.
Exceptions are made for withdrawals by
cash or similar means and for deposits in
banks located outside the 48 contiguous
states. Thus, the proceeds of a local check de
posited on a Monday generally must be made
available for withdrawal on Wednesday.
12(c) Nonlocal Checks
Under'the permanent schedule, the time peri
od for availability of nonlocal checks is also
reduced. Nonlocal checks must be made avail
able for withdrawal not later than the fifth
business day following deposit, i.e., proceeds
of a nonlocal check deposited on a Monday
must be made available for withdrawal on the
following Monday. In addition, a check de
scribed in section 229.10(c) that does not
meet the conditions for next-day availability
(or second-day availability) is treated as a

Regulation CC Commentary

nonlocal check, if the check is drawn on or
payable through or at a nonlocal paying bank.
Adjustments are made to the schedule for
withdrawals by cash or similar means and de
posits in banks located outside the 48 contigu
ous states.
As described in the discussion of section
229.11(c), the Board is required to shorten
the schedules for any category of check where
most of these checks can be returned to the
depositary bank in a shorter period of time
than provided in the schedule. Appendix B-2
sets forth the reductions to the schedule for
certain nonlocal checks under the permanent
schedule.
12(d) Time-Period Adjustment for
Withdrawal by Cash or Similar Means
Unlike the temporary schedule, the act applies
the special cash withdrawal rule to all local
and nonlocal checks under the permanent
schedule. The regulation implementing this
rule is described in the discussion of the tem
porary schedule at section 229.11(b). Under
the permanent schedule, if the proceeds of lo
cal and nonlocal checks become available for
withdrawal on the same business day, the
$400 withdrawal limitation applies to the ag
gregate amount of the funds that became
available for withdrawal on that day.
12(e) Extension of Schedule for Certain
Deposits in Alaska, Hawaii, Puerto Rico,
and the U.S. Virgin Islands
The extension of the availability schedules
provided to check deposits at a branch of a
bank if the branch is located in Alaska, Ha
waii, Puerto Rico, or the U.S. Virgin Islands
under the temporary schedule also applies
when the permanent schedule becomes effec
tive. Explanation of this provision is provided
in the discussion of section 229.11(d).

Regulation CC

SECTION 229.13—Exceptions
(a) New accounts.
(1) A deposit in a new account—
(i) Is subject to the requirements of sec
tion 229.10(a) and (b) to make funds
from deposits by cash and electronic pay
ments available for withdrawal on the
business day following the banking day
of deposit or receipt;
(ii) Is subject to the requirements of sec
tion 229.10(c) (1) (i) through (v) and
section 229.10(c)(2) only with respect
to the first $5,000 of funds deposited on
any one banking day; but the amount of
the deposit in excess of $5,000 shall be
available for withdrawal not later than
the ninth business day following the
banking day on which funds are deposit
ed; and
(iii) Is not subject to the availability re
quirements of sections 229.10(c)(1) (vi)
and (vii), 229.11, and 229.12.
For purposes of this paragraph, checks sub
ject to section 229.10(c) (1) (v) include
traveler’s checks.
(2) An account is considered a new ac
count during the first 30 calendar days after
the account is established. An account is
not considered a new account if each cus
tomer on the account has had, within 30
calendar days before the account is estab
lished, another account at the depositary
bank for at least 30 calendar days.
(b) Large deposits. Sections 229.11 and
229.12 do not apply to the aggregate amount
of deposits by one or more checks to the ex
tent that the aggregate amount is in excess of
$5,000 on any one banking day. For custom
ers that have multiple accounts at a deposi
tary bank, the bank may apply this exception
to the aggregate deposits to all accounts held
by the customer, even if the customer is not
the sole holder of the accounts and not all of
the holders of the accounts are the same.
(c) Redeposited checks. Sections 229.11 and
229.12 do not apply to a check that has been
returned unpaid and redeposited by the cus
tomer or the depositary bank. This exception
does not apply—
(1) To a check that has been returned due

§229.13

to a missing indorsement and redeposited
after the missing indorsement has been ob
tained, if the reason for return indication on
the check states that it was returned due to
a missing indorsement; or
(2) To a check that has been returned be
cause it was postdated, if the reason for re
turn indicated on the check states that it
was returned because it was postdated, and
if the check is no longer postdated when
redeposited.
(d) Repeated overdrafts. If any account or
combination of accounts of a depositary
bank’s customer has been repeatedly over
drawn, then for a period of six months after
the last such overdraft, sections 229.11 and
229.12 do not apply to any of the accounts. A
depositary bank may consider a customer’s
account to be repeatedly overdrawn if —
(1) On six or more banking days within
the preceding six months, the account bal
ance is negative, or the account balance
would have become negative if checks or
other charges to the account had been paid;
or
(2) On two or more banking days within
the preceding six months, the account bal
ance is negative, or the account balance
would have become negative, in the amount
of $5,000 or more, if checks or other
charges to the account had been paid.
(e) Reasonable cause to doubt collectibility.
(1) In general. If a depositary bank has
reasonable cause to believe that the check is
uncollectible from the paying bank, then
section 229.10(c)(1) (iii) and (v); section
229.10(c) (2) to the extent that it applies to
a check drawn on a Federal Reserve Bank
or a Federal Home Loan Bank, or a cash
ier’s, teller’s, or certified check; section
229.11; and section 229.12 do not apply
with respect to a check deposited in an ac
count at a depositary bank. Reasonable
cause to believe a check is uncollectible re
quires the existence of facts that would
cause a well-grounded belief in the mind of
a reasonable person. Such belief shall not be
based on the fact that the check is of a par
ticular class or is deposited by a particular
class of persons. The reason for the bank’s
31

§229.13

belief that the check is uncollectible shall be
included in the notice required under para
graph (g) of this section.
(2) Overdraft and returned-check fees. A
depositary bank that extends the time when
funds will be available for withdrawal as de
scribed in paragraph (e )( 1) of this section,
and does not furnish the depositor with
written notice at the time of deposit shall
not assess any fees for any subsequent over
drafts (including use of a line of credit) or
return of checks of other debits to the ac
count, if —
(i) The overdraft or return of the check
would not have occurred except for the
fact that the deposited funds were de
layed under paragraph (e) ( 1) of this sec
tion; and
(ii) The deposited check was paid by the
paying bank.
Notwithstanding the foregoing, the depositary
bank may assess an overdraft or returnedcheck fee if it includes a notice concerning
overdraft and returned-check fees with the no
tice of exception required in paragraph (g) of
this section and, when required, refunds any
such fees upon the request of the customer.
The overdraft and returned-check notice must
state that the customer may be entitled to a
refund of overdraft or returned-check fees
that are assessed if the check subject to the
exception is paid and how to obtain a refund.
(f) Emergency conditions. Sections 229.11
and 229.12 do not apply to funds deposited by
check in a depositary bank in the case of—
(1) An interruption of communications or
computer or other equipment facilities;
(2) A suspension of payments by another
bank;
(3) A war; or
(4) An emergency condition beyond the
control of the depositary bank,
if the depositary bank exercises such diligence
as the circumstances require.
(g) Notice of exception.
(1) In general. When a depositary bank
extends the time when funds will be avail
able for withdrawal based on the applica
tion of an exception contained in para
graphs (b) through (f) of this section, it
must provide the depositor with a written
32

Regulation CC

notice. The notice shall include the follow
ing information—
(i) The account number of the
customer;
(ii) The date and amount of the deposit;
(iii) The amount of the deposit that is
being delayed;
(iv) The reason the exception was in
voked; and
(v) The day the funds will be available
for withdrawal, unless the emergencyconditions exception in paragraph (f) of
this section has been invoked, and the de
positary bank, in good faith, does not
know the duration of the emergency and,
consequently, when the funds must be
made available at the time the notice
must be given.
(2) Timing of notice.
(i) The notice shall be provided to the
depositor at the time of the deposit, un
less the deposit is not made in person to
an employee of the depositary bank, or, if
the facts upon which a determination to
invoke one of the exceptions in para
graphs (b) through (f) of this section to
delay a deposit only become known to
the depositary bank after the time of the
deposit. If the notice is not given at the
time of the deposit, the depositary bank
shall mail or deliver the notice to the cus
tomer as soon as practicable, but no later
than the first business day following the
day the facts become known to the de
positary bank, or the deposit is made,
whichever is later.
(ii) If the availability of funds is delayed
under the emergency-conditions excep
tion provided in paragraph (f) of this
section, the depositary bank is not re
quired to provide a notice if the funds
subject to the exception become available
before the notice must be sent under par
agraph (g) ( 2 ) (i) of this section.
(3) Record retention. A depositary bank
shall retain a record, in accordance with
section 229.21(g), of each notice provided
pursuant to its application of the reason
able-cause exception under paragraph (e)
of this section, together with a brief state
ment of the facts giving rise to the bank’s

Regulation CC

§229.13

reason to doubt the collectibility of the
check.
(h) Availability of deposits subject to
exceptions.
(1) If an exception contained in para
graphs (b) through (f) of this section ap
plies, the depositary bank may extend the
time periods established under sections
229.11 and 229.12 by a reasonable period of
time.
(2) If a depositary bank invokes an excep
tion under paragraph (e) of this section
based on its reasonable cause to doubt col
lectibility of a check that is subject to sec
tion 229.10(c) (1) (iii) or (v) or section
229.10(c) (2) to the extent that it applies to
a check drawn on a Federal Reserve Bank
or a Federal Home Loan Bank, or a cash
ier’s, teller’s, or certified check, the deposi
tary bank shall make the funds available for
withdrawal not later than a reasonable peri
od after the day the funds would have been
required to be made available had the check
been subject to sections 229.11 or 229.12.
(3) If a depositary bank invokes an excep
tion under paragraph (f) of this section
based on an emergency condition, the de
positary bank shall make the funds avail
able for withdrawal not later than a reason
able period after the emergency has ceased
or the period established in sections 229.11
and 229.12, whichever is later.
(4) For the purposes of paragraphs
(h)(1), (2), and (3) of this section, an ex
tension of up to four business days is a rea
sonable period. An extension of more than
four business days may be reasonable, but
the bank has the burden of so establishing.

§229.13

COMMENTARY
SECTION 229.13—Exceptions
While certain safeguard exceptions (such as
those for new accounts and checks the bank
has reasonable cause to believe are uncollecti
ble) are established in the act, the Congress
gave the Board the discretion to determine
whether certain other exceptions should be in
cluded in its regulations. Specifically, the act
gives the Board the authority to establish ex
ceptions to the schedules for large or redepos
ited checks and for accounts that have been
repeatedly overdrawn. These exceptions do
not apply to checks or other deposits that
must be accorded next-day availability (or
second-day availability, if the deposit is not
made in person to an employee of the deposi
tary bank) under section 229.10.
Many checks will not be returned to the
depositary bank by the time funds must be
made available for withdrawal under the local
and nonlocal schedules. In order to reduce
risk to depositary banks, the Board has exer
cised its statutory authority to adopt these ex
ceptions to the schedules in the regulation to
allow the depositary bank to extend the time
within which it is required to make funds
available. The exceptions provided in this sec
tion apply to the schedules for local and non
local checks during the temporary and perma
nent schedules, and, in limited cases, to the
next-day availability requirement for certain
check deposits.
The act also gives the Board the authority
to suspend the schedules for any classification
of checks, if the schedules result in an unac
ceptable level of fraud losses. The Board will
adopt regulations or issue orders to imple
ment this statutory authority if and when cir
cumstances requiring its implementation
arise.
13(a) New Accounts
Definition o f New Account
The act provides an exception to the availabil
ity schedule for new accounts. An account is
defined as a new account during the first 30
calendar days after the account is opened. An
account is open when the first deposit is made

Regulation CC Commentary

to the account. An account is not considered a
new account, however, if each customer on
the account has a transaction-account rela
tionship with the depositary bank, including a
dormant account, that is at least 30 calendar
days old on September 1, 1988, or at any time
thereafter (i.e., an established account), or
has had an established account with the de
positary bank within the 30 calendar days pri
or to opening the account.
The following are examples of what consti
tutes, and does not constitute, a new account:
1. If the customer has an established account
with a bank and opens a second account
with the bank, the second account is not
subject to the new account exception.
2. If a customer’s account were closed and
another account opened as a successor to
the original account (due, for example, to
the theft of checks or a debit card used to
access the original account), the successor
account is not subject to the new account
exception, assuming the previous account
relationship is at least 30 days old. Similar
ly, if a customer closed an established ac
count and opens a separate account within
30 days, the new account is not subject to
the new-account exception.
3. If a customer has a savings deposit or other
deposit that is not an account (as that term
is defined in section 229.2(a)) at the bank,
and opens an account, the account may be
subject to the new-account exception.
4. If a person that is authorized to sign on a
corporate account (but has no other rela
tionship with the bank) opens a personal
account, the personal account is subject to
the new-account exception.
5. If a customer has an established joint ac
count at a bank, and subsequently opens an
individual account with that bank, the in
dividual account is not subject to the newaccount exception.
6 . If two customers that each have an estab
lished individual account with the bank
open a joint account, the joint account is
not subject to the new-account exception.
If one of the customers on the account has
no current or recent established account
relationship with the bank, however, the
joint account is subject to the new-account

Regulation CC Commentary

exception, even if the other individual on
the account has an established account re
lationship with the bank.

§229.13

day do not apply during the new-account
period.
Representation by Customer

Rules Applicable to New Accounts
During the new-account exception period, the
schedules for local and nonlocal checks do not
apply, and, unlike the other exceptions pro
vided in this section, the regulation provides
no maximum time frames within which the
proceeds of these deposits must be made avail
able for withdrawal. Maximum times within
which funds must be available for withdrawal
during the new-account period are provided,
however, for certain other deposits. Deposits
received by cash and electronic payments
must be made available for withdrawal in ac
cordance with section 229.10.
Special rules also apply to deposits of Trea
sury checks; U.S. Postal Service money or
ders; checks drawn on Federal Reserve Banks
and Federal Home Loan Banks; state and lo
cal government checks; cashier’s, certified,
and teller’s checks; and, for the purposes of
the new-account exception only, traveler’s
checks. The first $5,000 of funds deposited to
a new account on any one banking day by
these check deposits must be made available
for withdrawal in accordance with section
229.10(c). Thus, the first $5,000 of the pro
ceeds of these check deposits must be made
available on the next business day following
deposit, if the deposit is made in person to an
employee of the depositary bank and the other
conditions of next-day availability are met.
Funds must be made available on the second
business day after deposit for deposits that are
not made over the counter, in accordance
with section 229.10(c)(2). (Proceeds of
Treasury-check deposits must be made avail
able on the next business day after deposit,
even if the check is not deposited in person to
an employee of the depositary bank.) Funds
in excess of the first $5,000 deposited by these
types of checks on a banking day must be
available for withdrawal not later than the
ninth business day following the banking day
of deposit. The requirements of section
229.10(c) (1) (vi) and (vii) that on-us checks
and the first $100 of a day’s deposit be made
available for withdrawal on the next business

The depositary bank may rely on the repre
sentation of the customer that the customer
has no established account relationship with
the bank, and has not had any such account
relationship within the past 30 days, to deter
mine whether an account is subject to the
new-account exception.
13(b) Large Deposits
Under the large-deposit exception, a deposi
tary bank may extend the hold placed on local
and nonlocal check deposits to the extent that
the amount of the aggregate deposit on any
banking day exceeds $5,000. While the first
$5,000 of a day’s deposit is subject to the
availability provided for local or nonlocal
checks, the amount in excess of $5,000 may be
held for an additional period of time as pro
vided in section 229.13(h). Deposits by cash,
electronic payment, or checks that must be
granted next-day (or second-day) availability
under section 229.10 are not subject to this
exception for large deposits.
The following example illustrates the opera
tion of the large-deposit exception. If a cus
tomer deposits a $10,000 Treasury check and
a $9,000 local check on a Monday, $10,100
(the proceeds of the Treasury check and the
first $100 of the local check) must be made
available for withdrawal on Tuesday. An ad
ditional $4,900 of the proceeds of the local
check must be available for withdrawal in ac
cordance with the local schedule (i.e., Thurs
day under the temporary schedule), and the
remaining $4,000 may be held for an addition
al period of time under the large-deposit
exception.
Where a customer has multiple accounts
with a depositary bank, the bank may apply
the large-deposit exception to the aggregate
deposits to all of the customer’s accounts,
even if the customer is not the sole holder of
the accounts and not all of the holders of the
customer’s accounts are the same. Thus, a de
positary bank may aggregate the deposits
made to two individual accounts in the same
name, to an individual and a joint account
35

§229.13

with one common name, or to two joint ac
counts with at least one common name for the
purpose of applying the large-deposit excep
tion. Aggregation of deposits to multiple ac
counts is permitted because the Board believes
that the risk to the depositary bank associated
with large deposits is similar regardless of
how the deposits are allocated among the cus
tomer’s accounts.
13 (c) Redeposited Checks
The act gives the Board the authority to
promulgate an exception to the schedule for
checks that have been returned unpaid and
redeposited. Section 229.13(c) provides such
an exception for checks that have been re
turned unpaid and redeposited by the custom
er or the depositary bank.
This exception addresses the increased risk
to the depositary bank that checks that have
been returned once will be uncollectible when
they are presented to the paying bank a sec
ond time. The Board, however, does not be
lieve that this increased risk is present for
checks that have been returned due to a miss
ing indorsement. Thus, the exception does not
apply to checks returned unpaid due to miss
ing indorsements and redeposited after the
missing indorsement has been obtained, if the
reason for return indicated on the check (see
section 229.30(d)) states that it was returned
due to a missing indorsement. For the same
reason, this exception does not apply to a
check returned because it was postdated (fu
ture-dated), if the reason for return indicated
on the check states that it was returned be
cause it was postdated, and if it is no longer
postdated when redeposited.
To determine when funds must be made
available for withdrawal, the banking day on
which the check is redeposited is considered
to be the day of deposit. A depositary bank
that made $100 of a check available for with
drawal under section 229.10(c) (l)(vii) can
charge back the full amount of the check in
cluding the $100 if the check is returned un
paid, but the $100 must be made available
again if the check is redeposited.
13(d) Repeated Overdrafts
The act gives the Board the authority to estab36

Regulation CC Commentary

lish an exception for “deposit accounts which
have been overdrawn repeatedly.” This para
graph provides two tests to determine what
constitutes repeated overdrafts. Under the
first test, a customer’s accounts are considered
repeatedly overdrawn if, on six banking days
within the preceding six months, the available
balance in any account held by the customer
is negative, or the balance would have become
negative if checks or other charges to the ac
count had been paid, rather than returned.
This test can be met based on separate occur
rences (e.g., checks that are returned for in
sufficient funds on six different days), or
based on one occurrence (e.g., a negative bal
ance that remains on the customer’s account
for six banking days). If the bank dishonors a
check that otherwise would have created a
negative balance, however, the incident is con
sidered an overdraft only on that day.
The second test addresses substantial over
drafts. Such overdrafts increase the risk to the
depositary bank of dealing with the repeated
overdrafter. Under this test, a customer incurs
repeated overdrafts if, on two banking days
within the preceding six months, the available
balance in any account held by the customer
is negative in an amount of $5,000 or more, or
would have become negative in an amount of
$5,000 or more if checks or other charges to
the account had been paid.
The exception relates not only to overdrafts
caused by checks drawn on the account, but
also overdrafts caused by other debit charges
(e.g., ACH debits, point-of-sale transactions,
returned checks, account fees, etc.). If the po
tential debit is in excess of available funds, the
exception applies regardless of whether the
items were paid or returned unpaid. An over
draft resulting from an error on the part of the
depositary bank, or from the imposition of
overdraft charges for which the customer is
entitled to a refund under sections 229.13(e)
or 229.16(c), cannot be considered in deter
mining whether the customer is a repeated
overdrafter. The exception excludes accounts
with overdraft lines of credit, unless the credit
line has been exceeded or would have been
exceeded if the checks or other charges to the
account had been paid.
In determining whether an account is sub
ject to the repeated overdraft exception, a de-

Regulation CC Commentary

positary bank may consider overdraft activity
that occurred prior to the effective date of the
regulation.

13(e) Reasonable Cause to Doubt
Collectibility
In the case of certain check deposits, if the
bank has reasonable cause to believe the check
is uncollectible, it may extend the time funds
must be made available for withdrawal. This
exception applies to a deposit of a local or
nonlocal check, a check drawn on a Federal
Reserve Bank or a Federal Home Loan Bank,
or a cashier’s, certified, or teller’s check. If the
reasonable-cause exception is invoked, the
bank must include in the notice to its custom
er, required by section 229.13(g), the reason
that the bank believes that the check is
uncollectible.
The following are several examples of cir
cumstances under which the reasonable-cause
exception may be invoked:
If a bank received a notice from the paying
bank that a check was not paid and is being
returned to the depositary bank, the deposi
tary bank could place a hold on the check or
extend a hold previously placed on that check,
and notify the customer that the bank had re
ceived notice that the check is being returned.
The exception could be invoked even if the
notice were incomplete, if the bank had rea
sonable cause to believe that the notice ap
plied to that particular check.
The depositary bank may have received in
formation from the paying bank, prior to the
presentment of the check, that gives the bank
reasonable cause to believe that the check is
uncollectible. For example, the paying bank
may have indicated that payment has been
stopped on the check, or that the drawer’s ac
count does not currently have sufficient funds
to honor the check. Such information may
provide sufficient basis to invoke this excep
tion. In these cases, the depositary bank could
invoke the exception and disclose as the rea
son the exception is being invoked the fact
that information from the paying bank indi
cates that the check may not be paid.
The fact that a check is deposited more
than six months after the date on the check

§229.13

(i.e., a stale check) is a reasonable indication
that the check may be uncollectible, because
under UCC section 4—404 a bank has no duty
to its customer to pay a check that is more
than six months old. Similarly, if a check be
ing deposited is postdated (future-dated), the
bank may have a reasonable cause to believe
the check is uncollectible, because the check is
not properly payable under UCC section
4—401. The bank, in its notice, should specify
that the check is stale date or postdated.
There are reasons that may cause a bank to
believe that a check is uncollectible that are
based on confidential information. For exam
ple, a bank could conclude that a check being
deposited is uncollectible based on its reason
able belief that the depositor is engaging in
kiting activity. Reasonable belief as to the in
solvency or pending insolvency of the drawer
of the check or the drawee bank and that the
checks will not be paid may also justify invok
ing this exception. In these cases, the bank
may indicate, as the reason it is invoking the
exception, that the bank has confidential in
formation that indicates that the check might
not be paid.
The Board has included a reasonable cause
exception notice as a model form in appendix
C (C-13A). The model notice includes a
number of reasons for which this exception
may be invoked. The Board does not intend to
provide a comprehensive list of reasons for
which this exception may be invoked; another
reason that does not appear on the model no
tice may be used as the basis for extending a
hold, if the reason satisfies the conditions for
invoking this exception. A depositary bank
may invoke the reasonable-cause exception
based on a combination of factors that give
rise to a reasonable cause to doubt the collect
ibility of a check. In these cases, the bank
should disclose the primary reasons for which
the exception was invoked in accordance with
paragraph (g) of this section.
The regulation provides that the determina
tion that a check is uncollectible shall not be
based on a class of checks or persons. For ex
ample, a depositary bank cannot invoke this
exception simply because the check is drawn
on a paying bank in a rural area and the de
positary bank knows it will not have the op
portunity to learn of nonpayment of that
37

§229.13

check before funds must be made available
under the availability schedules. Similarly, a
depositary bank cannot invoke the reasonablecause exception based on the race or national
origin of the depositor.
If a depositary bank invokes this exception
with respect to a particular check and does
not provide a written notice to the depositor
at the time of deposit, the depositary bank
may not assess any overdraft fee (such as an
NSF charge) or charge interest for use of
overdraft credit, if the check is paid by the
paying bank and these charges would not
have occurred had the exception not been in
voked. A bank may assess an overdraft fee
under these circumstances, however, if it pro
vides notice to the customer, in the notice of
exception required by paragraph (g) of this
section, that the fee may be subject to refund,
and refunds the charges upon the request of
the customer. The notice must state that the
customer may be entitled to a refund of any
overdraft fees that are assessed if the check
being held is paid, and indicate where such
requests for a refund of overdraft fees should
be directed.

13(f) Emergency Conditions
Certain emergency conditions may arise that
delay the collection or return of checks, or
delay the processing and updating of customer
accounts. In the circumstances specified in
this paragraph, the depositary bank may ex
tend the holds that are placed on deposits of
local and nonlocal checks that are affected by
such delays, if the bank exercises such dili
gence as the circumstances require. For exam
ple, if a bank learns that a check has been
delayed in the process of collection due to se
vere weather conditions or other causes be
yond its control, an emergency condition cov
ered by this section may exist and the bank
may place a hold on the check to reflect the
delay. In cases where the emergency-condi
tions exception does not apply, as in the case
of next-day checks under section 229.10(c),
the depositary bank may not be liable for a
delay in making funds available for withdraw
al if the delay is due to a bona fide error such
as an unavoidable computer malfunction.
38

Regulation CC Commentary

13(g) Notice of Exception
If a depositary bank invokes any of the safe
guard exceptions to the schedules listed above,
other than the new-account exception, and ex
tends the hold on a deposit beyond the time
periods permitted in sections 229.10, 229.11,
and 229.12, it must provide a notice to its cus
tomer stating the customer’s account number,
the date of deposit, the reason the exception
was invoked, and the day funds will be avail
able for withdrawal.
The requirement that the notice state the
day the funds shall be made available may be
satisfied if the notice identifies the date the
deposit is received and information sufficient
to indicate when funds will be available and
the amounts that will be available at those
times. For example, for a deposit involving
more than one check, the bank need not pro
vide a notice that discloses when funds from
each individual check in the deposit will be
available for withdrawal; instead, the bank
may provide a total dollar amount for each of
the time periods when funds will be available,
or provide the customer with an explanation
of how to determine the amount of the deposit
that will be held and when the funds will be
available for deposit. Appendix C (C-13)
contains a model form of this exception
notice.
For deposits made in person to an employee
of the depositary bank, the notice generally
must be given to the person making the depos
it, i.e., the “depositor,” at the time of deposit.
The depositor need not be the customer hold
ing the account. For other deposits, such as
deposits received at an ATM, lobby deposit
box, night depository, or through the mail,
notice must be mailed to the customer not lat
er than the close of the business day following
the banking day on which the deposit was
made.
Notice to the customer also may be provid
ed at a later time, if the facts upon which the
determination to invoke the exception do not
become known to the depositary bank until
after notice would otherwise have to be given.
In these cases, the bank must mail the notice
to the customer as soon as practicable, but not
later than the business day following the day
the facts become known. The Board has clari

Regulation CC Commentary

fied in the regulation when a depositary bank
is deemed to have knowledge of the facts upon
which the determination is made. A bank is
deemed to have knowledge when the facts are
brought to the attention of the person or per
sons in the bank responsible for making the
determination, or when the facts would have
been brought to their attention if the bank had
exercised due diligence.
If the depositary bank extends the hold
placed on a deposit due to an emergency con
dition, the notice requirement generally ap
plies; however, the regulation provides that
the bank need not provide a notice if the funds
would be available for withdrawal before the
notice must be sent. For example, if on the
last day of a hold period the depositary bank
experiences a computer failure and customer
accounts cannot be updated in a timely fash
ion to reflect the funds as available balances,
notices are not required if the funds are made
available before the notices must be sent.
A depositary bank must retain a record of
each notice of a reasonable-cause exception
for a period of two years, or such longer time
as provided in the record-retention require
ments of section 229.21. This record must
contain a brief description of the facts on
which the depositary bank based its judgment
that there was reasonable cause to doubt the
collectibility of a check. In many cases, such
as where the exception was invoked on the
basis of a notice of nonpayment received, the
record requirement may be met by retaining a
copy of the notice sent to the customer. In
other cases, such as where the exception was
invoked on the basis of confidential informa
tion, a further description to the facts, such as
insolvency of drawer, should be included in
the record.
13(h) Availability of Deposits Subject to
Exceptions
If a depositary bank invokes any exception
other than the new-account exception, the
bank may extend the time within which funds
must be made available under the schedule by
a reasonable period of time. This provision
establishes that an extension of up to four
business days is a reasonable period. Under
certain circumstances, however, a longer ex

§229.13

tension of the schedules may be reasonable. In
these cases, the burden is placed on the depos
itary bank to establish that a longer period is
reasonable.
For example, assume a bank extended the
hold on a check deposit by four business days
based on its reasonable cause to believe that
the check is uncollectible. If, on the day be
fore the extended hold is scheduled to expire,
the bank receives a notification from the pay
ing bank that the check is being returned un
paid, the bank may determine that a longer
hold is warranted, if it decides not to charge
back the customer’s account based on the no
tification. If the bank decides to extend the
hold, the bank must send a second notice, in
accordance with paragraph (g) of this sec
tion, indicating the new date that the funds
will be available for withdrawal.
With respect to certain checks subject to
the next-day (or second-day) availability re
quirement, the depositary bank may extend
the time funds must be made available for
withdrawal under the reasonable-cause excep
tion by a reasonable period beyond the delay
that would have been permitted under the reg
ulation had the checks not been subject to the
next-day availability requirement. Thus, for a
check drawn on a Federal Reserve Bank or
Federal Home Loan Bank, or a cashier’s, cer
tified, or teller’s check, the additional hold is
added to the local or nonlocal schedule that
would apply based on the location of the pay
ing bank.
Four business days, in addition to the time
period provided in the schedule, should pro
vide adequate time for the depositary bank to
learn of the nonpayment of virtually all
checks that are returned.
In the case of the application of the emer
gency-conditions exception, the depositary
bank may extend the hold placed on a check
by not more than a reasonable period follow
ing the end of the emergency or the time
funds must be available for withdrawal under
sections 229.11 or 229.12, whichever is later.
This provision does not apply to holds im
posed under the new-account exception. Un
der that exception, the maximum time period
within which funds must be made available
for withdrawal is specified for deposits that
generally must be accorded next-day availabil39

§ 229.13

ity under section 229.10. This subpart does
not specify the maximum time period within
which the proceeds of local and nonlocal
checks must be made available for withdrawal
during the new-account period.

Regulation CC Commentary

Regulation CC

§229.14

SECTION 229.14— Payment of Interest
(a) In general A depositary bank shall begin
to accrue interest or dividends on funds de
posited in an interest-bearing account not lat
er than the business day on which the deposi
tary 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.
(b) Special rule for credit unions. Paragraph
(a) of this section does not apply to any ac
count at a bank described in section
229.2(e)(4), if the bank—
(1) Begins the accrual of interest or divi
dends at a later date than the date described
in paragraph (a) of this section with re
spect to all funds, including cash, deposited
in the account; and
(2) Provides notice of its interest- or divi
dend-payment policy in the manner re
quired under section 229.16(d).
(c) Exception for checks returned unpaid.
This subpart does not require a bank to pay
interest or dividends on funds deposited by a
check that is returned unpaid.

§229.14

COMMENTARY
SECTION 229.14— Payment of Interest
14(a) In General
This section requires that a depositary bank
begin accruing interest on interest-bearing ac
counts not later than the day on which the
depositary bank receives credit for the funds
deposited.3 A depositary bank generally re
ceives credit on checks within one or two days
following deposit. A bank receives credit on a
cash deposit, an electronic payment, and the
deposit of a check that is drawn on the deposi
tary bank itself on the day the cash, electronic
payment, or check is received. In the case of a
deposit at a nonproprietary ATM, credit is
generally received on the day the bank that
operates the ATM credits the depositary bank
for the amount of the deposit.
Because “account” includes only transac
tion accounts, other interest-bearing accounts
of the depositary bank, such as money market
deposit accounts, savings deposits, and time
deposits, are not subject to this requirement;
however, a bank may accrue interest on such
deposits in the same way that it accrues inter
est under this paragraph for simplicity of op
eration. The Board intends the term “inter
est” to refer to payments to or for the account
of any customer as compensation for the use
of funds, but to exclude the absorption of ex
penses incident to providing a normal banking
function or a bank’s forbearance from charg
ing a fee in connection with such a service.
3This section implements section 606 of the act (12 USC
4005). The act keys the requirement to pay interest to the
time the depositary bank receives “provisional credit” for a
check. “Provisional credit” is a term used in the UCC that
is derived from the code’s concept of “provisional settle
ment.” (See UCC sections 4-211 and 4—213.) Provisional
credit is credit that is subject to charge-back if the check is
returned unpaid; once the check is finally paid, the right to
charge back expires and the provisional credit becomes
“final.”
Under subpart C, a paying bank no longer has an auto
matic right to charge back credits given in settlement of a
check, and the concept of provisional settlement is no long
er useful and has been eliminated by the regulation. Ac
cordingly, this section uses the term “credit” rather than
“provisional credit,” and this section applies regardless of
whether a credit would be provisional or final under the
UCC. “Credit” does not include a bookkeeping entry
(sometimes referred to as “deferred credit”) that does not
represent funds actually available for the bank’s use.
42

Regulation CC Commentary

(See 12 CFR 217.2(d).) Thus, earnings cred
its often applied to corporate accounts are not
interest payments for the purposes of this
section.
It may be difficult for a depositary bank to
track which day the depositary bank receives
credit for specific checks in order to accrue
interest properly on the account to which the
check is deposited. This difficulty may be pro
nounced if the bank uses different means of
collecting checks based on the time of day the
check is received, the dollar amount of the
check, and/or the paying bank to which it
must be sent. Thus, for the purpose of the in
terest-accrual requirement, a bank may rely
on an availability schedule from its Federal
Reserve Bank, Federal Home Loan Bank, or
correspondent to determine when the deposi
tary bank receives credit. If availability is de
layed beyond that specified in the availability
schedule, a bank may charge back interest er
roneously accrued or paid on the basis of that
schedule.
This paragraph also permits a depositary
bank to accrue interest on checks deposited to
all of its interest-bearing accounts based on
when the bank receives credit on all checks
sent for payment or collection. For example, if
a bank receives credit on 20 percent of the
funds deposited in the bank by check as of the
business day of deposit (e.g., on-us checks),
70 percent as of the business day following
deposit, and 10 percent on the second business
day following deposit, the bank can apply
these percentages to determine the day inter
est must begin to accrue on check deposits to
all interest-bearing accounts, regardless of
when the bank received credit on the funds
deposited in any particular account. Thus, a
bank may begin accruing interest on a uni
form basis for all interest-bearing accounts,
without the need to track the type of check
deposited to each account.
This section is not intended to limit a policy
of a depositary bank that provides that inter
est only accrues on balances that exceed a
specified amount, or on the minimum balance
maintained in the account during a given peri
od, provided that the balance is determined
based on the date that the depositary bank
receives credit for the funds. This section is
also not intended to limit any policy providing

Regulation CC Commentary

§229.14

that interest accrues sooner than required by
this paragraph.
14(b) Special Rule for Credit Unions
This provision implements a requirement in
section 606(b) and provides an exemption
from the payment of interest requirements for
credit unions that do not begin to accrue in
terest or dividends on their customer accounts
until a later date than the day the credit union
receives credit for those deposits, including
cash deposits. These credit unions are exempt
from the payment-of-interest requirements, as
long as they provide notice of their interestaccrual policies in accordance with section
229.16(d). For example, if a credit union has
a policy of computing interest on all deposits
received by the 10th of the month from the
first of that month, and on all deposits re
ceived after the 10th of the month from the
first of the next month, that policy is not su
perseded by this regulation, if the credit union
provides proper disclosure of this policy to its
customers.
The act limits this exemption to credit un
ions; other types of banks must comply with
the payment-of-interest requirements. In addi
tion, credit unions that compute interest from
the day of deposit or day of credit should not
change their existing practices in order to
avoid compliance with the requirement that
interest accrue from the day the credit union
receives credit.
14(c) Exception for Checks Returned
Unpaid
This provision is based on section 606(c) of
the act (12 USC 4005(c)) and provides that
interest need not be paid on funds deposited in
an interest-bearing account by check that has
been returned unpaid, regardless of the reason
for return.

§229.15

SECTION 229.15—General Disclosure
Requirements
(a) Form of disclosures. A bank shall make
the disclosures required by this subpart clear
ly and conspicuously in writing. Disclosures,
other than those posted at locations where
employees accept consumer deposits and
ATMs and the notice on preprinted deposit
slips, must be a form that the customer may
keep. The disclosures shall be grouped togeth
er and shall not contain any information not
related to the disclosures required by this sub
part. If contained in a document that sets
forth other account terms, the disclosures
shall be highlighted within the document by,
for example, use of a separate heading.
(b) Uniform reference to day of availability.
In its disclosure, a bank shall describe funds
as being available for withdrawal on “the
business day after” the day of de
posit. In this calculation, the first business day
is the business day following the banking day
the deposit was received, and the last business
day is the day on which the funds are made
available.
(c) Multiple accounts and multiple account
holders. A bank need not give multiple disclo
sures to a customer that holds multiple ac
counts if the accounts are subject to the same
availability policies. Similarly, a bank need
not give separate disclosures to each customer
on a jointly held account.
(d) Dormant or inactive accounts. A bank
need not give availability disclosures to a cus
tomer that holds a dormant or inactive
account.

Regulation CC

Regulation CC Commentary

COMMENTARY
SECTION 229.15—General Disclosure
Requirements
15(a) Form of Disclosures
This paragraph sets forth the general require
ments for the disclosures required under sub
part B. All of the disclosures must be given in
a clear and conspicuous manner, must be in
writing, and, in most cases, must be in a form
the customer may keep. Disclosures posted at
locations where employees accept consumer
deposits, at ATMs, and on preprinted deposit
slips need not be in a form that the customer
may keep. Appendix C of the regulation con
tains model forms, clauses, and notices to as
sist banks in preparing disclosures.
Disclosures concerning availability must be
grouped together and may not contain any in
formation that is not related to the disclosures
required by this subpart. Therefore, banks
may not intersperse the required disclosures
with other account disclosures and may not
include other account information that is not
related to their availability policy within the
text of the required disclosures. Banks may,
however, include information that is related to
their availability policies. For example, a bank
may inform its customers that, even when the
bank has already made funds available for
withdrawal, the customer is responsible for
any problem with the deposit, such as the re
turn of a deposited check.
The regulation does not require that the
disclosures be segregated from other account
terms and conditions. For example, banks
may include the disclosure of their specific
availability policy in a booklet or pamphlet
that sets out all of the terms and conditions of
the bank’s accounts. The required disclosures
must, however, be grouped together and high
lighted or identified in some manner, for ex
ample, by use of a separate heading for the
disclosures, such as “When Deposits are
Available for Withdrawal.”

§229.15

available for withdrawal. Banks must disclose
when deposited funds are available for with
drawal by stating the business day on which
the customer may begin to withdraw funds.
The business day funds will be available must
be disclosed as “the _______ business day
after” the day of deposit, or substantially simi
lar language. The business day of availability
is determined by counting the number of busi
ness days starting with the business day fol
lowing the banking day on which the deposit
is received, as determined under section
229.19(a), and ending with the business day
on which the customer may begin to with
draw funds. For example, a bank that imposes
delays of four intervening business days for
nonlocal checks must describe those checks as
being available on “the fifth business day af
ter” the day of the deposit.
15(c) Multiple Accounts and Multiple
Account Holders
This paragraph clarifies that banks need not
provide multiple disclosures under the regula
tion. A single disclosure to a customer that
holds multiple accounts, or a single disclosure
to one of the account holders of a jointly held
account, satisfies the disclosure requirements
of the regulation.
15(d) Dormant or Inactive Accounts
This paragraph makes clear that banks need
not provide disclosure of their specific avail
ability policies to customers that hold ac
counts that are either dormant or inactive.
The determination that certain accounts are
dormant or inactive must be made by the
bank. If a bank considers an account dormant
or inactive for purposes other than this regu
lation and no longer provides statements and
other mailings to an account for this reason,
such an account is considered dormant or in
active for purposes of this regulation.

15(b) Uniform Reference to Day of
Availability
This paragraph requires banks to disclose in a
uniform manner when deposited funds will be
45

§ 229.16

SECTION 229.16—Specific AvailabilityPolicy Disclosure
(a) General To meet the requirements of a
specific availability-policy disclosure under
sections 229.17 and 229.18(d), a bank shall
provide a disclosure describing the bank’s pol
icy as to when funds deposited in an account
are available for withdrawal. The disclosure
must reflect the policy followed by the bank in
most cases. A bank may impose longer delays
on a case-by-case basis or by invoking one of
the exceptions in section 229.13, provided this
is reflected in the disclosure.
(b) Content of specific availability-policy dis
closure. The specific availability-policy disclo
sure shall contain the following, as applica
ble—
(1) A summary of the bank’s availability
policy;
(2) A description of any categories of de
posits or checks used by the bank when it
delays availability (such as local or nonlo
cal checks); how to determine the category
to which a particular deposit or check be
longs; and when each category will be avail
able for withdrawal (including a descrip
tion of the bank’s business days and when a
deposit is considered received);32
(3) A description of any of the exceptions
in section 229.13 that may be invoked by
the bank, including the time following a de
posit that funds generally will be available
3a No later than December 31, 1988, a bank that distin
guishes in its disclosure between local and nonlocal checks
based on the routing number on the check must disclose
that certain checks, such as some credit-union share drafts
that are payable by one bank but payable through another
bank, will be treated as local or nonlocal checks based upon
the location of the bank by which they are payable and not
on the basis of the location of the bank whose routing num
ber appears on the check. The statement concerning pay
able-through checks must describe how the customer can
determine whether these checks will be treated as local or
nonlocal, or state that special rules apply to such checks
and that the customer may ask about the availability of
these checks. The statement may be in the form of an at
tachment or insert to the bank’s existing specific policy dis
closures. In addition, banks subject to this disclosure re
quirement must provide a similar notice concerning the
payable-through checks to existing account customers no
later than December 31, 1988. (Even though a bank need
not make a disclosure concerning payable-through checks
until December 31, 1988, the bank must characterize these
checks correctly as local or nonlocal checks under amended
section 229.2, and provide availability in accordance with
sections 229.11, 229.12, and 229.13, effective September 1,
1988.)
46

Regulation CC

for withdrawal and a statement that the
bank will notify the customer if the bank
invokes one of the exceptions;
(4) A description, as specified in para
graph (c)(1) of this section, of any caseby-case policy of delaying availability that
may result in deposited funds’ being avail
able for withdrawal later than the time peri
ods stated in the bank’s availability policy;
and
(5) A description of how the customer can
differentiate between a proprietary and a
nonproprietary ATM, if the bank makes
funds from deposits at nonproprietary
ATMS available for withdrawal later than
funds from deposits at proprietary ATMs.
(c) Longer delays on a case-by-case basis.
(1) Notice in specific policy disclosure. A
bank that has a policy of making deposited
funds available for withdrawal sooner than
required by this subpart may extend the
time when funds are available up to the
time periods allowed under this subpart on
a case-by-case basis, provided the bank in
cludes the following in its specific policy
disclosure—
(i) A statement that the time when de
posited funds are available for withdraw
al may be extended in some cases, and
the latest time following a deposit that
funds will be available for withdrawal;
(ii) A statement that the bank will noti
fy the customer if funds deposited in the
customer’s account will not be available
for withdrawal until later than the time
periods stated in the bank’s availability
policy; and
(iii) A statement that customers should
ask if they need to be sure about when a
particular deposit will be available for
withdrawal.
(2) Notice at time of case-by-case delay.
(i) In general. When a depositary bank
extends the time when funds will be
available for withdrawal on a case-by
case basis, it must provide the depositor
with a written notice. The notice shall in
clude the following information—
(A) The account number of the
customer;

Regulation CC

(B) The date and amount of the
deposit;
(C) The amount of the deposit that is
being delayed; and
(D) The day the funds will be avail
able for withdrawal.
(ii) Timing of notice. The notice shall be
provided to the depositor at the time of
the deposit, unless the deposit is not
made in person to an employee of the de
positary bank or the decision to extend
the time when the deposited funds will be
available is made after the time of the de
posit. If notice is not given at the time of
the deposit, the depositary bank shall
mail or deliver the notice to the customer
not later than the first business day fol
lowing the banking day the deposit is
made.
(3) Overdraft and returned-check fees. A
depositary bank that extends the time when
funds will be available for withdrawal on a
case-by-case basis and does not furnish the
depositor with written notice at the time of
deposit shall not assess any fees for any sub
sequent overdrafts (including use of a line
of credit) or return of checks or other deb
its to the account, if—
(i) The overdraft or return of the check
or other debit would not have occurred

except for the fact that the deposited
funds were delayed under paragraph
(c)(1) of this section; and
(ii) The deposited check was paid by the
paying bank.
Notwithstanding the foregoing, the deposi
tary bank may assess an overdraft or returned-check fee if it includes a notice con
cerning overdraft and returned-check fees
with the notice required in paragraph
(c) (2) of this section and, when required,
refunds any such fees upon the request of
the customer. The overdraft and returnedcheck notice must state that the customer
may be entitled to a refund of overdraft or
returned-check fees that are assessed if the
check subject to the delay is paid and state
how to obtain a refund.
(d) Credit-union notice of interest-payment
policy. If a bank described in section
229.2(e)(4) begins to accrue interest or divi

§229.16

dends on all deposits made in an interest-bear
ing account, including cash deposits, at a later
time than the day specified in section
229.14(a), the bank’s specific policy disclo
sures shall contain an explanation of when in
terest or dividends on deposited funds begin
to accrue.

§229.16

COMMENTARY
SECTION 229.16— Specific AvailabilityPolicy Disclosure
16(a) General
This section describes the information that
must be disclosed by banks to comply with
sections 229.17 and 229.18(d), which require
that banks furnish notices of their specific pol
icy regarding availability of deposited funds.
The disclosure provided by a bank must re
flect the availability policy followed by the
bank in most cases, even though a bank may
in some cases make funds available sooner or
impose a longer delay.
16(b) Content of Specific Policy
Disclosure
This paragraph sets forth the items that must
be included, as applicable, in a bank’s specific
availability-policy disclosure. The information
that must be disclosed by a particular bank
will vary considerably depending upon the
bank’s availability policy. For example, a
bank that makes deposited funds available for
withdrawal on the business day following the
day of deposit need simply disclose that de
posited funds will be available for withdrawal
on the first business day after the day of de
posit, the bank’s business days, and when de
posits are considered received.
On the other hand, a bank that has a policy
of routinely delaying on a blanket basis the
time when deposited funds are available for
withdrawal would have a more detailed dis
closure. Such blanket hold policies might be
for the maximum time allowed under the fed
eral law or might be for shorter periods. These
banks must disclose the types of deposits that
will be subject to delays, how the customer
can determine the type of deposit being made,
and the day that funds from each type of de
posit will be available for withdrawal.
Some banks may have a combination of
next-day availability and blanket delays. For
example, a bank may provide next-day avail
ability for all deposits except for one or two
categories, such as deposits at nonproprietary
ATMs and nonlocal personal checks over a
specified dollar amount. The bank would de48

Regulation CC Commentary

scribe the categories that are subject to delays
in availability and tell the customer when
each category would be available for with
drawal, and state that other deposits will be
available for withdrawal on the first business
day after the day of deposit. Similarly, a bank
that provides availability on the second busi
ness day for most of its deposits would need to
identify the categories of deposits which, un
der the regulation, are subject to next-day
availability and state that all other deposits
will be available on the second business day.
Because many banks’ availability policies
may be complex, banks must give a brief sum
mary of its policy at the beginning of the dis
closure. In addition, the bank must describe
any circumstances when actual availability
may be longer than the schedules disclosed.
Such circumstances would arise, for example,
when the bank invokes one of the exceptions
set forth in section 229.13 of the regulation, or
when the bank delays or extends the time
when deposited funds are available for with
drawal up to the time periods allowed by the
regulation on a case-by-case basis. Also, a
bank that must make certain checks available
faster under appendix B (reduction of sched
ules for certain nonlocal checks) must state
that some check deposits will be available for
withdrawal sooner because of special rules
and that a list of the pertinent routing num
bers is available upon request.
The business-day cut-off time used by the
bank must be disclosed and if some locations
have different cut-off times the bank must
note this in the disclosure and state the earli
est time that might apply. A bank need not
list all of the different cut-off times that might
apply.
A bank taking advantage of the extended
time period for making deposits at nonpro
prietary ATMs available for withdrawal un
der section 229.11(d) must explain this in the
initial disclosure. In addition, the bank must
provide a list (on or with the initial disclo
sure) of either the bank’s proprietary ATMs
or those ATMs that are nonproprietary at
which customers may make deposits. As an
alternative to providing such a list, the bank
may label all of its proprietary ATMs with the
bank’s name and state in the initial disclosure
that this has been done. Similarly, a bank tak

Regulation CC Commentary

ing advantage of the cash withdrawal limita
tions of sections 229.11(b)(2) and 229.12(d),
or the provision in section 229.19(e) allowing
holds to be placed on other deposits when a
deposit is made or a check is cashed, must
explain this in the initial disclosure.

16(c) Longer Delays on a Case-by-Case
Basis
16(c)(1) Notice in Specific Policy Disclosure
Banks that make deposited funds available for
withdrawal sooner than required by the regu
lation—for example, providing their custom
ers with immediate or next-day availability for
deposited funds—and delay the time when
funds are available for withdrawal only from
time to time determined on a case-by-case ba
sis must provide notice of this in their specific
availability-policy disclosure. This paragraph
outlines the requirements for that notice.
In addition to stating what their specific
availability policy is in most cases, banks that
may delay or extend the time when deposits
are available on a case-by-case basis must:
state that from time to time funds may be
available for withdrawal later than the time
periods in their specific policy disclosure; dis
close the latest time that a customer may have
to wait for deposited funds to be available for
withdrawal when a case-by-case hold is
placed; state that customers will be notified
when availability of a deposit is delayed on a
case-by-case basis; and advise customers to
ask if they need to be sure of the availability of
a particular deposit.
A bank that imposes delays on a case-by
case basis is still subject to the availability re
quirements of this regulation. If the bank im
poses a delay on a particular deposit that is
not longer than the availability required by
sections 229.11 or 229.12 for local and nonlo
cal checks, the reason for the delay need not
be based on the exceptions provided in section
229.13. If the delay exceeds the time periods
permitted under sections 229.11 or 229.12,
however, then it must be based on an excep
tion provided in section 229.13, and the bank
must comply with the section 229.13 notice
requirements.

§229.16

(16)(c)(2) Notice at Time of Case-by-Case
Delay
In addition to including the disclosures re
quired by paragraph (c)(1) of this section in
their specific availability-policy disclosure,
banks that delay or extend the time period
when funds are available for withdrawal on a
case-by-case basis must give customers a no
tice when availability of funds from a particu
lar deposit will be delayed or extended beyond
the time when deposited funds are generally
available for withdrawal. The notice must
state that a delay is being imposed and indi
cate when the funds will be available. In addi
tion, the notice must include the account
number, the date and amount of the deposit,
and the amount of the deposit being delayed.
If notice of the delay was not given at the
time the deposit was made and the bank as
sesses overdraft or retumed-check fees on ac
counts when a case-by-case hold has been
placed, the case-by-case hold notice provided
to the customer must include a notice con
cerning overdraft or retumed-check fees. The
notice must state that the customer may be
entitled to a refund of any overdraft or returned-check fees that result from the deposit
ed funds’ not being available if the check that
was deposited was in fact paid by the payor
bank, and explain how to request a refund of
any fees. (See section 229.16(c)(3).)
The requirement that the case-by-case hold
notice state the day that funds will be made
available for withdrawal may be met by stat
ing the date or the number of business days
after deposit that the funds will be made avail
able. This requirement is satisfied if the notice
provides information sufficient to indicate
when funds will be available and the amounts
that will be available at those times. For ex
ample, for a deposit involving more than one
check, the bank need not provide a notice that
discloses when funds from each individual
item in the deposit will be available for with
drawal. Instead, the bank may provide a total
dollar amount for each of the time periods
when funds will be available, or provide the
customer with an explanation of how to deter
mine the amount of the deposit that will be
held and when the held funds will be available
for withdrawal.
49

§229.16

For deposits made in person to an employee
of the depositary bank, the notice generally
must be given at the time of the deposit. The
notice at the time of the deposit must be given
to the person making the deposit, that is, the
“depositor.” The depositor need not be the
customer holding the account. For other de
posits, such as deposits received at an ATM,
lobby deposit box, night depository, through
the mail, or by armored car, notice must be
mailed to the customer not later than the
close of the business day following the bank
ing day on which the deposit was made. No
tice to the customer also may be provided not
later than the close of the business day follow
ing the banking day on which the deposit was
made if the decision to delay availability is
made after the time of the deposit.
(16)(c)(3) Overdraft and Returned-Check
Fees
If a depositary bank delays or extends the
time when funds from a deposited check are
available for withdrawal on a case-by-case ba
sis and does not provide a written notice to its
depositor at the time of deposit, the depositary
bank may not assess any overdraft or returned-check fees (such as an insufficientfunds charge) or charge interest for use of an
overdraft line of credit, if the deposited check
is paid by the paying bank and these fees
would not have occurred had the additional
case-by-case delay not been imposed. A bank
may assess an overdraft or retumed-check fee
under these circumstances, however, if it pro
vides notice to the customer in the notice re
quired by paragraph (c)(2) of this section
that the fee may be subject to refund, and re
funds the fees upon the request of the custom
er when required to do so. The notice must
state that the customer may be entitled to a
refund of any overdraft or retumed-check fees
that are assessed if the deposited check is
paid, and indicate where such requests for a
refund of overdraft fees should be directed.
16 (d) Credit-Union Notice of InterestPayment Policy
This paragraph sets forth the special disclo
sure requirement for credit unions that delay
accrual of interest or dividends for all cash
50

Regulation CC Commentary

and check deposits beyond the date of receiv
ing provisional credit for checks being depos
ited. (The interest-payment requirement is set
forth in section 229.14(a).) Such credit un
ions are required to describe their policy with
respect to accrual of interest or dividends on
deposits in their specific availability-policy
disclosure.

Regulation CC

§229.17

SECTION 229.17—Initial Disclosures
(a) New accounts. Before opening an ac
count, a bank shall provide a potential cus
tomer with the applicable specific availabilitypolicy disclosure described in section 229.16.
(b) Existing accounts.
(1) In the first regularly scheduled mailing
to customers after September 1, 1988, but
not later than October 31, 1988, a bank
shall send to existing customers the specific
availability-policy disclosure described in
section 229.16, unless the bank has previ
ously given disclosures that meet the re
quirements of that section.
(2) If the disclosure required by paragraph
(b)(1) of this section is included with a
disclosure of other account terms and con
ditions, the bank must direct the customer’s
attention to the availability disclosures by,
for example, the use of an insert or a letter.
(3) The disclosure required by paragraph
(b)(1) of this section may not be included
in a mailing of promotional material, such
as a solicitation for a new product or ser
vice, unless the mailing also includes the
customer’s account statement.

§229.17

COMMENTARY
SECTION 229.17—Initial Disclosures
17(a) New Accounts
This paragraph requires banks to provide a
notice of their availability policy to all poten
tial customers prior to opening an account.
The requirement of a notice prior to opening
an account requires banks to provide disclo
sures prior to accepting a deposit to open an
account. Disclosures must be given at the time
the bank accepts an initial deposit regardless
of whether the bank has opened the account
yet for the customer. If a bank, however, re
ceives a written request by mail from a person
asking that an account be opened and the re
quest includes an initial deposit, the bank may
open the account with the deposit, provided
the bank mails the required disclosures to the
customer not later than the business day fol
lowing the banking day on which the bank
receives the deposit. Similarly, if a bank re
ceives a telephone request from a customer
asking that an account be opened with a
transfer from a separate account of the cus
tomer’s at the bank, the disclosure may be
mailed not later than the business day follow
ing the banking day of the request.
17(b) Existing Accounts
This section requires banks to send a notice of
their specific policy with respect to the avail
ability of deposited funds to all existing ac
count holders in the first scheduled mailing to
such customers occurring after September 1,
1988. The notice must be sent not later than
October 31, 1988. Thus, banks must include a
notice in the first statement mailed to custom
ers after September 1, 1988, unless, prior to
the mailing of this statement, the bank has
provided a notice to its customers of its avail
ability policy that meets the requirements of
section 229.16. A bank that has provided
availability-policy disclosures to its customers,
either under a state law or as a matter of bank
practices or policy, need not provide disclo
sures under this section if the disclosures that
were previously given comply with the re
quirements of this regulation. A bank may
disclose both its present policy and its policy
52

Regulation CC Commentary

for September 1, 1990, and beyond in a single
notice.
The notice of specific policy may be sent
alone in a separate mailing, instead of with an
account statement, provided the mailing is
made prior to the first statement mailing on
the account after September 1, 1988. Banks
may not furnish the required notice to cus
tomers by including the notice with promo
tional material, such as a solicitation for
health or hospitalization insurance, unless
that material is included with the account
statement. A bank is permitted to provide the
notice by furnishing the customer with a
booklet or pamphlet that describes the terms
and conditions of the bank’s accounts general
ly. The bank, however, must then direct the
customer’s attention to the disclosures re
quired by this section by, for example, use of a
special insert or a letter.
If a customer has requested that the bank
not mail any information regarding the ac
count, the bank need not make a special mail
ing that includes the disclosure of the bank’s
specific availability policy. The disclosure
should be made available to the customer in
accordance with the customer’s instructions
to the bank for statements and other account
information.

Regulation CC

§229.18

SECTION 229.18—Additional
Disclosure Requirements
(a) Deposit slips. A bank shall include on all
preprinted deposit slips furnished to its cus
tomers a notice that deposits may not be avail
able for immediate withdrawal.
(b) Locations where employees accept con
sumer deposits. A bank shall post in a conspic
uous place in each location where its employ
ees receive deposits to consumer accounts a
notice that sets forth the time periods applica
ble to the availability of funds deposited in a
consumer account.
(c) Automated teller machines.
(1) A depositary bank shall post or pro
vide a notice at each ATM location that
funds deposited in the ATM may not be
available for immediate withdrawal.
(2) A depositary bank that operates an offpremises ATM from which deposits are re
moved not more than two times each week,
as described in section 229.19(a)(4), shall
disclose at or on the ATM the days on
which deposits made at the ATM will be
considered received.
(d) Upon request. A bank shall provide to
any person, upon oral or written request, a
notice containing the applicable specific availability-policy disclosure described in section
229.16.
(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.

§229.18

COMMENTARY
SECTION 229.18—Additional
Disclosure Requirements
18(a) Deposit Slips
This paragraph requires banks to include a
notice on all preprinted deposit slips. The deposit-slip notice need only state, somewhere
on the front of the deposit slip, that deposits
may not be available for immediate withdraw
al. The notice is required only on preprinted
deposit slips—those printed with the custom
er’s account number and name and furnished
by the bank in response to a customer’s order
to the bank. A bank need not include the no
tice on deposit slips that are not preprinted
and supplied to the customer—such as coun
ter deposit slips—or on those special deposit
slips provided to the customer under section
229.10(c). A bank is not responsible for en
suring that the notice appear on deposit slips
that the customer does not obtain from or
through the bank.
This paragraph applies to preprinted depos
it slips furnished to customers on or after Sep
tember 1, 1988. A bank need not mail deposit
slips to customers to replace the customers’
existing supply, and customers may continue
to use any slips they were sent prior to Sep
tember 1, 1988. In addition, a bank may mail
or deliver to its customers after September 1,
1988, preprinted deposit slips requested by the
customers prior to September 1, 1988, even
though the deposit slips do not include the
required notice.

18(b) Locations Where Employees
Accept Consumer Deposits
This paragraph describes the statutory re
quirement that a bank post in each location
where its employees accept consumer deposits
a notice of its availability policy pertaining to
consumer accounts. The notice that is re
quired must specifically state the availability
periods for the various deposits that may be
made to consumer accounts. The notice need
not be posted at each teller window, but the
notice must be posted in a place where con
sumers seeking to make deposits are likely to
see it before making their deposits. For exam54

Regulation CC Commentary

pie, the notice might be posted at the point
where the line forms for teller service in the
lobby. The notice is not required at any drivethrough teller windows nor is it required at
night depository locations, or at locations
where consumer deposits are not accepted.

18(c) Automated Teller Machines
This paragraph sets forth the required notices
for ATMs. Paragraph (c)(1) provides that
the depositary bank is responsible for posting
a notice on all ATMs at which deposits can be
made to accounts at the depositary bank. The
depositary bank may arrange for a third par
ty, such as the owner or operator of the ATM,
to post the notice and indemnify the deposi
tary bank from liability if the depositary bank
is liable under section 229.21 for the owner or
operator failing to provide the required notice.
The notice may be posted on a sign, shown
on the screen, or included on deposit enve
lopes provided at the ATM. This disclosure
must be given before the customer has made
the deposit. Therefore, a notice provided on
the customer’s deposit receipt or appearing on
the ATM’s screen after the customer has
made the deposit would not satisfy this
requirement.
Paragraph (c) (2) requires a depositary
bank that operates an off-premises ATM from
which deposits are removed not more than
two times a week to make a disclosure of this
fact on the off-premises ATM. The notice
must disclose to the customer the days on
which deposits made at the ATM will be con
sidered received.

18(d) Upon Request
This paragraph requires banks to provide
written notice of their specific availability pol
icy to any person upon that person’s oral or
written request. The notice must be sent with
in a reasonable period of time following re
ceipt of the request.

18 (e) Changes in Policy
This paragraph requires banks to send notices
to their customers when the banks change
their availability policies with regard to con
sumer accounts. A notice may be given in any

Regulation CC Commentary

§229.18

form as long as it is clear and conspicuous. If
the bank gives notice of a change by sending
the customer a complete new availability dis
closure, the bank must direct the customer to
the changed terms in the disclosure by use of a
letter or insert, or by highlighting the changed
terms in the disclosure.
Generally, a bank must send a notice at
least 30 calendar days before implementing
any change in its availability policy. If the
change results in faster availability of depos
its—for example, if the bank changes its avail
ability for nonlocal checks from the fifth busi
ness day after deposit to the fourth business
day after deposit—the bank need not send ad
vance notice. The bank must, however, send
notice of the change no later than 30 calendar
days after the change is implemented. A bank
is not required to give a notice when there is a
change in appendix B (Reduction of Sched
ules for Certain Nonlocal Checks).
A bank that has provided its customers
with a list of ATMs under section
229.16(b) (5) shall provide its customers with
an updated list of ATMs once a year if there
are changes in the list of ATMs previously
disclosed to the customers.

§229.19

SECTION 229.19—Miscellaneous
(a) When funds are considered deposited. For
the purposes of this subpart—
(1) Funds deposited at a staffed facility or
an ATM are considered deposited when
they are received at the staffed facility or
ATM;
(2) Funds mailed to the depositary bank
are considered deposited on the day they
are received by the depositary bank;
(3) Funds deposited to a night depository,
lock box, or similar facility are considered
deposited on the day on which the deposit
is removed from such facility and is avail
able for processing by the depositary bank;
(4) Funds deposited at an ATM that is not
on, or within 50 feet of, the premises of the
depositary bank are considered deposited
on the day the funds are removed from the
ATM, if funds normally are removed from
the ATM not more than two times each
week; and
(5) Funds may be considered deposited on
the next banking day, in the case of funds
that are deposited—
(i) On a day that is not a banking day
for the depositary bank; or
(ii) After a cut-off hour set by the de
positary bank for the receipt of deposits
of 2:00 p.m. or later, or, for the receipt of
deposits at ATMs or off-premise facili
ties, of 12:00 noon or later. Different cut
off hours later than these times may be
established for receipt of different types
of deposits, or receipt of deposits at dif
ferent locations.

Regulation CC

(1) Prohibit a depositary bank from mak
ing funds available to a customer for with
drawal in a shorter period of time than the
time required by this subpart;
(2) Affect a depositary bank’s right—
(i) To accept or reject a check for
deposit;
(ii) To revoke any settlement made by
the depositary bank with respect to a
check accepted by the bank for deposit,
to charge back the customer’s account
for the amount of a check based on the
return of the check or receipt of a notice
of nonpayment of the check, or to claim a
refund of such credit; and
(iii) To charge back funds made avail
able to its customer for an electronic pay
ment for which the bank has not received
payment in actually and finally collected
funds;
(3) Require a depositary bank to open or
otherwise to make its facilities available for
customer transactions on a given business
day; or
(4) Supersede any policy of a depositary
bank that limits the amount of cash a cus
tomer may withdraw from its account on
any one day, if that policy—
(i) Is not dependent on the time the
funds have been deposited in the account,
as long as the funds have been on deposit
for the time period specified in section
229.10, 229.11, 229.12, or 229.13; and—
(ii) In the case of withdrawals made in
person to an employee of the depositary
bank—
(A) Is applied without discrimination
to all customers of the bank; and
(B) Is related to security, operating,
or bonding requirements of the deposi
tary bank.

(b) Availability at start of business day. Ex
cept as otherwise provided in sections
229.11(b)(2) and 229.12(d), if any provision
of this subpart requires that funds be made
available for withdrawal on any business day,
the funds shall be available for withdrawal by
the later of—
(1) 9:00 a.m. (local time of the depositary
bank); or
(2) The time the depositary bank’s teller
facilities (including ATMs) are available
for customer-account withdrawals.

(d) Use of calculated availability. A deposi
tary bank may provide availability to its non
consumer accounts based on a sample of
checks that represents the average composi
tion of the customer’s deposits, if the terms
for availability based on the sample are equiv
alent to or more prompt than the availability
requirements of this subpart.

(e) Holds on other funds. A depositary bank
that receives a check for deposit in an account

Regulation CC

§229.19

or purchases a check for cash, other than a
check drawn on that bank and presented over
the counter for payment in cash, may place a
hold on any funds of the customer at the
bank, if—
(1) The amount of funds that are held do
not exceed the amount of the check; and
(2) The funds are made available for with
drawal within the times specified in sections
229.10, 229.11, 229.12, and 229.13.
(f) Employee training and compliance. Each
bank shall establish procedures to ensure that
the bank complies with the requirements of
this subpart, and shall provide each employee
who performs duties subject to the require
ments of this subpart with a statement of the
procedures applicable to that employee.
(g) Effect o f merger transaction. For purpos
es of this subpart, except for the purposes of
the new-accounts exception of section
229.13(a), and when funds are considered de
posited under section 229.19(a), two or more
banks that have engaged in a merger transac
tion may be considered to be separate banks
for a period of one year following the consum
mation of the merger transaction.

§229.19

COMMENTARY
SECTION 229.19—Miscellaneous
19(a) When Funds Are Considered
Deposited
The time funds must be made available for
withdrawal under this subpart is determined
by the day the deposit is made. This para
graph provides rules to determine the day
funds are considered deposited in various cir
cumstances. Funds received at a staffed teller
station or ATM are considered deposited
when received by the teller or placed in the
ATM. Funds mailed to the depositary bank
are considered deposited on the banking day
they are received by the depositary bank. The
funds are received by the depositary bank at
the time the mail is delivered to the bank,
even if it is initially delivered to a mail room,
rather than the check-processing area.
In addition to deposits at staffed facilities,
at ATMs, and by mail, funds may be deposit
ed at a facility such as a night depository or a
lock box. A night depository is a receptacle
for receipt of deposits, typically used by cor
porate depositors when the branch is closed.
Funds deposited at a night depository are con
sidered deposited on the banking day the de
posit is removed, and the contents of the de
posit are accessible to the depositary bank for
processing. For example, some businesses de
posit their funds in a locked bag at the night
depository late in the evening, and return to
the bank the following day to open the bag.
Other depositors may have an agreement with
their bank that the deposit bag must be
opened under the dual control of the bank and
the depositor. In these cases, the funds are
considered deposited when the customer re
turns to the bank and opens the deposit bag.
A lock box is a post office box used by a
corporation for the collection of bill payments
or other check receipts. The depositary bank
generally assumes the responsibility for col
lecting the mail from the lock box, processing
the checks, and crediting the corporation for
the amount of the deposit. Funds deposited
through a lock-box arrangement are consid
ered deposited on the day the deposit is re
moved from the lock box and are accessible to
the depositary bank for processing.
58

Regulation CC Commentary

A special provision is made for certain offpremises ATMs that are not serviced daily.
Funds deposited at such an ATM are consid
ered deposited on the day they are removed
from the ATM, if the ATM is not serviced
more than two times each week. This provi
sion is intended to address the practices of
some banks of servicing certain remote ATMs
infrequently. If a depositary bank applies this
provision with respect to an ATM, a notice
must be posted at the ATM informing deposi
tors that funds deposited at the ATM may not
be considered received on the day of deposit,
in accordance with section 229.18.
This paragraph also provides that a deposit
received on a day that the depositary bank is
closed, or after the bank’s cut-off hour, may
be considered made on the next banking day.
Generally, for purposes of the availability
schedules of this subpart, a bank may estab
lish a cut-off hour of 2:00 p.m. or later for
receipt of deposits at its head office or branch
offices. For receipt of deposits at ATMs or offpremises facilities, such as night depositories
or lock boxes, the depositary bank may estab
lish a cut-off hour of 12:00 noon or later. This
earlier cut-off for ATM or off-premises depos
its is intended to provide greater flexibility in
the servicing of ATMs and other off-premises
facilities.
Different cut-off hours may be established
for different types of deposits. For example, a
bank may establish a 2:00 p.m. cut-off for the
receipt of check deposits, but a later cut-off
for the receipt of wire transfers. Different cut
off hours may also be established for deposits
received at different locations. For example, a
different cut-off may be established for ATM
deposits than for over-the-counter deposits, or
for different teller stations at the same branch.
With the exception of the 12:00 noon cut-off
for deposits at ATMs and off-premise facili
ties, no cut-off hour for receipt of deposits for
purposes of this subpart can be established
earlier than 2:00 p.m. Nevertheless, a bank is
not required to remain open until 2:00 p.m.

19(b) Availability at Start of Business
Day
If funds must be made available for withdraw
al on a business day, the funds must be avail

Regulation CC Commentary

able for withdrawal by the later of 9:00 a.m.
or the time the depositary bank’s teller facili
ties, including ATMs, are available for cus
tomer account withdrawals, except under the
special rule for cash withdrawals set forth in
sections 229.11(b)(2) and 229.12(d). Thus,
if a bank has no ATMs and its branch facili
ties are available for customer transactions be
ginning at 10:00 a.m., funds must be available
for customer withdrawal beginning at 10:00
a.m. If the bank has ATMs that are available
24 hours a day, rather than establishing 12:01
a.m. as the start of the business day, this para
graph sets 9:00 a.m. as the start of the day
with respect to ATM withdrawals. The Board
believes that this rule provides banks with suf
ficient time to update their accounting sys
tems to reflect the available funds in customer
accounts for that day.
The start of business is determined by the
local time of the branch or other location of
the depositary bank at which the account is
maintained. For example, if funds in a cus
tomer’s account at a West Coast bank are first
made available for withdrawal at the start of
business on a given day, and the customer at
tempts to withdraw the funds at an East Coast
ATM, the depositary bank is not required to
make the funds available until 9:00 a.m. West
Coast time (12:00 noon East Coast time).

19(c) Effect on Policies of Depositary
Bank
This subpart establishes the maximum hold
that may be placed on customer deposits. A
depositary bank may provide availability to its
customers in a shorter time than prescribed in
this subpart. A depositary bank may also
adopt different funds-availability policies for
different segments of its customer base, as
long as each policy meets the schedules in the
regulation. For example, a bank may differen
tiate between its corporate and consumer cus
tomers, or may adopt different policies for its
consumer customers based on whether a cus
tomer has an overdraft line of credit associat
ed with the account.
This regulation does not affect a depositary
bank’s right to accept or reject a check for
deposit, to charge back the customer’s ac
count based on a returned check or notice of

§229.19

nonpayment, or to claim a refund for any
credit provided to the customer.
Nothing in the regulation requires a deposi
tary bank to have facilities open for customers
to make withdrawals at specified times or on
specified days. For example, even though the
special cash-withdrawal rule set forth in sec
tions 229.11(b)(2) and 229.12(d) states that
a bank must make up to $400 available for
cash withdrawals no later than 5:00 p.m. on
specific business days, if a bank does not par
ticipate in an ATM system and does not have
any teller windows open at or after 5:00 p.m.,
the bank need not join an ATM system or
keep offices open. In this case, the bank com
plies with this rule if the funds that are re
quired to be available for cash withdrawal at
5:00 p.m. on a particular day are available for
withdrawal at the start of business on the fol
lowing day. Similarly, if a depositary bank is
closed for customer transactions, including
ATMs, on a day funds must be made available
for withdrawal, the regulation does not re
quire the bank to open.
The special cash withdrawal rule in the act
recognizes that the $400 that must be made
available for cash withdrawal by 5:00 p.m. on
the day specified in the schedule may exceed a
bank’s daily ATM cash withdrawal limit and
explicitly provides that the act does not super
sede a bank’s policy in this regard. As a result,
if a bank has a policy of limiting cash with
drawals from automated teller machines to
$250 per day, the regulation would not re
quire that the bank dispense $400 of the pro
ceeds of the customer’s deposit that must be
made available for cash withdrawal on that
day.
Even though the act clearly provides that
the bank’s ATM withdrawal limit is not su
perseded by the federal availability rules on
the day funds must first be made available, the
act does not specifically permit banks to limit
cash withdrawals at ATMs on subsequent
days when the entire amount of the deposit
must be made available for withdrawal. The
Board believes that the rationale behind the
act’s provision that a bank’s ATM withdrawal
limit is not superseded by the requirement
that funds be made available for cash with
drawal applies on subsequent days. Nothing
in the regulation prohibits a depositary bank
59

§229.19

from establishing ATM cash-withdrawal lim
its that vary among customers of the bank, as
long as the limit is not dependent on the
length of time funds have been in the custom
er’s account, provided that the permissible
hold has expired.
A number of small banks, particularly cred
it unions, due to lack of secure facilities, keep
no cash on their premises and hence offer no
cash-withdrawal capability to their customers.
Other banks limit the amount of cash on their
premises due to bonding requirements or cost
factors, and consequently reserve the right to
limit the amount of cash each customer can
withdraw over the counter on a given day.
For example, some banks require advance no
tice for large cash withdrawals in order to lim
it the amount of cash needed to be maintained
on hand at any time.
Nothing in the regulation is intended to
prohibit a bank from limiting the amount of
cash that may be withdrawn at a staffed teller
station, if the bank has a policy limiting the
amount of cash that may be withdrawn and
that policy is applied equally to all customers
of the bank, is based on security, operating, or
bonding requirements, and is not dependent
on the length of time the funds have been in
the customer’s account, as long as the permis
sible hold has expired. The regulation, howev
er, does not authorize such policies if they are
otherwise prohibited by statutory, regulatory,
or common law.

19(d) Use of Calculated Availability
A depositary bank may provide availability to
its nonconsumer accounts on a calculatedavailability basis. Under calculated availabil
ity, a specified percentage of funds from check
deposits may be made available to the custom
er on the next business day, with the remain
ing percentage deferred until subsequent days.
The determination of the percentage of depos
ited funds that will be made available each
day is based on the customer’s typical deposit
mix as determined by a sample of the custom
er’s deposits. Use of calculated availability is
permitted only if, on average, the availability
terms that result from the sample are equiva
lent to or more prompt than the requirements
of this subpart.

Regulation CC Commentary

19(e) Holds on Other Funds
Section 607(d) of the act (12 USC 4006(d))
provides that once funds are available for
withdrawal under the act, such funds shall not
be frozen solely due to the subsequent deposit
of additional checks that are not yet available
for withdrawal. This provision of the act is
designed to prevent evasion of the act’s avail
ability requirements.
This paragraph clarifies that, if a customer
deposits a check, the bank may place a hold
on any of the customer’s funds to the extent
that the funds held do not exceed the amount
of the check deposited, and the total amount
of funds held are made available for with
drawal within the times required in this sub
part. For example, if a customer cashes a
check (other than an on-us check) over the
counter, the depositary bank may place a hold
on any of the customer’s funds to the extent
that the funds held do not exceed the amount
of the check cashed, as long as the hold does
not exceed the hold that could be placed on
the check cashed over the counter, if the
check had been deposited in the account.

19(f) Employee Training and
Compliance
The act requires banks to take such actions as
may be necessary to inform fully each employ
ee that performs duties subject to the act of
the requirements of the act, and to establish
and maintain procedures reasonably designed
to ensure and monitor employee compliance
with such requirements.
This paragraph requires a bank to establish
procedures to ensure compliance with these
requirements and provide these procedures to
the employees responsible for carrying them
out.

19(g) Effect of Merger Transaction
After banks merge, there is often a period of
adjustment before their operations are consol
idated. This paragraph accommodates this ad
justment period by allowing merged banks to
be treated as separate banks for purposes of
this subpart for a period of up to one year
after consummation of the merger transac
tion, except that a customer of any bank that

Regulation CC Commentary

§229.19

is a party to the transaction that has an estab
lished account with that bank may not be
treated as a new account holder for any other
party to the transaction for purposes of the
new account exception of section 229.13(a),
and a deposit in any branch of the merged
bank is considered deposited in the bank for
purposes of the availability schedules in ac
cordance with section 229.19(a).
This rule affects the status of the combined
entity in a number of areas. For example:
1. When the resulting bank is a “participant”
in a check clearinghouse association (sec
tion 229.2 (y) and (/) and section
229.11(b)(2)
2. When an ATM is a “proprietary ATM”
(section 229.2(aa), section 229.11(d), and
section 229.12(b))
3. When a check is drawn on a branch
of the depositary bank
(section
229.10(c) (l)(v i))
“Merger transaction” is defined in section
229.2 (t).

§ 229.20

SECTION 229.20—Relation to State
Law
(a) In general. Any provision of a law or reg
ulation of any state in effect on or before Sep
tember 1, 1989, that requires funds deposited
in an account at a bank chartered by the state
to be made available for withdrawal in a
shorter time than the time provided in subpart
B, and, in connection therewith, subpart A,
shall —
(1) Supersede the provisions of the act and
subpart B, and, in connection therewith,
subpart A, to the extent the provisions re
late to the time by which funds deposited or
received for deposit in an account are avail
able for withdrawal; and
(2) Apply to all federally insured banks lo
cated within the state.
No amendment to a state law or regulation
governing the availability of funds that be
comes effective after September 1, 1989, shall
supersede the act and subpart B, and, in con
nection therewith, subpart A, but amended
provisions of state law shall remain in effect.
(b) Preemption of inconsistent law. Except as
provided in paragraph (a), the act and sub
part B, and, in connection therewith, subpart
A, supersede any provision of inconsistent
state law.
(c) Standards for preemption. A provision of
a state law in effect on or before September 1,
1989, is not inconsistent with the act, or sub
part B, or in connection therewith, subpart A,
if it requires that funds shall be available in a
shorter period of time than the time provided
in this subpart. Inconsistency with the act and
subpart B, and in connection therewith, sub
part A, may exist when state law—
(1) Permits a depositary bank to make
funds deposited in an account by cash, elec
tronic payment, or check available for with
drawal in a longer period of time than the
maximum period of time permitted under
subpart B, and, in connection therewith,
subpart A; or
(2) Provides for disclosures or notices con
cerning funds availability relating to
accounts.
(d) Preemption determinations. The Board
may determine, upon the request of any state,
62

Regulation CC

bank, or other interested party, whether the
act and subpart B, and, in connection there
with, subpart A, preempt provisions of state
laws relating to the availability of funds.
(e) Procedures for preemption determina
tions. A request for a preemption determina
tion shall include the following—
(1) A copy of the full text of the state law
in question, including any implementing
regulations or judicial interpretations of
that law; and
(2) A comparison of the provisions of state
law with the corresponding provisions in
the act and subparts A and B of this part,
together with a discussion of the reasons
why specific provisions of state law are ei
ther consistent or inconsistent with corre
sponding sections of the act and subparts A
and B of this part.
A request for a preemption determination
shall be addressed to the Secretary, Board of
Governors of the Federal Reserve System.

§ 229.20

Regulation CC Commentary

COMMENTARY
SECTION 229.20—Relation to State
Law
20(a) In General
A number of states have enacted laws that
govern when banks in those states must make
funds available to their customers. The act
provides that any state law in effect on Sep
tember 1, 1989, that provides that funds be
made available in a shorter period of time
than provided in this regulation, will super
sede the time periods in the act and the regu
lation. The conference report on the act clari
fies this provision by stating that any state law
enacted on or before September 1, 1989, may
supersede federal law to the extent that the
law relates to the time funds must be made
available for withdrawal (H.R. Rep. No. 261,
100th Cong. 1st Sess. 182 (1987)).
Thus, if a state wishes to adopt a law gov
erning funds availability, it must do so, effec
tive on or before September 1, 1989. Laws
adopted after that date will not supersede fed
eral law, even if they provide for shorter avail
ability periods than are provided under feder
al law. If a state that has a law governing
funds availability in effect before September 1,
1989, amends its law after that date, the
amendment will not supersede federal law,
but an amendment deleting a state require
ment will be effective.
If a state provides for a shorter hold for a
certain category of checks than is provided for
under federal law, that state requirement will
supersede the federal provision. For example,
most state laws base some hold periods on
whether the check being deposited is drawn
on an in-state or out-of-state bank. If a state
contains more than one check-processing re
gion, the state’s hold period for in-state checks
may be shorter than the federal maximum
hold period for nonlocal checks. Thus, the
state schedule would supersede the federal
schedule to the extent that it applies to in
state, nonlocal checks.
The act also provides that any state law
that provides for availability in a shorter peri
od of time than required by federal law is ap
plicable to all federally insured institutions in

that state, including federally chartered insti
tutions. If a state law provides shorter avail
ability only for deposits in accounts in certain
categories of banks, such as commercial
banks, the superseding state law continues to
apply only to those categories of banks, rather
than to all federally insured banks in the state.

20(b) Preemption of Inconsistent Law
This paragraph reflects the statutory provision
that other provisions of state law that are in
consistent with federal law are preempted.
Preemption does not require a determination
by the Board to be effective.

20(c) Standards for Preemption
This section describes the standards the Board
will use in making determinations on whether
federal law will preempt state laws governing
funds availability. A provision of state law is
considered inconsistent with federal law if it
permits a depositary bank to make funds
available to a customer in the same or a longer
period of time than the maximum period per
mitted by the act and this regulation. For ex
ample, a state law that permits a hold of four
days or longer for local checks permits a hold
that is longer than the maximum under the
temporary schedule of the act and this regula
tion, and therefore is inconsistent and
superseded.
Under a state law, some categories of de
posits could be available for withdrawal soon
er or later than the time required by this
subpart, depending on the composition of the
deposit. For example, the act and this regula
tion (§ 229.10(c) (1) (vii)) require next-day
availability for the first $100 of the aggregate
deposit of local or nonlocal checks on any
day, and a state law could require next-day
availability for any check of $100 or less that
is deposited. Under the act, if either one $150
check or three $50 checks are deposited on a
given day, $100 must be made available for
withdrawal on the next business day, and $50
must be made available in accordance with
the local or nonlocal schedule. Under the state
law, however, the two deposits would be sub
ject to different availability rules. In the first
case, none of the proceeds of the deposit
would be subject to next-day availability; in
63

§ 229.20

the second case, the entire proceeds of the de
posit would be subject to next-day availability.
In this example, because the state law
would, in some of these situations, permit a
hold longer than the maximum permitted by
the act, the provision of state law in this ex
ample is inconsistent and superseded in its en
tirety. The Board recognizes that this stan
dard will eliminate the faster availability that
would be obtained for some compositions of
deposits if the provision of state law were su
perseded only partially. Nonetheless, super
seding these state law provisions in their en
tirety avoids the necessity of forming very
complex hybrids of state and federal law that
could not have been contemplated by the state
or federal legislatures.
Similarly, a provision of state law could es
tablish a different method of calculating the
exception for large-dollar deposits than the
large-deposit exception in this subpart (see
section 229.13(b)). Thus, a state law could
exempt each check of more than $5,000 from
its availability rules, rather than the act’s ex
emption of aggregate deposits in excess of
$5,000. Such a provision of state law would
allow for longer availability for the portion of
a check under $5,000, and therefore the provi
sion of state law would be superseded.
State laws that provide maximum availabil
ity periods for categories of deposits or institu
tions that are not covered by the act would
not be superseded. Thus, state funds-availability laws that apply to funds in time and sav
ings deposits or to deposits in money market
mutual funds are not affected by the act or
this regulation.
Generally, state rules governing the disclo
sure of availability policies and actions appli
cable to accounts are also superseded. Never
theless, a state law requiring disclosure of
funds-availability policies that apply to depos
its other than “accounts,” such as savings or
time deposits, are not inconsistent with the act
or this subpart. Banks in these states would
have to follow the state disclosure rules for
these deposits.

20(d) Preemption Determinations
The Board may issue preemption determina
tions upon the request of an interested party
64

Regulation CC Commentary

in a state. The determinations will relate only
to the provisions of subparts A and B; gener
ally the Board will not issue individual pre
emption determinations regarding the relation
of state UCC provisions to the requirements
of subpart C.

20(e) Procedures for Preemption
Determinations
This provision sets forth the information that
must be included in a request by an interested
party for a preemption determination by the
Board.

Regulation CC
S E C T I O N 2 2 9 . 2 1 — C iv il L i a b i l i t y

(a) Civil liability. A bank that fails to comply
with any requirement imposed under subpart
B, and in connection therewith, subpart A, of
this part or any provision of state law that
supersedes any provision of subpart B, and in
connection therewith, subpart A, with respect
to any person is liable to that person in an
amount equal to the sum of—
(1) Any actual damage sustained by that
person as a result of the failure;
(2) Such additional amount as the court
may allow, except that—
(i) In the case of an individual action,
liability under this paragraph shall not be
less than $100 nor greater than $1,000;
and
(ii) In the case of a class action—
( A ) No minimum recovery shall be
applicable to each member of the class;
and
(B ) The total recovery under this par
agraph in any class action or series of
class actions arising out of the same
failure to comply by the same deposi
tary bank shall not be more than the
lesser of $500,000 or 1 percent of the
net worth of the bank involved; and,
(3) In the case of a successful action to en
force the foregoing liability, the costs of the
action, together with a reasonable attor
ney’s fee as determined by the court.
(b ) Class action awards. In determining the
amount of any award in any class action, the
court shall consider, among other relevant
factors—
(1) The amount of any damages awarded;
(2 ) The frequency and persistence of fail
ures of compliance;
(3 ) The resources of the bank;
(4) The number of persons adversely affect
ed; and
(5) The extent to which the failure of com
pliance was intentional.
(c) Bona fide errors.
(1) General rule. A bank is not liable in
any action brought under this section for a
violation of this subpart if the bank demon
strates by a preponderance of the evidence
that the violation was not intentional and
resulted from a bona fide error, notwith

§ 229.21

standing the maintenance of procedures
reasonably adapted to avoid any such error.
(2) Examples. Examples of a bona fide er
ror include clerical, calculation, computer
malfunction and programming, and print
ing errors, except that an error of legal
judgment with respect to the bank’s obliga
tion under this subpart is not a bona fide
error.
(d) Jurisdiction. Any action under this sec
tion may be brought in any United States dis
trict court or in any other court of competent
jurisdiction, and shall be brought within one
year after the date of the occurrence of the
violation involved.
(e) Reliance on Board rulings. No provision
of this subpart imposing any liability shall ap
ply to any act done or omitted in good faith in
conformity with any rule, regulation, or inter
pretation thereof by the Board, regardless of
whether such rule, regulation, or interpreta
tion is amended, rescinded, or determined by
judicial or other authority to be invalid for
any reason after the act or omission has
occurred.

(0 Exclusions. This section does not apply to
claims that arise under subpart C of this part
or to actions for wrongful dishonor.
(g) R ecord retention.
(1) A bank shall retain evidence of compli
ance with the requirements imposed by this
subpart for not less than two years. Records
may be stored by use of microfiche, micro
film, magnetic tape, or other methods capa
ble of accurately retaining and reproducing
information.
(2) If a bank has actual notice that it is
being investigated, or is subject to an en
forcement proceeding by an agency charged
with monitoring that bank’s compliance
with the act and this subpart, or has been
served with notice of an action filed under
this section, it shall retain the records per
taining to the action or proceeding pending
final disposition of the matter, unless an
earlier time is allowed by order of the agen
cy or court.

§ 229.21

COMMENTARY
SECTION 229.21—Civil Liability
21(a) Civil Liability
This paragraph sets forth the statutory penal
ties for failure to comply with the require
ments of this subpart. These penalties apply to
provisions of state law that supersede provi
sions of this regulation, such as requirements
that funds deposited in accounts at banks be
made available more promptly than required
by this regulation, but they do not apply to
other provisions of state law. (See the com
mentary to section 229.20.)

21 (b) Class-Action Awards
This paragraph sets forth the provision in the
act concerning the factors that should be con
sidered by the court in establishing the
amount of a class-action award.

21(c) Bona Fide Errors
A bank is shielded from liability under this
section for a violation of a requirement of this
subpart if it can demonstrate, by a preponder
ance of the evidence, that the violation result
ed from a bona fide error and that it maintains
procedures designed to avoid such errors. For
example, a bank may make a bona fide error if
it fails to give next-day availability on a check
drawn on the Treasury because the bank’s
computer system malfunctions in a way that
prevents the bank from updating its custom
er’s account or if it fails to identify whether a
payable-through check is a local or nonlocal
check despite procedures designed to make
this determination accurately.

21(d) Jurisdiction
The act confers subject matter jurisdiction on
courts of competent jurisdiction and provides
a time limit for civil actions for violations of
this subpart.

21 (e) Reliance on Board Rulings
This provision shields banks from civil liabili
ty if they act in good faith in reliance on any
rule, regulation, model form (if the disclosure
66

Regulation CC Commentary

actually corresponds to the bank’s availability
policy), or interpretation of the Board, even if
it were subsequently determined to be invalid.
Banks may rely on this commentary, which is
issued as an official Board interpretation, as
well as on the regulation itself.

21(f) Exclusions
This provision clarifies that liability under this
section 229.21 does not apply to violations of
the requirements of subpart C of this regula
tion, or to actions for wrongful dishonor of a
check by a paying bank’s customer.

21(g) Record Retention
Banks must keep records to show compliance
with the requirements of this subpart for at
least two years. This record-retention period
is extended in the case of civil actions and en
forcement proceedings. Generally, a bank is
not required to retain records showing that it
has actually given disclosures or notices re
quired by this subpart to each customer, but it
must retain evidence demonstrating that its
procedures reasonably ensure the customers’
receipt of the required disclosures and notices.
A bank must, however, retain a copy of each
notice provided pursuant to its use of the rea
sonable cause exception under section
229.13(g) as well as a brief description of the
facts giving rise to the availability of that
exception.

Regulation CC

SUBPART C—COLLECTION OF
CHECKS
SECTION 229.30—Paying Bank’s
Responsibility for Return of Checks
(a) Return of checks. If a paying bank deter
mines not to pay a check, it shall return the
check in an expeditious manner as provided in
either paragraphs (a )( 1 ) or (a )( 2 ) of this
section.
(1) Two-day/four-day test. A paying bank
returns a check in an expeditious manner if
it sends the returned check in a manner
such that the check would normally be re
ceived by the depositary bank not later than
4:00 p.m. (local time of the depositary
bank) of—
(i) The second business day following
the banking day on which the check was
presented to the paying bank, if the pay
ing bank is located in the same check
processing region as the depositary bank;
or
(ii) The fourth business day following
the banking day on which the check was
presented to the paying bank, if the pay
ing bank is not located in the same
check-processing region as the depositary
bank.
If the last business day on which the paying
bank may deliver a returned check to the
depositary bank is not a banking day for the
depositary bank, the paying bank meets the
two-day/four-day test if the returned check
is received by the depositary bank on or be
fore the depositary bank’s next banking
day.
(2) Forward-collection test. A paying bank
also returns a check in an expeditious man
ner if it sends the returned check in a man
ner that a similarly situated bank would
normally handle a check—
(i) Of similar amount as the returned
check;
(ii) Drawn on the depositary bank; and
(iii) Deposited for forward collection in
the similarly situated bank by noon on
the banking day following the banking
day on which the check was presented to
the paying bank.
Subject to the requirement for expeditious re

§ 229.30

turn, a paying bank may send a returned
check to the depositary bank, or to any other
bank agreeing to handle the returned check
expeditiously under section 229.31 (a). A pay
ing bank may convert a check to a qualified
returned check. A qualified returned check
must be encoded in magnetic ink with the
routing number of the depositary bank, the
amount of the returned check, and a “2 ” in
position 44 of the MICR line as a return iden
tifier, in accordance with the American Na
tional Standard Specifications for Placement
and Location of MICR Printing, X9.13 (Sept.
1983). This paragraph does not affect a pay
ing bank’s responsibility to return a check
within the deadlines required by the UCC,
Regulation J (12 CFR 210), or section
229.30(c).
(b) Unidentifiable depositary bank. A paying
bank that is unable to identify the depositary
bank with respect to a check may send the
returned check to any bank that handled the
check for forward collection even if that bank
does not agree to handle the check expedi
tiously under section 229.31(a). A paying
bank sending a returned check under this par
agraph to a bank that handled the check for
forward collection must advise the bank to
which the check is sent that the paying bank is
unable to identify the depositary bank. The
expeditious-return requirements in section
229.30(a) do not apply to the paying bank’s
return of a check under this paragraph.
(c) Extension of deadline for expedited deliv
ery. The deadline for return or notice of non
payment under the UCC or Regulation J (12
CFR 210) is extended if a paying bank, in an
effort to expedite delivery of a returned check
to a bank, uses a means of delivery that would
ordinarily result in the returned check’s being
received by the bank to which it is sent on or
before the receiving bank’s next banking day
following the otherwise applicable deadline.
The deadline is extended further if a paying
bank uses a highly expeditious means of trans
portation, even if this means of transportation
would ordinarily result in delivery after the
receiving bank’s next banking day.
(d) Identification of returned check. A pay
ing bank returning a check shall clearly indi67

§ 229.30

cate on the face of the check that it is a re
turned check and the reason for return.
(e) Depositary bank without accounts. The
expeditious-return requirements of paragraph
(a) of this section do not apply to checks de
posited in a depositary bank that does not
maintain accounts.
(f) Notice in lieu of return. If a check is un
available for return, the paying bank may
send in its place a copy of the front and back
of the returned check, or, if no such copy is
available, a written notice of nonpayment con
taining the information specified in section
229.33(b). The copy or notice shall clearly
state that it constitutes a notice in lieu of re
turn. A notice in lieu of return is considered a
returned check subject to the expeditious-re
turn requirements of this section and to the
other requirements of this subpart.
(g) Reliance on routing number. A paying
bank may return a returned check based on
any routing number designating the deposi
tary bank appearing on the returned check in
the depositary bank’s indorsement.

Regulation CC

Regulation CC Commentary

COM M ENTARY
SECTION 229.30—Paying Bank’s
Responsibility for Return of Checks
30(a) Return of Checks
This section requires a paying bank (which,
for purposes of subpart C, may include a pay
able-through and payable-at bank; see section
229.2(z)) that determines not to pay a check
to return the check expeditiously. Generally, a
check is returned expeditiously if the return
process is as fast as the forward-collection
process. This paragraph provides two stan
dards for expeditious return, the two-day/
four-day test and the forward-collection test.
Under the two-day/four-day test, if a check
is returned such that it would normally be re
ceived by the depositary bank two business
days after presentment where both the paying
and depositary banks are located in the same
check-processing region or four business days
after presentment where the paying and de
positary banks are not located in the same
check-processing region, the check is consid
ered returned expeditiously. In certain limited
cases, however, these times are shorter than
the time it would normally take a forward-col
lection check deposited in the paying bank
and payable by the depositary bank to be col
lected. Therefore, the Board has included a
forward-collection test, whereby a check is
nonetheless considered to be returned expedi
tiously if the paying bank uses transportation
methods and banks for return comparable to
those used for forward-collection checks, even
if the check is not received by the depositary
bank within the two-day or four-day period.
30(a)(1) Two-Day/Four-Day Test
Under the first test, a paying bank must re
turn the check so that the check would nor
mally be received by the depositary bank
within specified times, depending on whether
or not the paying and depositary banks are
located in the same check-processing region.
Where both banks are located in the same
check-processing region, a check is returned
expeditiously if it is returned to the depositary
bank by 4:00 p.m. (local time of the deposi
tary bank) of the second business day after

§ 229.30

the banking day on which the check was pre
sented to the paying bank. For example, a
check presented on Monday to a paying bank
must be returned to a depositary bank located
in the same check-processing region by 4:00
p.m. on Wednesday. For a paying bank that is
located in a dilferent check-processing region
than the depositary bank, the deadline to
complete return is 4:00 p.m. (local time of the
depositary bank) of the fourth business day
after the banking day on which the check was
presented to the paying bank. For example, a
check presented to such a paying bank on
Monday must be returned to the depositary
bank by 4:00 p.m. on Friday.
This two-day/four-day test does not neces
sarily require actual receipt of the check by
the depositary bank within these times. Rath
er, the paying bank must send the check so
that the check would normally be received by
the depositary bank within the specified time.
Thus, the paying bank is not responsible for
unforeseeable delays in the return of the
check, such as transportation delays.
Often, returned checks will be delivered to
the depositary bank together with forwardcollection checks. Where the last day on
which a check could be delivered to a deposi
tary bank under this two-day/four-day test is
not a banking day for the depositary bank, a
returning bank might not schedule delivery of
forward-collection checks to the depositary
bank on that day. Further, the depositary
bank may not process checks on that day.
Consequently, if the last day of the time limit
is not a banking day for the depositary bank,
the check may be delivered to the depositary
bank before the close of the depositary bank’s
next banking day and the return will still be
considered expeditious. Ordinarily, this exten
sion of time will allow the returned checks to
be delivered with the next shipment of for
ward-collection checks destined for the depos
itary bank.
The times specified in this two-day/fourday test are based on estimated forward-collection times, but take into account the partic
ular difficulties that may be encountered in
handling returned checks. It is anticipated
that the normal process for forward collection
of a check coupled with these return require
ments will frequently result in the return of
checks before the proceeds of local and nonlo69

Regulation CC Commentary

§ 229.30

cal checks, other than those covered by sec
tion 229.10(c), must be made available for
withdrawal under the temporary schedules in
section 229.11.
Under this two-day/four-day test, no par
ticular means of returning checks is required,
thus providing flexibility to paying banks in
selecting means of return. The Board antici
pates that paying banks will often use return
ing banks (see section 229.31) as their agents
to return checks to depositary banks. A pay
ing bank may rely on the availability schedule
of the returning bank it uses in determining
whether the returned check would “normal
ly” be returned within the required time un
der this two-day/four-day test, unless the pay
ing bank has reason to believe that these
schedules do not reflect the actual time for
return of a check.
30(a)(2) Forward-Collection Test
Under the second, “forward collection” test, a
paying bank returns a check expeditiously if it
returns a check by means as swift as the
means similarly situated banks would use for
the forward collection of a check drawn on
the depositary bank.
Generally, the paying bank would satisfy
the forward-collection test if it uses a trans
portation method and collection path for re
turn comparable to those used for forward
collection, provided that the returning bank
selected to process the return agrees to handle
the returned check under the standards for ex
peditious return for returning banks under
section 229.31(a). This test allows many pay
ing banks a simple means of expeditious re
turn of checks and takes into account the
longer time for return that will be required by
banks that do not have ready access to direct
courier transportation.
The paying bank’s normal method of send
ing a check for forward collection would not
be expeditious, however, if it is materially
slower than that of other banks of similar size
and with similar check handling activity in its
community.
Under the forward-collection test, a paying
bank must handle, route, and transport a re
turned check in a manner designed to be at
least as fast as a similarly situated bank would
70

collect a forward-collection check ( 1) of simi
lar amount, ( 2 ) drawn on the depositary
bank, and (3) received for deposit by a
branch of the paying bank or a similarly situ
ated bank by noon on the banking day follow
ing the banking day of presentment of the re
turned check.
This test refers to similarly situated banks
to indicate a general community standard. In
the case of a paying bank (other than a Feder
al Reserve Bank), a similarly situated bank is
a bank of similar asset size, in the same com
munity, and with similar check-handling ac
tivity as the paying bank. (See section
229.2(ee).) A paying bank has similar check
handling activity to other banks that handle
similar volumes of checks for collection.
Under the forward-collection test, banks
that use means of handling returned checks
that are less efficient than the means used by
similarly situated banks must improve their
procedures. On the other hand, a bank with
highly efficient means of collecting checks
drawn on a particular bank, such as a direct
presentment of checks to a bank in a remote
community, is not required to use that means
for returned checks, i.e., direct return, if simi
larly situated banks do not present checks di
rectly to that depositary bank.
Examples
1. If a check is presented to a paying bank on
Monday and the depositary bank and the pay
ing bank are participants in the same clearing
house, the paying bank should arrange to
have the returned check received by the de
positary bank by Wednesday. This would be
the same day the paying bank would deliver a
forward-collection check to the depositary
bank if the paying bank received the deposit
by noon on Tuesday.
2. If a check is presented to a paying bank on
Monday and the paying bank would normally
collect checks drawn on the depositary bank
by sending them to a correspondent or a Fed
eral Reserve Bank by courier, the paying bank
could send the returned check to its corre
spondent or Federal Reserve Bank, provided
that the correspondent has agreed to handle
returned checks expeditiously under section

Regulation CC Commentary

229.31(a). (All Federal Reserve Banks agree
to handle returned checks expeditiously.)
The paying bank must deliver the returned
check to the correspondent or Federal Re
serve Bank by the correspondent’s or Federal
Reserve Bank’s appropriate cut-off hour. The
appropriate cut-off hour is the cut-off hour for
returned checks that corresponds to the cut
off hour for forward-collection checks drawn
on the depositary bank that would normally
be used by the paying bank or a similarly situ
ated bank. A returned-check cut-off hour cor
responds to a forward-collection cut-off hour
if it provides for the same or faster availability
for checks destined for the same depositary
banks.
In this example, delivery to the correspon
dent or a Federal Reserve Bank by the appro
priate cut-off hour satisfies the paying bank’s
duty, even if use of the correspondent or Fed
eral Reserve Bank is not the most expeditious
means of returning the check. Thus, a paying
bank may send a local returned check to a
correspondent instead of a Federal Reserve
Bank, even if the correspondent then sends
the returned check to a Federal Reserve Bank
the following day as a qualified returned
check. Where the paying bank delivers for
ward-collection checks by courier to the cor
respondent or the Federal Reserve Bank,
mailing returned checks to the correspondent
or Federal Reserve Bank would not satisfy the
forward-collection test.
3. If a paying bank ordinarily mails its for
ward-collection checks to its correspondent or
Federal Reserve Bank in order to avoid the
costs of a courier delivery, but similarly situ
ated banks use a courier to deliver forwardcollection checks to their correspondent or
Federal Reserve Bank, the paying bank must
send its returned checks by courier to meet
the forward-collection test.
4. If a paying bank normally sends its for
ward-collection checks directly to the
depositary bank, which is located in another
community, but similarly situated banks send
forward-collection checks drawn on the de
positary bank to a correspondent or a Federal
Reserve Bank, the paying bank would not
have to send returned checks directly to the

§ 229.30

depositary bank, but could send them to a
correspondent or a Federal Reserve Bank.
The dollar amount of the returned check
has a bearing on how it must be returned. If
the paying bank and similarly situated banks
present large-dollar checks drawn on the de
positary bank directly to the depositary bank,
but use a Federal Reserve Bank or a corre
spondent to collect small-dollar checks, gener
ally the paying bank would be required to
send its large-dollar returns directly to the de
positary bank (or through a returning bank, if
the checks are returned as quickly), but could
use a Federal Reserve Bank or a correspon
dent for its small-dollar returns.
In meeting the requirements of the forwardcollection test, the paying bank is responsible
for its own actions, but not for those of the
depositary bank or returning banks.4 For ex
ample, if the paying bank starts the return of
the check in a timely manner but return is
delayed by a returning bank (including delay
to create a qualified returned check), general
ly the paying bank has met its requirements.
(See section 229.38.) If, however, the paying
bank selects a returning bank that the paying
bank should know is not capable of meeting
its return requirements, the paying bank will
not have met its obligation of exercising ordi
nary care in se le c tin g in te rm e d ia rie s to return
the check. The paying bank is free to use a
method of return, other than its method of
forward collection, as long as the alternate
method results in delivery of the returned
check to the depositary bank as quickly as the
forward collection of a check drawn on the
depositary bank or, where the returning bank
takes a day to create a qualified returned
check under section 229.31(a), one day later
than the forward-collection time.
Although paying banks may wish to pre
pare qualified returned checks because they
will be handled at a lower cost by returning
banks, the one-business-day extension provid
ed to returning banks is not available to pay
ing banks because of the longer time that a
paying bank has to dispatch the check. Nor
mally, paying banks will be able to convert a
check to a qualified returned check at any
4 This is analogous to the responsibility of collecting
banks under UCC section 4-202(3).

§ 229.30

time after the determination is made to return
the check until late in the day following pre
sentment, while a returning bank may receive
returned checks late on one day and be ex
pected to dispatch them early the next
morning.
In effect, under either test, the paying bank
acts as an agent or subagent of the depositary
bank in selecting a means of return. Under
section 229.30(a), a paying bank is autho
rized to route the returned check in a variety
of ways:
1. It may send the returned check directly to
the depositary bank by courier or other
means of delivery, bypassing returning
banks; or
2. It may send the returned check to any re
turning bank agreeing to handle the re
turned check for expeditious return to the
depositary bank under section 229.31(a),
regardless of whether or not the returning
bank handled the check for forward
collection.
If the paying bank elects to return the
check directly to the depositary bank, it is not
necessarily required to return the check to the
branch of first deposit. The check may be re
turned to the depositary bank at any location
permitted under section 229.32(a).
Except for the extension permitted by sec
tion 229.30(c), discussed below, this section
does not relieve a paying bank from the re
quirement for timely return (i.e., midnight
deadline) under UCC sections 4-301 and
4-302, which continue to apply. Under sec
tion 4-302, a paying bank is “accountable”
for the amount of a demand item other than a
documentary draft if it does not pay or return
the item or send notice of dishonor by its mid
night deadline. Under UCC sections 3-418
and 4—213(1), late return constitutes payment
and would be final in favor of a holder in due
course or a person who has in good faith
changed his position in reliance on the pay
ment. Thus, retaining this requirement gives
the paying bank an additional incentive to
make a prompt return.
The expeditious-return requirement applies
to a paying bank that determines not to pay a
check. This requirement applies to a payable72

Regulation CC Commentary

through or a payable-at bank that is defined as
a paying bank (see section 229.2(z)) and that
returns a check. This requirement begins
when the payable-through or payable-at bank
receives the check during forward collection,
not when the payor returns the check to the
payable-through or payable-at bank. Never
theless, a check sent for payment or collection
to a payable-through or payable-at bank is not
considered to be drawn on that bank for pur
poses of the midnight deadline provision of
UCC section 4-301. (See discussion of section
229.36(a).) The liability section of this sub
part (§ 229.38) provides that a paying bank
is not subject to both “accountability” for
missing the midnight deadline under the UCC
and liability for missing the timeliness require
ments of this regulation.
This paragraph directly affects the follow
ing provisions of the UCC, and may affect
other sections or provisions:
1. Section 4-212(2), in that direct return by
the paying bank is now permitted in all ju
risdictions even though not all jurisdictions
have adopted this optional provision. Also,
the paying bank does not have to create a
draft on the depositary bank.
2. Section 4-301 (4), in that instead of return
ing a check through a clearinghouse or to
the presenting bank, a paying bank may
send a returned check to the depositary
bank or to a returning bank.
3. Section 4—301(1), in that time limits speci
fied in that section may be affected by the
additional requirement to make an expedi
tious return and in that settlement for re
turned checks is made under section
229.31(c), not by revocation of settlement.

30(b) Unidentifiable Depositary Bank
In some cases, a paying bank will be unable to
identify the depositary bank through the use
of ordinary care and good faith. The Board
expects that these cases will be unusual as
skilled return clerks will readily identify the
depositary bank from the depositary-bank in
dorsement required under section 229.35 and
appendix D. In cases where the paying bank is
unable to identify the depositary bank, the
paying bank may, in accordance with section
229.30(a), send the returned check to a re-

Regulation CC Commentary

turning bank that agrees to handle the re
turned check for expeditious return to the de
positary bank under section 229.31(a). The
returning bank may be better able to identify
the depositary bank.
In the alternative, the paying bank may
send the check back up the path used for for
ward collection of the check. The presenting
bank and prior collecting banks will normally
be able to trace the collection path of the
check through the use of their internal records
in conjunction with the indorsements on the
returned check. In these limited cases, the
paying bank may send such a returned check
to any bank that handled the check for for
ward collection, even if that bank does not
agree to handle the returned check for expedi
tious return to the depositary bank under sec
tion 229.31(a). A paying bank returning a
check under this paragraph to a bank that has
not agreed to handle checks expeditiously
must advise that bank that it is unable to iden
tify the depositary bank. This information will
warn the bank that this check will require spe
cial research and handling in accordance with
section 229.31(b). The return of a check to a
bank that handled the check for forward col
lection is consistent with section 229.35(b),
which requires a bank handling a check to
take up the check if it has not been paid.
The sending of a check to a bank that han
dled the check for forward collection under
this paragraph, but that has not agreed to
handle returned checks expeditiously, is not
subject to the requirements for expeditious re
turn by the paying bank. Often, the paying
bank will not have courier or other expedi
tious means of transportation to the collecting
or presenting bank. Although the lack of a
requirement of expeditious return will create
risks for the depositary bank, in many cases
the inability to identify the depositary bank
will be due to the depositary bank’s, or a col
lecting bank’s, failure to use the indorsement
required by section 229.35(a) and appendix
D. If the depositary bank failed to use the
proper indorsement, it should bear the risks of
less than expeditious return. Similarly, where
the inability to identify the depositary bank is
due to indorsements or other information
placed on the back of the check by the deposi
tary bank’s customer or other prior indorser,

§ 229.30

the depositary bank should bear the risk that
it cannot charge a returned check back to that
customer. Where the inability to identify the
depositary bank is due to subsequent indorse
ments of collecting banks, these collecting
banks may be liable for a loss incurred by the
depositary bank due to less-than-expeditious
return of a check; those banks therefore have
an incentive to return checks sent to them un
der this paragraph quickly.
This paragraph does not relieve a paying
bank from the liability for the lack of expedi
tious return in cases where the paying bank is
itself responsible for the inability to identify
the depositary bank, such as when the paying
bank’s customer has used a check with print
ing or other material on the bank in the area
reserved for the depositary bank’s indorse
ment, making the indorsement unreadable.
(See section 229.38(d).)
A paying bank’s return under this para
graph is also subject to its midnight deadline
under UCC section 4-301, Regulation J, and
the exception provided in section 229.30(c).
A paying bank also may send a check to a
prior collecting bank to make a claim against
that bank under section 229.35(b) where the
depositary bank is insolvent or in other cases
as provided in section 229.35(b). Finally, a
paying bank may make a claim against a prior
collecting bank based on a breach of warranty
under UCC section 4—207.

30(c) Extension of Deadline for
Expedited Delivery
A paying bank may have a courier that leaves
after midnight to deliver its forward-collec
tion checks. This paragraph removes the con
straint of the midnight deadline for returned
checks if the returned check reaches either the
depositary bank or the returning bank to
which it is sent on that bank’s banking day
following the expiration of the midnight dead
line or other applicable time for return. The
extension also applies if the check reaches the
bank to which it is sent later than the close of
that bank’s banking day, if highly expeditious
means of transportation are used. For exam
ple, a West Coast paying bank may use this
further extension to ship a returned check by
air courier directly to an East Coast deposi
73

§ 229.30

tary bank even if the check arrives after the
close of the depositary bank’s banking day.
The time limits that are extended are the
paying bank’s midnight deadline in UCC sec
tions 4-301 and 4—302 and section 210.12 of
Regulation J (12 CFR 210.12). As this exten
sion is designed to speed the overall return of
checks, no modification or extension of the ex
peditious-return requirements in section
229.30(a) is required.
The paying bank satisfies its midnight dead
line under the UCC by dispatching returned
checks to another bank by courier, including a
courier under contract with the paying bank,
prior to expiration of the midnight deadline.
This paragraph directly affects UCC sec
tions 4—301 and 4—302 and section 210.12 of
Regulation J (12 CFR 210.12) to the extent
that this paragraph applies by its terms, and
may affect other provisions.

30(d) Identification of Returned Check
Most paying banks currently use some form
of stamp indicating the reason for return. This
paragraph makes this practice mandatory. No
particular form of stamp is required, but the
stamp must indicate the reason for return. A
check is identified as a returned check by a
reason-for-retum stamp, even though the
stamp does not specifically state that the
check is a returned check. A reason such as
“Refer to Maker” is permissible in appropri
ate cases. If the paying bank places the re
turned check in a carrier envelope, the carrier
envelope should indicate that it is a returned
check but need not repeat the reason for re
turn stated in the check if it in fact appears on
the check.

30(e) Depositary Bank Without
Accounts
Subpart B of this regulation applies only to
“checks” deposited in transaction-type “ac
counts.” Thus, a depositary bank with only
time or savings accounts need not comply
with the availability requirements of subpart
B. Collecting banks will not have couriers de
livering checks to these banks as paying
banks, because no checks are drawn on them.
Consequently, the costs of using a courier or
other expedited means to deliver returned
74

Regulation CC Commentary

checks directly to such a depositary bank may
not be justified. Thus, the expedited-return re
quirement of section 229.30(a) and the notice-of-nonpayment requirement of section
229.33 do not apply to checks being returned
to banks that do not hold accounts. The pay
ing bank’s midnight deadline in UCC sections
4—301 and 4—302 and section 210.12 of Regu
lation J (12 CFR 210.12) would continue to
apply to these checks. Returning banks would
also be required to act on such checks within
their midnight deadline. Further, in order to
avoid complicating the process of returning
checks generally, banks without accounts are
required to use the standard indorsement, and
their checks are returned by returning banks
and paid for by the depositary bank under the
same rules as checks deposited in other banks,
with the exception of the expeditious-return
and notice-of-nonpayment requirements of
sections 229.30(a), 229.31(a), and 229.33.
The expeditious-return requirements also
apply to a check deposited in a bank that is
not a depository institution. Federal Reserve
Banks, Federal Home Loan Banks, private
bankers, and possibly certain industrial banks
are not “depository institutions” within the
meaning of the act, and are therefore not sub
ject to the expedited-availability and disclo
sure requirements of subpart B. These banks
do, however, maintain “accounts” as defined
in section 229.2(a), and a paying bank return
ing a check to one of these banks would be
required to return the check to the depositary
bank, in accordance with the requirements of
this section.

30(f) Notice in Lieu of Return
A check that is lost or otherwise unavailable
for return may be returned by sending a copy
of both sides of the check or, if such a copy is
not available to the paying bank, a written no
tice of nonpayment containing the informa
tion specified in section 229.33(b). The copy
or written notice must clearly indicate it is a
substitute for the returned check. Notice by
telephone, telegraph, or other electronic trans
mission, other than a legible facsimile or simi
lar image transmission of both sides of the
check, does not satisfy the requirements for a
notice in lieu of return. The requirement for a

Regulation CC Commentary

§ 229.30

writing and the indication that the notice is a
substitute for the returned check is necessary
so that the returning and depositary banks are
informed that the notice carries value. Section
229.34(a)(4) includes a warranty that the
original check has not been and will not be
returned if a notice in lieu has been returned.
The requirement of this paragraph super
sedes the requirement of UCC section
4-301(1) as to the form and information re
quired of a notice of dishonor or nonpayment.
Reference in the regulation and this commen
tary to a returned check includes a notice in
lieu of return unless the context indicates
otherwise.
The notice in lieu of return is subject to the
provisions of section 229.30 and is treated like
a returned check for settlement purposes. If
the original check is over $2,500, the notice of
nonpayment under section 229.33 is still re
quired but may be satisfied by the notice in
lieu of return if the notice in lieu meets the
time and information requirements of section
229.33.
If not all of the information required by sec
tion 229.33(b) is available, the paying bank
may make a claim against any prior bank han
dling the check as provided in section
229.35(b).
30(g) Reliance on Routing Number

Although section 229.35 and appendix D re
quire that the depositary-bank indorsement
contain its nine-digit routing number, it is
possible that a returned check will bear the
routing number of the depositary bank in frac
tional, nine-digit, or other form. This para
graph permits a paying bank to rely on the
routing number of the depositary bank as it
appears on the check (in the depositary
bank’s indorsement) when it is received by
the paying bank.
If there are inconsistent routing numbers,
the paying bank may rely on any routing
number designating the depositary bank. The
paying bank is not required to resolve the in
consistency prior to processing the check. The
paying bank remains subject to the require
ment to act in good faith and use ordinary
care under section 229.38(a).
75

§ 229.31

SECTION 229.31—Returning Bank’s
Responsibility for Return of Checks
(a) Return of checks. A returning bank shall
return a returned check in an expeditious
manner as provided in either paragraphs
(a )( 1) or (a )( 2 ) of this section.
(1) Two-day/four-day test. A returning
bank returns a check in an expeditious
manner if it sends the returned check in a
manner such that the check would normal
ly be received by the depositary bank not
later than 4:00 p.m. (local time) of—
(i) The second business day following
the banking day on which the check was
presented to the paying bank if the pay
ing bank is located in the same check
processing region as the depositary bank;
or
(ii) The fourth business day following
the banking day on which the check was
presented to the paying bank if the pay
ing bank is not located in the same
check-processing region as the depositary
bank.
If the last business day on which the return
ing bank may deliver a returned check to
the depositary bank is not a banking day for
the depositary bank, the returning bank
meets this requirement if the returned
check is received by the depositary bank on
or before the depositary bank’s next bank
ing day.
(2) Forward-collection test. A returning
bank also returns a check in an expeditious
manner if it sends the returned check in a
manner that a similarly situated bank
would normally handle a check—
(i) Of similar amount as the returned
check;
(ii) Drawn on the depositary bank; and
(iii) Received for forward collection by
the similarly situated bank at the time the
returning bank received the returned
check, except that a returning bank may
set a cut-off hour for the receipt of re
turned checks that is earlier than the sim
ilarly situated bank’s cut-off hour for
checks received for forward collection, if
the cut-off hour is not earlier than 2:00
p.m.
Subject to the requirement for expeditious re76

Regulation CC

turn, the returning bank may send the re
turned check to the depositary bank, or to any
bank agreeing to handle the returned check
expeditiously under section 229.31(a). The
returning bank may convert the returned
check to a qualified returned check. A quali
fied returned check must be encoded in mag
netic ink with the routing number of the de
positary bank, the amount of the returned
check, and a “2” in position 44 of the MICR
line as a return identifier, in accordance with
the American National Standard Specification
for Placement and Location of MICR Print
ing, X9.13 (Sept. 1983). The time for expedi
tious return under the forward-collection test,
and the deadline for return under the UCC
and Regulation J (12 CFR 210), are extended
by one business day if the returning bank con
verts a returned check to a qualified returned
check. This extension does not apply to the
two-day/four-day test specified in paragraph
(a ) ( 1) of this section or when a returning
bank is returning a check directly to the de
positary bank.
(b) Unidentifiable depositary bank. A return
ing bank that is unable to identify the deposi
tary bank with respect to a returned check
may send the returned check to—
(1) Any collecting bank that handled the
check for forward collection if the returning
bank was not a collecting bank with respect
to the returned check; or
(2) A prior collecting bank, if the return
ing bank was a collecting bank with respect
to the returned check;
even if that collecting bank does not agree to
handle the returned check expeditiously under
section 229.31 (a). A returning bank sending a
returned check under this paragraph must ad
vise the bank to which the check is sent that
the returning bank is unable to identify the
depositary bank. The expeditious-return re
quirements in paragraph (a) of this section do
not apply to return of a check under this para
graph. A returning bank that receives a re
turned check from a paying bank under sec
tion 229.30(b), but which is able to identify
the depositary bank, must thereafter return
the check expeditiously to the depositary
bank.
(c) Settlement. A returning bank shall settle

Regulation CC

§ 229.31

with a bank sending a returned check to it for
return by the same means that it settles or
would settle with the sending bank for a check
received for forward collection drawn on the
depositary bank. This settlement is final when
made.
(d) Charges. A returning bank may impose a
charge on a bank sending a returned check for
handling the returned check.
(e) Depositary bank without accounts. The
expeditious-return requirements of paragraph
(a) of this section do not apply to checks de
posited with a depositary bank that does not
maintain accounts.
(f) Notice in lieu of return. If a check is un
available for return, the returning bank may
send in its place a copy of the front and back
of the returned check, or, if no copy is avail
able, a written notice of nonpayment contain
ing the information specified in section
229.33(b). The copy or notice shall clearly
state that it constitutes a notice in lieu of re
turn. A notice in lieu of return is considered a
returned check subject to the expeditious-return requirements of this section and to the
other requirements of this subpart.
(g) Reliance on routing number. A returning
bank may return a returned check based on
any routing number designating the deposi
tary bank appearing on the returned check in
the depositary bank’s indorsement or in mag
netic ink on a qualified returned check.

§229.31
COM M ENTARY

S E C T IO N 2 2 9 .3 1 — R e tu r n in g B a n k ’s
R e s p o n s ib ility f o r R e tu r n o f C h e c k s
3 1 ( a ) R e tu r n o f C h e c k s

The standards for return of checks established
by this section are similar to those for paying
banks in section 229.30(a). This section re
quires a returning bank to return a returned
check expeditiously if it agrees to handle the
returned check for expeditious return under
this paragraph. In effect, the returning bank is
an agent or subagent of the paying bank and a
subagent of the depositary bank for the pur
poses of returning the check. A returning
bank agrees to handle a returned check for
expeditious return to the depositary bank if
it—
1.

publishes or distributes availability sched
ules for the return of returned checks and
accepts the returned check for return;
2 . handles a returned check for return that it
did not handle for forward collection; or
3. otherwise agrees to handle a returned
check for expeditious return.
As in the case of a paying bank, a returning
bank’s return of a returned check is expedi
tious if it meets either of two tests. Under the
two-day/four-day test, the check must be re
turned so that it would normally be received
by the depositary bank by 4:00 p.m. either two
or four business days after the check was pre
sented to the paying bank, depending on
whether or not the paying bank is located in
the same check-processing region as the de
positary bank. This is the same test as the
two-day/four-day test applicable to paying
banks. (See the commentary to section
229.30(a).) While a returning bank will not
have firsthand knowledge of the day on which
a check was presented to the paying bank, re
turning banks may, by agreement, allocate
with paying banks liability for late return
based on the delays caused by each. In effect,
the two-day/four-day test protects all paying
and returning banks that return checks from
claims that they failed to return a check expe
ditiously, where the check is returned within
the specified time following presentment to
78

Regulation CC Commentary

the paying bank, or a later time as would re
sult from unforeseen delays.
The forward-collection test is similar to the
forward-collection test for paying banks. Un
der this test, a returning bank must handle a
returned check in the same manner that a
similarly situated collecting bank would han
dle a check of similar size drawn on the de
positary bank for forward collection. A simi
larly situated bank is a bank (other than a
Federal Reserve Bank) that is of similar asset
size and check-handling activity in the same
community. A bank has similar check-han
dling activity if it handles a similar volume of
checks for forward collection as the forwardcollection volume of the returning bank.
Under the forward-collection test, a return
ing bank must accept returned checks, includ
ing both qualified and other returned checks
(“raw returns”), at approximately the same
times and process them according to the same
general schedules as checks handled for for
ward collection. Thus, a returning bank gen
erally must process even raw returns on an
overnight basis, unless its time limit is extend
ed by one day to convert a raw return to a
qualified returned check.
A returning bank may establish earlier cut
off hours for receipt of returned checks than
for receipt of forward-collection checks, but
the cut-off hour for returned checks may not
be earlier than 2:00 p.m. The returning bank
also may set different sorting requirements for
returned checks than those applicable to other
checks. Thus, a returning bank may allow it
self more processing time for returns than for
forward-collection checks. All returned
checks received by a cut-off hour for returned
checks must be processed and dispatched by
the returning bank by the time that it would
dispatch forward-collection checks received at
a corresponding forward-collection cut-off
hour that provides for the same or faster
availability for checks destined for the same
depositary banks.
Examples
1. If a returning bank receives a returned
check by its cut-off hour for returned checks
on Monday and the depositary bank and the
returning bank are participants in the same

Regulation CC Commentary

§229.31

not require courier delivery, other means of
delivery, including mail, are acceptable.
The expeditious-return requirement for a
returning bank in this regulation is more
stringent in many cases than the duty of a
collecting bank to act seasonably under UCC
section 4-202 in returning a check. A return
ing bank is under a duty to act as expeditious
ly in returning a check as it would in the for
2. If a returning bank receives a returned
ward collection of a check. Notwithstanding
check, and the returning bank would normal
its duty of expeditious return, its midnight
ly collect a forward-collection check drawn on
deadline under UCC section 4—202 and sec
the depositary bank by sending the forwardtion 210.12(a) of Regulation J (12 CFR
collection check to a correspondent or a Fed
2 1 0 . 12 (a)), under the forward-collection test,
eral Reserve Bank by courier, the returning
a returning bank may take an extra day to
bank could send the returned check in the
qualify a returned check. A qualified returned
same manner if the correspondent has agreed
check will be handled by subsequent returning
to handle returned checks expeditiously under
banks more efficiently than a raw return. This
section 229.31(a). The returning bank would
paragraph gives a returning bank an extra
have to deliver the check by the correspon
business day beyond the time that would oth
dent’s or Federal Reserve Bank’s cut-off hour
erwise be required to return the returned
for returned checks that corresponds to its
check to convert a returned check to a quali
cut-off hour for forward-collection checks
fied returned check. The qualified returned
drawn on the depositary bank. A returning
check must include the routing number of the
bank may take a day to convert a check to a
depositary bank, the amount of the check, and
qualified returned check. Where the forwarda return identifier encoded on the check in
collection checks are delivered by courier,
magnetic ink. If the returning bank is sending
mailing the returned checks would not meet
the returned check directly to the depositary
the duty established by this section for return
bank, this extra day is not available because
ing banks.
preparing a qualified returned check will not
A returning bank must return a check to expedite handling by other banks.
the depositary bank by courier or other means
If the returning bank makes an encoding
as fast as a courier, if similarly situated re error in creating a qualified returned check, it
turning banks use couriers to deliver their for may be liable under section 229.38 for losses
ward-collection checks to the depositary caused by any negligence. The returning bank
bank.
would not lose the one-day extension available
For some depositary banks, no community to it for creating a qualified returned check
practice exists as to delivery of checks. For because of an encoding error.
example, a credit union whose customers use
Under section 229.31(a), the returning
payable-through drafts does not normally bank is authorized to route the returned check
have checks presented to it because the drafts in a variety of ways:
are normally sent to the payable-through bank
1. It may send the returned check directly to
for collection. In these circumstances, the
the depositary bank by courier or other ex
community standard is established by taking
peditious means of delivery; or
into account the dollar volume of the checks
2. It may send the returned check to any re
being sent to the depositary bank, and the lo
turning bank agreeing to handle the re
cation of the depositary bank, and determin
turned check for expeditious return to the
ing whether similarly situated banks would
depositary bank under this section regard
normally deliver forward-collection checks to
less of whether or not the returning bank
the depositary bank, taking into account the
handled the check for forward collection.
particular risks associated with returned
checks. Where the community standard does
If the returning bank elects to send the reclearinghouse, the returning bank should ar
range to have the returned check received by
the depositary bank by Tuesday. This would
be the same day that it would deliver a for
ward-collection check drawn on the deposi
tary bank and received by the returning bank
at a corresponding forward-collection cut-off
hour on Monday.

§229.31

turned check directly to the depositary bank,
it is not required to send the check to the
branch of the depositary bank that first han
dled the check. The returned check may be
sent to the depositary bank at any location
permitted under section 229.32(a).
In meeting the requirements of this section,
the returning bank is responsible for its own
actions, but not those of the paying bank, oth
er returning banks, or the depositary bank.
(See UCC section 4-202(3) regarding the re
sponsibility of collecting banks.) For example,
if the paying bank has delayed the start of the
return process but the returning bank acts in a
timely manner, the returning bank may satisfy
the requirements of this section even if the de
layed return results in a loss to the depositary
bank. (See section 229.38.) A returning bank
must handle a notice in lieu of return as expe
ditiously as a returned check.
This paragraph directly affects the follow
ing provisions of the UCC and may affect oth
er sections or provisions:
1. Section 4-212(2), in that direct return by
the returning bank is now permitted in all
jurisdictions even though not all jurisdic
tions have adopted this optional provision.
Also, the returning bank does not have to
create a draft on the depositary bank.
2. Section 4-202(2), in that time limits re
quired by that section may be affected by
the additional requirement to make an ex
peditious return.
3. Section 4-212(1), in that settlement for re
turned checks is made under section
229.31 (c) and not by charge-back of provi
sional credit, and in that the time limits
may be affected by the additional require
ment to make an expeditious return.
31 ( b ) U n id e n tifia b le D e p o s ita r y B a n k

This section is similar to section 229.30(b)
but applies to returning banks instead of pay
ing banks. In some cases a returning bank will
be unable to identify the depositary bank with
respect to a check. Returning banks agreeing
to handle checks for return to depositary
banks under section 229.31(a) are expected to
be expert in identifying depositary-bank in
dorsements. In the limited cases where the re
turning bank cannot identify the depositary
80

Regulation CC Commentary

bank, the returning bank may send the re
turned check to a returning bank that agrees
to handle the returned check for expeditious
return under section 229.31(a), or it may
send the returned check to a bank that han
dled the check for forward collection even if
that bank does not agree to handle returned
checks expeditiously under section 229.31(a).
If the returning bank itself handled the
check for forward collection, it may send the
returned check to a collecting bank that was
prior to it in the forward-collection process,
which will be better able to identify the depos
itary bank. If there are no prior collecting
banks, the returning bank must research the
collection of the check and identify the depos
itary bank. As in the case of paying banks un
der section 229.30(b), a returning bank’s
sending of a check to a bank that handled the
check for forward collection under section
229.31(b) is not subject to the expeditiousreturn requirements of section 229.31(a).
The returning bank’s return of a check un
der this paragraph is subject to the midnight
deadline under UCC section 4-202(2). (See
the definition of “returning bank” in section
229.2(cc).)
Where a returning bank receives a check
that it does not agree to handle expeditiously
under section 229.31(a), such as a check sent
to it under section 229.30(b), but the return
ing bank is able to identify the depositary
bank, the returning bank must thereafter re
turn the check expeditiously to the depositary
bank. The returning bank returns a check ex
peditiously under this paragraph if it returns
the check by the same means it would use to
return a check drawn on it to the depositary
bank or by other reasonably prompt means.
As in the case of a paying bank returning a
check under section 229.30(b), a returning
bank that sends a check to a collecting bank
under this paragraph must advise the collect
ing bank that the returning bank is unable to
identify the depositary bank.
31 ( c ) S e ttle m e n t

Under the UCC, a collecting bank receives
settlement for a check when it is presented to
the paying bank. The paying bank may recov
er the settlement when the paying bank re

Regulation CC Commentary

turns the check to the presenting bank. Under
this regulation, however, the paying bank may
return the check directly to the depositary
bank or through returning banks that did not
handle the check for forward collection. On
these more efficient return paths, the paying
bank does not recover the settlement made to
the presenting bank. Thus, this paragraph re
quires the returning bank to settle for a re
turned check (either with the paying bank or
another returning bank) in the same way that
it would settle for a similar check for forward
collection. To achieve uniformity, this para
graph applies even if the returning bank han
dled the check for forward collection.
Any returning bank, including one that
handled the check for forward collection, may
provide availability for returned checks pursu
ant to an availability schedule as it does for
forward-collection checks. These settlements
by returning banks, as well as settlements be
tween banks made during the forward collec
tion of a check, are considered final when
made, subject to any deferment of availability.
(See section 229.36(d).)
A returning bank may vary the settlement
method it uses by agreement with paying
banks or other returning banks. Special rules
apply in the case of insolvency of banks. (See
section 229.39.) If payment cannot be ob
tained from a depositary or returning bank be
cause of its insolvency or otherwise, recovery
can be had by returning, paying, and collect
ing banks from prior banks on the basis of the
liability of prior banks under section
229.35(b).
This paragraph affects UCC section
4—212(1) in that a paying or collecting bank
does not ordinarily have a right to charge
back against the bank from which it received
the returned check, although it is entitled to
settlement if it returns the returned check to
that bank, and may affect other sections or
provisions. Under section 229.36(d), a bank
collecting a check remains liable to prior col
lecting banks and the depositary bank’s cus
tomer under the UCC.
3 1 ( d ) C h a rg e s

This paragraph permits any returning bank,
even one that handled the check for forward

§229.31

collection, to impose a fee on the paying bank
or other returning bank for its service in han
dling a returned check. Where a claim is made
under section 229.35(b), the bank on which
the claim is made is not authorized by this
paragraph to impose a charge for taking up a
check. This paragraph preempts state laws to
the extent that these laws prevent returning
banks from charging fees for handling re
turned checks.
31 ( e ) D e p o s ita r y B a n k W ith o u t
A c c o u n ts

This paragraph is similar to section 229.30(e)
and relieves a returning bank of its obligation
to make expeditious return to a depositary
bank that does not maintain any accounts.
(See the commentary to section 229.30(e).)
31 ( f ) N o tic e in L ie u o f R e tu r n

This paragraph is similar to section 229.30(f)
and authorizes a returning bank to originate a
notice in lieu of return if the returned check is
unavailable for return. (See the commentary
to section 229.30(f).)
31 ( g ) R e lia n c e o n R o u tin g N u m b e r

This paragraph is similar to section 229.30(g)
and permits a returning bank to rely on rout
ing numbers appearing on a returned check
such as routing numbers in the depositary
bank’s indorsement or on qualified returned
checks. (See the commentary to section
229.30(g).)

§ 229.32
S E C T IO N 2 2 9 .3 2 — D e p o s ita r y B a n k ’s
R e s p o n s ib ility fo r R e tu r n e d C h e c k s

(a) Acceptance of returned checks. A deposi
tary bank shall accept returned checks and
written notices of nonpayment—
(1) At a location at which presentment of
checks for forward collection is requested
by the depositary bank; and
(2) (i) At a branch, head office, or other
location consistent with the name and
address of the bank in its indorsement on
the check;
(ii) If no address appears in the indorse
ment, at a branch or head office associat
ed with the routing number of the bank
in its indorsement on the check; or
(iii) If no routing number or address ap
pears in its indorsement on the check, at
any branch or head office of the bank.
A depositary bank may require that returned
checks be separated from forward-collection
checks.
(b) Payment. A depositary bank shall pay
the returning or paying bank returning the
check to it for the amount of the check prior
to the close of business on the banking day on
which it received the check (“payment date”)
by—
(1) Debit to an account of the depositary
bank on the books of the returning or pay
ing bank;
(2) Cash;
(3) Wire transfer; or
(4) Any other form of payment acceptable
to the returning or paying bank;
provided that the proceeds of the payment are
available to the returning or paying bank in
cash or by credit to an account of the return
ing or paying bank on or as of the payment
date. If the payment date is not a banking day
for the returning or paying bank or the depos
itary bank is unable to make the payment on
the payment date, payment shall be made by
the next day that is a banking day for the re
turning or paying bank. These payments are
final when made.
(c) Misrouted returned checks and written
notices of nonpayment. If a bank receives a
returned check or written notice of nonpay
ment on the basis that it is the depositary
82

Regulation CC

bank, and the bank determines that it is not
the depositary bank with respect to the check
or notice, it shall either promptly send the re
turned check or notice to the depositary bank
directly or by means of a returning bank
agreeing to handle the returned check expedi
tiously under section 229.31(a), or send the
check or notice back to the bank from which
it was received.
(d) Charges. A depositary bank may not im
pose a charge for accepting and paying checks
being returned to it.

Regulation CC Commentary
COM M ENTARY
S E C T IO N 2 2 9 .3 2 — D e p o s ita ry B a n k ’s
R e s p o n s ib ility fo r R e tu r n e d C h e c k s
3 2 ( a ) A c c e p ta n c e o f R e tu r n e d C h e c k s

This regulation seeks to encourage direct re
turns by paying and returning banks and may
result in a number of banks sending checks to
depositary banks with no preexisting arrange
ments as to where the returned checks should
be delivered. This paragraph states where the
depositary bank is required to accept returned
checks and written notices of nonpayment un
der section 229.33. (These locations differ
from locations at which a depositary bank
must accept electronic notices.) It is derived
from UCC section 3-504(2), which specifies
that presentment for payment may be made at
the place specified in the instrument or, if
there is none, at the place of business of the
party to pay. In the case of returned checks,
the depositary bank does not print the check
and can only specify the place of “payment”
of the returned check in its indorsement.
The paragraph specifies four locations at
which the depositary bank must accept re
turned checks:
1. The depositary bank must accept returned
checks at any location at which it requests
presentment of forward-collection checks
such as a processing center. A depositary
bank does not request presentment of for
ward-collection checks at a branch of the
bank merely by paying checks presented over
the counter.
2. (i) If the depositary bank indorsement
states the name and address of the deposi
tary bank, it must accept returned checks at
the branch, head office, or other location,
such as a processing center, indicated by
the address. If the address is too general to
identify a particular location, then the de
positary bank must accept returned checks
at any branch or head office consistent with
the address. If, for example, the address is
“New York, New York,” each branch in
New York City must accept returned
checks.
(ii) If no address appears in the depositary

§ 229.32

bank’s indorsement, the depositary bank
must accept returned checks at any branch
or head office associated with the depositary
bank’s routing number. The offices associat
ed with the routing number of a bank are
found in a publication of Rand McNally,
Key to Routing Numbers, which lists a city
and state address for each routing number,
(iii) If no routing number or address ap
pears in its indorsement, the depositary
bank must accept a returned check at any
branch or head office of the bank. The in
dorsement requirement of section 229.35
and appendix D requires that the indorse
ment contain a routing number, a name,
and a location. Consequently, this provi
sion, as well as paragraph (a) ( 2 ) (ii) of this
section, only applies where the depositary
bank has failed to comply with the indorse
ment requirement.
For ease of processing, a depositary bank
may require that returning or paying banks
returning checks to it separate returned
checks from forward-collection checks being
presented.
3 2 (b ) P aym ent

As discussed in the comment to section
229.31(c), under this regulation a paying or
returning bank does not obtain credit for a
returned check by charge-back but by, in ef
fect, presenting the returned check to the
depositary bank. This paragraph imposes an
obligation to “pay” a returned check that is
similar to the obligation to pay a forward-collection check by a paying bank, except that
the depositary bank may not return a returned
check for which it is the depositary bank.
Also, certain means of payment, such as re
mittance drafts, may only be used with the
agreement of the returning bank.
The depositary bank must pay for a re
turned check by the close of the banking day
on which it received the returned check. The
day on which a returned check is received is
determined pursuant to UCC section 4—107,
which permits the bank to establish a cut-off
hour, generally not earlier than 2:00 p.m., and
treat checks received after that hour as being
received on the next banking day. If the de
positary bank is unable to make payment to a
83

§ 229.32

returning or paying bank on the banking day
that it receives the returned check, because
the returning or paying bank is closed for a
holiday or because the time when the deposi
tary bank received the check is after the close
of Fedwire (e.g., West Coast banks with late
cut-off hours), payment may be made on the
next banking day of the bank receiving
payment.
Payment must be made so that the funds
are available for use by the bank returning the
check to the depositary bank on the day the
check is received by the depositary bank. For
example, a depositary bank meets this require
ment if it sends a wire transfer of funds to the
returning or paying bank on the day it re
ceives the returned check, even if the return
ing or paying bank has closed for the day. A
wire transfer should indicate the purpose of
the payment.
The depositary bank may use a net-settle
ment arrangement. Banks with net-settlement
agreements could net the appropriate credits
and debits for returned checks with the ac
counting entries for forward-collection checks
if they so desired. If, for purposes of establish
ing additional controls or for other reasons,
the banks involved desired a separate settle
ment for returned checks, a separate net-set
tlement agreement could be established.
The bank sending the returned check to the
depositary bank may agree to accept payment
at a later date if, for example, it does not be
lieve that the amount of the returned check or
checks warrants the costs of same-day pay
ment. Thus, a returning or paying bank may
agree to accept payment through an ACH
credit or debit transfer that settles the day af
ter the returned check is received instead of a
wire transfer that settles on the same day.
This paragraph and this subpart do not af
fect the depositary bank’s right to recover a
provisional settlement with its nonbank cus
tomer for a check that is returned. (See also
sections 229.33(d) and 229.35(d).)
3 2 ( c ) M is ro u te d R e tu r n e d C h e c k s

This paragraph permits a bank receiving a
check on the basis that it is the depositary
bank to send the misrouted returned check to
the correct depositary bank, if it can identify
84

Regulation CC Commentary

the correct depositary bank, either directly or
through a returning bank agreeing to handle
the check expeditiously under section
229.30(a). In these cases, the bank receiving
the check is acting as a returning bank. Alter
natively, the bank receiving the misrouted re
turned check must send the check back to the
bank from which it was received. In either
case the bank to which the returned check
was misrouted could receive settlement for the
check. The depositary bank would be required
to pay for the returned check under section
229.32(b), and any other bank to which the
check is sent under this paragraph would be
required to settle for the check as a returning
bank under section 229.31(c). If the check
was originally received “free,” that is, without
a charge for the check, the bank incorrectly
receiving the check would have to return the
check, without a charge, to the bank from
which it came. The bank to which the re
turned check was misrouted is required to
act promptly but is not required to meet the
expeditious-return requirements of section
229.31(a); however, it must act within its
midnight deadline. This paragraph does not
affect a bank’s duties under section
229.35(b).

3 2 ( d ) C h a rg e s

This paragraph prohibits a depositary bank
from charging the equivalent of a presentment
fee for returned checks. A returning bank,
however, may charge a fee for handling re
turned checks. If the returning bank receives a
mixed cash letter of returned checks, which
includes some checks for which the returning
bank is also the depositary bank, the fee may
be applied to all the returned checks in the
cash letter. In the case of a sorted cash letter
containing only returned checks for which the
returning bank is the depositary bank, howev
er, no fee may be charged.

Regulation CC
S E C T IO N 2 2 9 .3 3 — N o tic e o f
N onpaym ent

(a) Requirement. If a paying bank deter
mines not to pay a check in the amount of
$2,500 or more, it shall provide notice of non
payment such that the notice is received by
the depositary bank by 4:00 p.m. (local time)
on the second business day following the
banking day on which the check was present
ed to the paying bank. If the day the paying
bank is required to provide notice is not a
banking day for the depositary bank, receipt
of notice on the depositary bank’s next bank
ing day constitutes timely notice. Notice may
be provided by any reasonable means, includ
ing the returned check, a writing (including a
copy of the check), telephone, Fedwire, telex,
or other form of telegraph.
(b) Content of notice. Notice must include
the—
(1) Name and routing number of the pay
ing bank;
(2) Name of the payee(s);
(3) Amount;
(4) Date of the indorsement of the deposi
tary bank;
(5) Account number of the customer (s) of
the depositary bank;
(6) Branch name or number of the deposi
tary bank from its indorsement;
(7) Trace number associated with the in
dorsement of the depositary bank; and
( 8 ) Reason for nonpayment.
The notice may include other information
from the check that may be useful in identify
ing the check being returned and the custom
er, and, in the case of a written notice, must
include the name and routing number of the
depositary bank from its indorsement. If the
paying bank is not sure of an item of informa
tion, it shall include the information required
by this paragraph to the extent possible, and
identify any item of information for which the
bank is not sure of the accuracy with question
marks.
(c) Acceptance o f notice. The depositary bank
shall accept notices during its banking day—
(1) Either at the telephone or telegraph
number of its return-check unit indicated in
the indorsement, or, if no such number ap

§ 229.33

pears in the indorsement or if the number is
illegible, at the general-purpose telephone
or telegraph number of its head office or the
branch indicated in the indorsement; and
(2) At any other number held out by the
bank for receipt of notice of nonpayment,
and, in the case of written notice, as speci
fied in section 229.32(a).
(d) Notification to customer. If the depositary
bank receives a returned check or notice of
nonpayment, it shall send notice to its cus
tomer of the facts by midnight of the banking
day following the banking day on which it re
ceived the returned check or notice, or within
a longer reasonable time.
(e) Depositary bank without accounts. The re
quirements of this section do not apply to
checks deposited in a depositary bank that
does not maintain accounts.

§ 229.33

COMMENTARY
SECTION 229.33—Notice of
Nonpayment
33(a) Requirement
Notice of nonpayment as required by this sec
tion and written notice in lieu of return as
provided in sections 229.30(f) and 229.31(f)
serve different functions. The two kinds of no
tice, however, must meet the content require
ments of this section. The paying bank must
send a notice of nonpayment if it decides not
to pay a check of $2,500 or more. A paying
bank may rely on an amount encoded on the
check in magnetic ink to determine whether
the check is in the amount of $2,500 or more.
The notice of nonpayment carries no value,
and the check itself (or the notice in lieu of
return) must be returned. The paying bank
must ensure that the notice of nonpayment is
received by the depositary bank by 4:00 p.m.
local time on the second business day follow
ing presentment. A bank identified by routing
number as the paying bank is considered the
paying bank under this regulation and would
be required to create a notice of nonpayment
even though that bank determined that the
check was not drawn by a customer of that
bank. (See the commentary to the definition
of “paying bank” in section 229.2(z).)
The paying bank should not send a notice
of nonpayment until it has finally determined
not to pay the check. Under section
229.34(b), by sending the notice the paying
bank warrants that it has returned or will re
turn the check. If a paying bank sends a notice
and subsequently decides to pay the check,
the paying bank may mitigate its liability on
this warranty by notifying the depositary bank
that the check has been paid.
Because the return of the check itself may
serve as the required notice of nonpayment, in
many cases no notice other than the return of
the check will be necessary. For example, in
many cases the return of a check through a
clearinghouse to another participant of the
clearinghouse will be made in time to meet the
time requirements of this section. If the check
will not normally be received by the deposi
tary bank within the time limits for notice, the
86

Regulation CC Commentary
return of the check will not satisfy the notice
requirement. In determining whether the re
turned check will satisfy the notice require
ment, the paying bank may rely on the avail
ability schedules of returning banks as the
time that the returned check is expected to be
delivered to the depositary bank, unless the
paying bank has reason to know the availabil
ity schedules are inaccurate.

33(b) Content of Notices
This paragraph provides that the notice must
at a minimum contain eight elements which
are specifically enumerated. In the case of
written notices, the name and routing number
of the depositary bank are also required.
If the paying bank cannot identify the de
positary bank from the check itself, it may
wish to send the notice to the earliest collect
ing bank it can identify and indicate that the
notice is not being sent to the depositary bank.
The collecting bank may be able to identify
the depositary bank and forward the notice,
but is under no duty to do so. In addition, the
collecting bank may actually be the depositary
bank.

33(c) Acceptance of Notice
In the case of a written notice, the depositary
bank is required to accept notices at the loca
tions specified in section 229.32(a). In the
case of telephone notices, the bank may not
refuse to accept notices at the telephone num
bers identified in this section, but may transfer
calls or use a recording device. Banks may
vary by agreement the location and manner in
which notices are received.

33(d) Notification to Customer
This paragraph requires a depositary bank to
notify its customers of nonpayment upon re
ceipt of a returned check or notice of nonpay
ment. This requirement is similar to the re
quirement under the UCC as interpreted in
Appliance Buyers Credit Corp. v. Prospect Na
tional Bank, 708 F.2d 290 (7th Cir. 1983),
that a depositary bank may be liable for dam
ages incurred by its customer for its failure to
give its customer timely advice that it has re
ceived a notice of nonpayment. Notice must

Regulation CC Commentary

§ 229.33

also be given if a depositary bank receives a
notice of recovery under section 229.35(b).
The notice to the customer required under
this paragraph may also satisfy the notice re
quirement of section 229.13(g) if the deposi
tary bank invokes the reasonable-cause excep
tion of section 229.13(e) due to the receipt of
a notice of nonpayment, provided the notice
meets the other requirements of section
229.13(g).

§ 229.34

SECTION 229.34—Warranties by
Paying Bank and Returning Bank
(a) Warranties. Each paying bank or return
ing bank that transfers a returned check and
receives a settlement or other consideration
for it warrants to the transferee returning
bank, to any subsequent returning bank, to
the depositary bank, and to the owner of the
check, that—
(1) The paying bank returned the check
within its deadline under the UCC, Regula
tion I (12 CFR 210), or section 229.30(c)
of this part;
(2) It is authorized to return the check;
(3) The check has not been materially al
tered; and
(4) In the case of a notice in lieu of return,
the original check has not and will not be
returned.
These warranties are not made with respect to
checks drawn on the Treasury of the United
States, a state, or a unit of general local
government.
(b) Warranty of notice of nonpayment. Each
paying bank warrants to the transferee bank,
to any subsequent transferee bank, to the de
positary bank, and to the owner of the check
that—
(1) The paying bank returned or will re
turn the check within its deadline under the
UCC, Regulation J (12 CFR 210), or sec
tion 229.30(c) of this part;
(2) It is authorized to send the notice; and
(3) The check has not been materially
altered.
These warranties are not made with respect to
checks drawn on a state or a unit of general
local government.
(c) Damages. Damages for breach of these
warranties shall not exceed the consideration
received by the paying or returning bank, plus
finance charges and expenses related to the re
turned check, if any.
(d) Tender of defense. If a returning bank is
sued for breach of a warranty under this sec
tion, it may give a prior returning bank or the
paying bank written notice of the litigation,
and the bank notified may then give similar
notice to any other prior returning bank or
the paying bank. If the notice states that the
88

Regulation CC
paying or returning bank notified may come
in and defend, and that if the paying or re
turning bank notified does not do so, it will in
any action against it by the paying or return
ing bank giving the notice be bound by any
determination of fact common to the two liti
gations, then unless after seasonable receipt of
the notice the paying or returning bank noti
fied does come in and defend, it is so bound.

Regulation CC Commentary

COMMENTARY
SECTION 229.34— Warranties by
Paying Bank and Returning Bank
34(a) Warranty of Returned Check
This paragraph includes warranties that a re
turned check was returned by the paying bank
within the deadline under the UCC, Regula
tion J, or section 229.30(c), that the paying or
returning bank is authorized to return the
check, that the returned check has not been
materially altered, and that, in the case of a
notice in lieu of return, the original check has
not and will not be returned. The warranty
does not include a warranty that the bank
complied with the expeditious-return require
ments of sections 229.30(a) and 229.31(a).
These warranties do not apply to checks
drawn on the United States Treasury, a state,
or a unit of general local government.

34(b) Warranty of Notice of
Nonpayment
This paragraph provides for warranties for
notices of nonpayment. This warranty does
not include a warranty that the notice is accu
rate and timely under section 229.33. The re
quirements of section 229.33 that are not cov
ered by the warranty are subject to the liabili
ty provisions of section 229.38. These warran
ties are designed to give the depositary bank
more confidence in relying on notices of non
payment. This paragraph imposes liability on
a paying bank that gives notice of nonpay
ment and then subsequently returns the
check. (See the commentary on section
229.33(a).)

34(c) Damages
This paragraph adopts for the new warranties
in section 229.34(a) and (b) the warranty
damages of UCC section 4-207(3).

34(d) Tender of Defense
This paragraph adopts for this regulation the
vouching-in provisions of UCC section 3-803.

§ 229.34

§ 229.35

SECTION 229.35—Indorsements
(a) I n d o r s e m e n t s ta n d a r d s . A bank (other
than a paying bank) that handles a check dur
ing forward collection or a returned check
shall indorse the check in accordance with the
indorsement standard set forth in appendix D
to this part.
(b) L i a b i l i t y o f b a n k h a n d li n g c h e c k . A bank
that handles a check for forward collection or
return is liable to any bank that subsequently
handles the check to the extent that the subse
quent bank does not receive payment for the
check because of suspension of payments by
another bank or otherwise. This paragraph
applies whether or not a bank has placed its
indorsement on the check. This liability is not
affected by the failure of any bank to exercise
ordinary care, but any bank failing to do so
remains liable. A bank seeking recovery
against a prior bank shall send notice to that
prior bank reasonably promptly after it learns
the facts entitling it to recover. A bank may
recover from the bank with which it settled
for the check by revoking the settlement,
charging back any credit given to an account,
or obtaining a refund. A bank may have the
rights of a holder with respect to each check it
handles.
(c) I n d o r s e m e n t b y a b a n k . After a check has
been indorsed by a bank, only a bank may
acquire the rights of a holder—
(1) Until the check has been returned to
the person initiating collection; or
(2) Until the check has been specially in
dorsed by a bank to a person who is not a
bank.
(d) I n d o r s e m e n t f o r d e p o s it a r y b a n k . A de
positary bank may arrange with another bank
to apply the other bank’s indorsement as the
depositary-bank indorsement, provided that
any indorsement of the depositary bank on the
check avoids the area reserved for the deposi
tary-bank indorsement as specified in appen
dix D. The other bank indorsing as depositary
bank is considered the depositary bank for
purposes of subpart C of this part.

Regulation CC

Regulation CC Commentary

COMMENTARY
SECTION 229.35—Indorsements
35(a) Indorsement Standards
This section and appendix D require banks to
use a standard form of indorsement when in
dorsing checks during the forward-collection
and return process. The standard provides for
indorsements by all collecting and returning
banks, plus a unique standard for depositarybank indorsements. It is designed to facilitate
the identification of the depositary bank and
the prompt return of checks. The indorsement
standard specifies the information each in
dorsement must contain and its location and
ink color.
The indorsement standard requires that the
nine-digit routing number of the depositary
bank be wholly contained in an area on the
back of the check from 3.0 inches from the
leading edge to 1.5 inches from the trailing
edge of the check. This permits banks to use
encoding equipment that measures from ei
ther the leading or trailing edge of the check
to place indorsements in this area. The stan
dard does not require that the entire deposi
tary bank indorsement be contained within
the specified area, but checks will be handled
most efficiently if depositary banks place as
much information as possible within the des
ignated area to ensure that the information is
protected from being overstamped by subse
quent indorsements. The location requirement
for subsequent collecting-bank indorsements
(not including retuming-bank indorsements)
limits these indorsements to the area on the
back of the check from the leading edge to 3.0
inches from the leading edge of the check. The
area from the trailing edge of the check to 1.5
inches from the trailing edge is commonly
used for the payee indorsement.
The standard requires depositary banks to
use either purple or black ink. The Board en
courages depositary banks to indorse checks
in purple ink where possible, because use of a
unique ink color will facilitate the speedy
identification of the depositary bank. Black
ink, however, may be used when use of purple
ink is not feasible, such as where a bank uses
the same equipment to apply both depositary-

§ 229.35
bank and subsequent collecting-bank indorse
ments, and the equipment has only one source
of ink. The standard requires subsequent col
lecting banks to use an ink color other than
purple for their indorsements. The standard
also requires the depositary bank’s indorse
ment to include its nine-digit routing number
set off by arrows, the bank’s name and loca
tion, and the indorsement date, and permits
the indorsement to include other identifying
information.
The standard does not include the fraction
al routing number for depositary banks; how
ever, a bank may include its fractional routing
number or repeat its nine-digit routing num
ber in its indorsement. If a depositary bank
includes its routing number in its indorsement
more than once, paying and returning banks
will be able to identify the depositary bank
more readily.
A depositary bank is not required to place a
street address in its indorsement; however, a
bank may want to do so in order to limit the
number of locations at which it must accept
returned checks under section 229.32(a).
Banks should note, however, that section
229.32(a) also requires depositary banks to
accept returned checks at the location(s) it
accepts forward-collection checks. The inclu
sion of a depositary bank’s telephone number
where it would receive notices of large-dollar
returns in its indorsements is optional.
Under the UCC, a specific guarantee of pri
or indorsement is not necessary. (See UCC
sections 3^417(1)(a) and 4—207(1), and offi
cial comment 2 to UCC section 4-207.) Use
of guarantee language in indorsements, such
as “P.E.G.” (“prior endorsements guaran
teed”), may result in reducing the type size
used in bank indorsements, thereby making
them more difficult to read. Use of this lan
guage may make it more difficult for other
banks to identify the depositary bank. Subse
quent collecting-bank indorsements may not
include this language.
The standard for returning banks requires a
returning bank to apply an indorsement that
avoids the area on the back of the check from
3.0 inches from the leading edge of the check
to the trailing edge—the area reserved for the
payee and depositary-bank indorsements. Re
turning-bank indorsements may differ from
91

§ 229.35
subsequent collecting-bank indorsements. The
use of various methods to process returns us
ing a variety of equipment may also cause retuming-bank indorsements to vary substan
tially in form, content, and placement on the
check. Thus, a returning-bank indorsement
may be on the face of the check or on the back
of the check. A returning-bank indorsement
may not be in purple ink. No content require
ments have been adopted for the retumingbank indorsement.
If the bank maintaining the account into
which a check is deposited agrees with anoth
er bank (a correspondent, ATM operator, or
lock box operator) to have the other bank ac
cept returns and notices of nonpayment for
the bank of account, the indorsement placed
on the check as the depositary-bank indorse
ment may be the indorsement of the bank that
acts as correspondent, ATM operator, or lock
box operator as provided in paragraph (d) of
this section.
The backs of many checks bear preprinted
information or blacked out areas for various
reasons. For example, some checks are print
ed with a carbon band across the back that
allows the transfer of information from the
check to a ledger with one writing. Also, con
tracts or loan agreements are printed on cer
tain checks. Other checks that are mailed to
recipients may contain areas on the back that
are blacked out so that they may not be read
through the mailer. On the deposit side, the
payee of the check may place its indorsement
or information identifying the drawer of the
check in the area specified for the depositarybank indorsement, thus making the deposi
tary-bank indorsement unreadable.
The indorsement standard does not prohibit
the use of a carbon band or other printed or
written matter on the backs of checks and
does not require banks to avoid placing their
indorsements in these areas. Nevertheless,
checks will be handled more efficiently if de
positary banks design indorsement stamps so
that the nine-digit routing number avoids the
carbon band area. Indorsing parties other
than banks, e.g., corporations, will benefit
from the faster return of checks if they protect
the identifiability and legibility of the deposi
tary-bank indorsement by staying clear of
92

Regulation CC Commentary
the area reserved for the depositary-bank
indorsement.
Section 229.38(d) allocates responsibility
for loss resulting from a delay in return of a
check due to indorsements that are unreada
ble because of material on the back of the
check. The depositary bank is responsible for
a loss resulting from a delay in return caused
by the condition of the check arising after its
issuance until its acceptance by the depositary
bank that made the depositary bank’s indorse
ment illegible. The paying bank is responsible
for loss resulting from a delay in return
caused by indorsements that are not readable
because of other material on the back of the
check at the time that it was issued. Deposi
tary and paying banks may shift these risks to
their customers by agreement.
The standard does not require the paying
bank to indorse the check; however, if a pay
ing bank does not indorse a check that is re
turned, it should follow the indorsement stan
dard for returning banks.

35(b) Liability of Bank Handling Check
When a check is sent for forward collection,
the collection process results in a chain of in
dorsements extending from the depositary
bank through any subsequent collecting banks
to the paying bank. This section extends the
indorsement chain through the paying bank to
the returning banks, and would permit each
bank to recover from any prior indorser if the
claimant bank does not receive payment for
the check from a subsequent bank in the col
lection or return chain. For example, if a re
turning bank returned a check to an insolvent
depositary bank and did not receive the full
amount of the check from the failed bank, the
returning bank could obtain the unrecovered
amount of the check from any bank prior to it
in the collection-and-return chain including
the paying bank. Because each bank in the
collection-and-retum chain could recover
from a prior bank, any loss would fall on the
first collecting bank that received the check
from the depositary bank. To avoid circuity of
actions, the returning bank could recover di
rectly from the first collecting bank. Under
the UCC, the first collecting bank might ulti
mately recover from the depositary bank’s

§ 229.35

Regulation CC Commentary
customer or from the other parties on the
check.
Where a check is returned through the
same banks used for the forward collection of
the check, priority during the forward-collec
tion process controls over priority in the re
turn process for the purpose of determining
prior and subsequent banks under this
regulation.
Where a returning bank is insolvent and
fails to pay the paying bank or a prior return
ing bank for a returned check, section
229.39(a) requires the receiver of the failed
bank to return the check to the bank that
transferred the check to the failed bank. That
bank could then either continue the return to
the depositary bank or recover based on this
paragraph. Where the paying bank is insol
vent, and fails to pay the collecting bank, the
collecting bank could also recover from a pri
or collecting bank under this paragraph, and
the bank from which it recovered could in
turn recover from its prior collecting bank un
til the loss settled on the depositary bank
(which could recover from its customer).
A bank is not required to make a claim
against an insolvent bank before exercising its
right to recovery under this paragraph. Re
covery may be made by charge-back or by
other means. This right of recovery is also
permitted even where nonpayment of the
check is the result of the claiming bank’s neg
ligence such as failure to make expeditious re
turn, but the claiming bank remains liable for
its negligence under section 229.38.
This liability is imposed on a bank handling
a check for collection or return regardless of
whether the bank’s indorsement appears on
the check. Notice must be sent under this par
agraph to a prior bank from which recovery is
sought reasonably promptly after a bank
learns that it did not receive payment from
another bank, and learns the identity of the
prior bank. Written notice reasonably identi
fying the check and the basis for recovery is
sufficient if the check is not available. Receipt
of notice by the bank against which the claim
is made is not a precondition to recovery by
charge-back or other means; however, a bank
may be liable for negligence for failure to pro
vide timely notice. A paying or returning
bank may also recover from a prior collecting

bank as provided in sections 229.30(b) and
229.31(b). This provision is not a substitute
for a paying or returning bank making expedi
tious return under sections 229.30(a) or
229.31(b). This paragraph does not affect a
paying bank’s accountability for a check un
der UCC sections 4-213(1) and 4—302.
This paragraph affects the following provi
sions of the UCC and may affect other
provisions:
1. Section 4—212(1), in that the right to re
covery is not based on provisional settle
ment, and recovery may be had from any
prior bank. Section 4—212(1) would con
tinue to permit a depositary bank to recov
er a provisional settlement from its cus
tomer. (See section 229.33(d).)
2. Section 3-414 and related provisions (such
as sections 3-502, 3-503(2), and 3-508),
in that such provisions would not apply as
between banks, or as between the deposi
tary bank and its customer.

35 (c) Indorsement by Bank
This section protects the rights of a customer
depositing a check in a bank without requir
ing the words “pay any bank,” as required by
the UCC. (See UCC section 4-201(2).) Use
of this language in a depositary bank’s in
dorsement will make it more difficult for other
banks to identify the depositary bank. The in
dorsement standard in appendix D prohibits
such material in subsequent collecting bank
indorsements. The existence of a bank in
dorsement provides notice of the restrictive
indorsement without any additional words.

35(d) Indorsement for Depositary Bank
This section permits a depositary bank to ar
range with another bank to indorse checks.
This practice may occur when a correspon
dent indorses for a respondent, or when the
bank servicing an ATM or lock box indorses
for the bank maintaining the account in which
the check is deposited—i.e., the depositary
bank. If the indorsing bank applies the deposi
tary bank’s indorsement, checks will be re
turned to the depositary bank. If the indorsing
bank does not apply the depositary bank’s in
dorsement, by agreement with the depositary
bank it may apply its own indorsement as the
93

§ 229.35
depositary-bank indorsement. In that case, the
depositary bank’s own indorsement on the
check (if any) should avoid the location re
served for the depositary bank. The actual de
positary bank remains responsible for the
availability and other requirements of subpart
B, but the bank indorsing as depositary bank
is considered the depositary bank for purposes
of subpart C. The check will be returned, and
notice of nonpayment will be given, to the
bank indorsing as depositary bank.
Because the depositary bank for subpart B
purposes will desire prompt notice of nonpay
ment, its arrangement with the indorsing bank
should provide for prompt notice of nonpay
ment. The bank indorsing as depositary bank
may require the depositary bank to agree to
take up the check if the check is not paid even
if the depositary bank’s indorsement does not
appear on the check and it did not handle the
check. The arrangement between the banks
may constitute an agreement varying the ef
fect of provisions of subpart C under section

229.37.

Regulation CC Commentary

Regulation CC

§ 229.36

SECTION 229.36— Presentment of
Check
(a) P a y a b le - t h r o u g h a n d p a y a b l e - a t c h e c k s .
A check payable at or through a paying bank
is considered to be drawn on that bank for
purposes of the expeditious-return and noticeof-nonpayment requirements of this subpart.
(b)

R e c e i p t a t b a n k o f f i c e o r p r o c e s s in g c e n

A check is considered received by the pay
ing bank when it is received—
(1) At a location to which delivery is re
quested by the paying bank;
(2) At an address of the bank associated
with the routing number on the check,
whether in magnetic ink or in fractional
form;
(3) At any branch or head office, if the
bank is identified on the check by name
without address; or
(4) At a branch, head office, or other loca
tion consistent with the name and address
of the bank on the check if the bank is iden
tified on the check by name and address.
ter.

(c) T r u n c a tio n . A bank may present a check
to a paying bank by transmission of informa
tion describing the check in accordance with
an agreement with the paying bank. A trunca
tion agreement may not extend return times
or otherwise vary the requirements of this
part with respect to parties interested in the
check that are not party to the agreement.
(d)

L ia b ilit y o f b a n k d u r in g fo r w a r d c o lle c

Settlements between banks for the for
ward collection of a check are final when
made; however, a collecting bank handling a
check for forward collection may be liable to a
prior collecting bank, including the depositary
bank, and the depositary bank’s customer.
tio n .

§ 229.36

COMMENTARY
SECTION 229.36—Presentment of
Checks
36(a) Payable-Through and Payable-at
Checks
For purposes of subpart C, the regulation de
fines a payable-through or payable-at bank
(which could be designated the collectiblethrough or collectible-at bank) as a paying
bank. The requirements of section 229.30(a)
and the notice-of-nonpayment requirements
of section 229.33 are imposed on a payablethrough or payable-at bank and are based on
the time of receipt of the forward-collection
check by the payable-through or payable-at
bank. This provision is intended to speed the
return of checks that are payable through or
at a bank to the depositary bank.

Regulation CC Commentary
4—204(3).) If a bank designates different loca
tions for the presentment of forward-collec
tion checks bearing different routing numbers,
for purposes of this paragraph it only requests
presentment of checks bearing a particular
routing number at the location designated for
receipt of forward-collection checks bearing
that routing number.

2. Delivery may be made at an office of the
bank associated with the routing number on
the check. The office associated with the rout
ing number of a bank is found in a publication
of Rand McNally, Key to Routing Numbers,
which lists a city and state address for each
routing number. Checks are generally handled
by collecting banks on the basis of the nine
digit routing number encoded in magnetic ink
(or on the basis of the fractional-form routing
number if the magnetic ink characters are ob
literated) on the check, rather than the print
ed name or address. The definition of a paying
bank in section 229.2(z) includes a bank des
36(b) Receipt at Bank Office or
ignated by routing number, whether or not
Processing Center
there is a name on the check, and whether or
This paragraph seeks to facilitate efficient
not any name is consistent with the routing
presentment of checks to promote early return
number. Where a check is payable by one
or notice of nonpayment to the depositary
bank, but payable through another, the rout
bank, and clarifies the law as to the effect of
ing number is that of the payable-through
presentment by routing number. This para
bank, not that of the payor bank. As the payor
graph differs from section 229.32(b) because
bank has selected the payable-through bank as
presentment of checks differs from delivery of
the point through which presentment is to be
returned checks.
made, it is proper to treat the payable-through
The paragraph specifies four locations at
bank as the paying bank for purposes of this
which the paying bank must accept present
section.
ment of checks. Where the check is payable
There is no requirement in the regulation
through a bank and the check is sent to that
that the name and address on the check agree
bank, the payable-through bank is the paying
with the address associated with the routing
bank for purposes of this subpart, regardless
number on the check. A bank may generally
of whether the paying bank must present the
control the use of its routing number, just as it
check to another bank or to a nonbank payor
does the use of its name. The address associat
for payment.
ed with the routing number may be a process
1. Delivery of checks may be made, and pre ing center.
In some cases, a paying bank may have sev
sentment is considered to occur, at a location
(including a processing center) requested by eral offices in the city associated with the rout
the paying bank. This is the way most checks ing number. In such a case, it would not be
are presented by banks today. This provision reasonable or efficient to require the present
adopts the common-law rule of a number of ing bank to sort the checks by more specific
legal decisions that the processing center acts branch addresses that might be printed on the
as the agent of the paying bank to accept pre checks, and to deliver the checks to each
sentment and to begin the time for processing branch. A collecting bank would normally de
of the check. (See also UCC section liver all checks to one location. In cases where
96

Regulation CC Commentary
checks are delivered to a branch other than
the branch on which they may be drawn,
computer and courier communication among
branches should permit the paying bank to de
termine quickly whether to pay the check.
3. If the check specifies the name of the pay
ing bank but no address, the bank must accept
delivery at any office. Where delivery is made
by a person other than a bank, or where the
routing number is not readable, delivery will
be made based on the name and address of the
paying bank on the check. If there is no ad
dress, delivery may be made at any office of
the paying bank. This provision is consistent
with UCC section 3-504(2), which states that
presentment for payment may be made at the
place specified in the instrument, or, if there is
none, at the place of business of the party to
pay. Thus, there is a trade-off for a paying
bank between specifying a particular address
on a check to limit locations of delivery and
simply stating the name of the bank to en
courage wider currency for the check.
4. If the check specifies the name and address
of a branch or head office, or other location
(such as a processing center), the check may
be delivered by delivery to that office or other
location. If the address is too general to iden
tify a particular office, delivery may be made
at any office consistent with the address. For
example, if the address is “San Francisco, Cal
ifornia,” each office in San Francisco must ac
cept presentment. The designation of an ad
dress on the check is generally in the control
of the paying bank.
This paragraph may affect UCC section
3-504(2) (c) to the extent that the UCC re
quires presentment to occur at a place speci
fied in the instrument.

36(c) Truncation
Truncation includes a variety of procedures in
which the physical check is held or delayed by
the depositary or collecting bank, and the in
formation from the check is transmitted to the
paying bank electronically. Presentment takes
place when the paying bank receives the elec
tronic transmission. This process has the
potential to improve the efficiency of check
processing, but use of truncation has been lim

§ 229.36
ited, partly because of uncertainties about
whether the UCC permits it without the
agreement of all parties. This paragraph al
lows truncation by agreement with the paying
bank; however, such agreement may not prej
udice the interests of prior parties to the
check. For example, a truncation agreement
may not extend the paying bank’s time for re
turn. Such an extension could damage the
depositary bank, which must make funds
available to its customers under mandatory
availability schedules.

36(d) Liability of Bank During Forward
Collection
This paragraph makes settlement between
banks during forward collection final when
made, subject to any deferrment of credit, just
as settlements between banks during the re
turn of checks are final. In addition, this para
graph clarifies that this change does not affect
the liability scheme under UCC section 4—201
during forward collection of a check. That
UCC section provides that, unless a contrary
intent clearly appears, a bank is an agent or
subagent of the owner of a check, but that
article 4 of the UCC applies even though a
bank may have purchased an item and is the
owner of it. This paragraph preserves the lia
bility of a collecting bank to prior collecting
banks and the depositary bank’s customer for
negligence during the forward collection of a
check under the UCC, even though this para
graph provides that settlement between banks
during forward collection is “final” rather
than “provisional.” Settlement by a paying
bank is not considered to be final payment for
the purposes of UCC section 4—213(1) (b) or
(d), because a paying bank has the right to
recover settlement from a returning or deposi
tary bank to which it returns a check under
this subpart. Other provisions of the UCC not
superseded by this subpart, such as section
4—202, also continue to apply to the forward
collection of a check and may apply to the
return of a check. (See definition of “return
ing bank” in section 229.2(cc).)

§ 229.37
S E C T I O N 2 2 9 .3 7 — V a r ia t i o n b y
A greem ent

The effect of the provisions of subpart C may
be varied by agreement, except that no agree
ment can disclaim the responsibility of a bank
for its own lack of good faith or failure to
exercise ordinary care, or can limit the mea
sure of damages for such lack or failure; but
the parties may determine by agreement the
standards by which such responsibility is to be
measured if such standards are not manifestly
unreasonable.

Regulation CC

Regulation CC Commentary

COMMENTARY
SECTION 229.37—Variations by
Agreement
This section is similar to UCC section 4-103,
and permits consistent treatment of agree
ments varying article 4 or subpart C, given the
substantial interrelationship of the two docu
ments. To achieve consistency, the official
comment to UCC section 4-103(1) (which in
turn follows UCC section 4-102(3)) should
be followed in construing this section. For ex
ample, as stated in official comment 2 to sec
tion 4—103, owners of items and other inter
ested parties are not affected by agreements
under this section unless they are parties to
the agreement or are bound by adoption, rati
fication, estoppel, or the like. In particular,
agreements varying this subpart that delay the
return of a check beyond the times required
by this subpart may result in liability under
section 229.38 to entities not party to the
agreement. This section is consistent with the
limits on truncation agreements in section
229.36(c).
The Board has not followed UCC section
4-103(2), which treats Federal Reserve regu
lations and operating letters, clearinghouse
rules, and the like as agreements, and permits
them to apply to parties that have not specifi
cally assented. For this particular regulation,
which seeks to protect many of those parties,
that treatment does not appear warranted.
The following are examples of situations
where variation by agreement is permissible,
subject to the limitations of this section:

§ 229.37
d. A paying bank may require its customer to
assume the paying bank’s liability for de
layed or missent checks where the delay or
missending is caused by markings placed
on the check by the paying bank’s custom
er that obscured a properly placed indorse
ment of the depositary bank. (See section
229.38(d).)
e. A collecting or paying bank may agree to
accept forward-collection checks without
the indorsement of a prior collecting bank.
(See section 229.35(a).)
f. A bank may agree to accept returned
checks without the indorsement of a prior
bank. (See section 229.35(a).)
The Board expects to review the types of
variation by agreement that develop under
this section and will consider whether it is
necessary to limit certain variations.

a. A depositary bank may authorize another
bank to apply the other bank’s indorsement
to a check as the “depositary bank.” (See
section 229.35(d).)
b. A depositary bank may authorize return
ing banks to commingle qualified returned
checks with forward-collection checks.
(See section 229.32(a).)
c. A depositary bank may limit its liability to
its customer in connection with the late re
turn of a deposited check where the late
ness is caused by markings on the check by
the depositary bank’s customer or prior in
dorser in the area of the depositary bank
indorsement. (See section 229.38(d).)
99

§ 229.38

Regulation CC

SECTION 229.38—Liability
(a)

S ta n d a r d

o f ca r e ;

lia b ility ;

m ea su re

that the condition of the back of a check when
issued by it or its customer adversely affects
the ability of a bank to indorse the check legi
bly in accordance with section 229.35. A de
positary bank is responsible for damages un
der paragraph (a) of this section to the extent
that the condition of the back of a check aris
ing after the issuance of the check and prior to
acceptance of the check by it adversely affects
the ability of a bank to indorse the check legi
bly in accordance with section 229.35. Re
sponsibility under this paragraph shall be
treated as negligence of the paying or deposi
tary bank for purposes of paragraph (c) of
this section.

A bank shall exercise ordinary care
and act in good faith in complying with the
requirements of this subpart. A bank that fails
to exercise ordinary care or act in good faith
under this subpart may be liable to the deposi
tary bank, the depositary bank’s customer, the
owner of a check, or another party to the
check. The measure of damages for failure to
exercise ordinary care is the amount of the
loss incurred, up to the amount of the check,
reduced by the amount of the loss that party
would have incurred even if the bank had ex
ercised ordinary care. A bank that fails to act
in good faith under this subpart may be liable (e) T i m e li n e s s o f a c t io n . If a bank is delayed
for other damages, if any, suffered by the par in acting beyond the time limits set forth in
ty as a proximate consequence. Subject to a this subpart because of interruption of com
bank’s duty to exercise ordinary care or act in munication or computer facilities, suspension
good faith in choosing the means of return or of payments by a bank, war, emergency condi
notice of nonpayment, the bank is not liable tions, failure of equipment, or other circum
for the insolvency, neglect, misconduct, mis stances beyond its control, its time for acting
take, or default of another bank or person, or is extended for the time necessary to complete
for loss or destruction of a check or notice of the action, if it exercises such diligence as the
nonpayment in transit or in the possession of circumstances require.
others. This section does not affect a paying
. (f) E x c l u s i o n . Section 229.21 of this part and
bank’s liability to its customer under the UCC
section 611(a), (b), and (c) of the act (12
or other law.
USC 4010(a), (b), and (c)) do not apply to
(b) P a y i n g b a n k 's f a i l u r e to m a k e t im e l y r e this subpart.
tu r n . If a paying bank fails both to comply
(g) J u r is d i c t io n . Any action under this sub
with section 229.30(a) and to comply with
part may be brought in any United States dis
the deadline for return under the UCC, Regu
trict court, or in any other court of competent
lation J (12 CFR 210), or section 229.30(c)
jurisdiction, and shall be brought within one
in connection with a single nonpayment of a
year after the date of the occurrence of the
check, the paying bank shall be liable under
violation involved.
either section 229.30(a) or such other provi
(h) R e l i a n c e o n B o a r d r u lin g s . No provision
sion, but not both.
of this subpart imposing any liability shall ap
(c) C o m p a r a t iv e n e g lig e n c e . If a person, in
ply to any act done or omitted in good faith in
cluding a bank, fails to exercise ordinary care
conformity with any rule, regulation, or inter
or act in good faith under this subpart in in
pretation thereof by the Board, regardless of
dorsing a check (section 229.35), accepting a
whether the rule, regulation, or interpretation
returned check or notice of nonpayment (sec
is amended, rescinded, or determined by judi
tions 229.32(a) and 229.33(c)), or otherwise,
cial or other authority to be invalid for any
the damages incurred by that person under
reason after the act or omission has occurred.
section 229.38(a) shall be diminished in pro
portion to the amount of negligence or bad
faith attributable to that person.
d a m a g es.

(d) R e s p o n s i b i li t y f o r b a c k o f c h e c k . A pay
ing bank is responsible for damages under
paragraph (a) of this section to the extent

100

Regulation CC Commentary

COMMENTARY
SECTION 229.38—Liability
38(a) Standard of Care; Liability;
Measure of Damages
The standard of care established by this sec
tion applies to any bank covered by the re
quirements of subpart C of the regulation.
Thus, the standard of care applies to a paying
bank under sections 229.30 and 229.33, to a
returning bank under section 229.31, to a de
positary bank under sections 229.32 and
229.33, to a bank erroneously receiving a re
turned check or written notice of nonpayment
as depositary bank under sections 229.32(d),
and to a bank indorsing a check under section
229.35. The standard of care is similar to the
standard imposed by UCC sections 1-203 and
4-103(1).
A bank not meeting this standard of care is
liable to the depositary bank, the depositary
bank’s customer, the owner of the chepk, or
another party to the check. The depositary
bank’s customer is usually a depositor of a
check in the depositary bank (but see section
229.35(d)). The measure of damages stated
derives from UCC sections 4—103(5) and
4-202(3). This subpart does not absolve a
collecting bank of liability to prior collecting
banks under UCC section 4-201.
Under this measure of damages, a deposi
tary bank or other person must show that the
damage incurred results from the negligence
proved. For example, the depositary bank
may not simply claim that its customer will
not accept a charge-back of a returned check,
but must prove that it could not charge back
when it received the returned check and could
have charged back if no negligence had oc
curred, and must first attempt to collect from
its customer. (See Marcoux v. Van Wyk, 572
F.2d 651 (8th Cir. 1978); Appliance Buyers
Credit Corp. v. Prospect N a tl Bank, 708 F.2d
290 (7th Cir. 1983).) Generally, a paying or
returning bank’s liability would not be re
duced because the depositary bank did not
place a hold on its customer’s deposit before it
learned of nonpayment of the check.
This paragraph also states that it does not
affect a paying bank’s liability to its customer.
Jnder UCC section 4—402, for example, a
paying bank is liable to its customer for
wrongful dishonor, which is different from
failure to exercise ordinary care and has a dif
ferent measure of damages.

§ 229.38

38(b) Paying Bank’s Failure to Make
Timely Return
Section 229.30(a) imposes requirements on
the paying bank for expeditious return of a
check and leaves in place the UCC deadlines
(as they may be modified by section
229.30(c)), which may allow return at a dif
ferent time. This paragraph clarifies that the
paying bank could be liable for failure to meet
either standard, but not for failure to meet
both. The regulation intends to preserve the
paying bank’s “accountability” for missing its
midnight or other deadline under the UCC
(e.g., sections 4—213 and 4—302), provisions
that are not incorporated in this regulation,
but may be useful in establishing the time of
final payment by the paying bank.

38(c) Comparative Negligence
This paragraph establishes a “pure” compara
tive-negligence standard for liability under
subpart C of this regulation. This compara
tive-negligence rule may have particular appli
cation where a paying or returning bank de
lays in returning a check because of difficulty
in identifying the depositary bank. Some ex
amples will illustrate liability in such cases. In
each example, it is assumed that the returned
check is received by the depositary bank after
it has made funds available to its customer,
that it may no longer recover the funds from
its customer, and that the inability to recover
the funds from the customer is due to a delay
in returning the check contrary to the stan
dards established by sections 229.30(a) or
229.31(a).
1. If a depositary bank fails to use the in
dorsement required by this regulation, and
this failure is caused by a failure to exercise
ordinary care, and if a paying or returning
bank is delayed in returning the check be
cause additional time is required to identify
the depositary bank or find its routing
number, the paying or returning bank’s lia
bility to the depositary bank would be re
duced or eliminated.
2. If the depositary bank uses the standard
indorsement, but that indorsement is ob
scured by a subsequent collecting bank’s
indorsement, and a paying or returning
bank is delayed in returning the check be
cause additional time was required to iden
tify the depositary bank or find its routing
number, the paying or returning bank may
not be liable to the depositary bank because

101

§ 229.38
the delay was not due to its negligence.
Nonetheless, the collecting bank may be li
able to the depositary bank to the extent
that its negligence in indorsing the check
caused the paying or returning bank’s
delay.
3. If a depositary bank accepts a check that
has printing, a carbon band, or other mate
rial on the back of the check that existed at
the time the check was issued, and the de
positary bank’s indorsement is obscured by
the printing, carbon band, or other materi
al, and a paying or returning bank is de
layed in returning the check because
additional time was required to identify the
depositary bank, the returning bank may
not be liable to the depositary bank because
the delay was not due to its negligence.
Nonetheless, the paying bank may be liable
to the depositary bank to the extent that
the printing, carbon band, or other materi
al caused the delay.

38(d) Responsibility for Back of Check
The indorsement standard in section 229.35 is
most effective if the back of the check remains
clear of other matter that may obscure bank
indorsements. Because bank indorsements are
usually applied by automated equipment, it is
not possible to avoid pre-existing matter on
the back of the check. For example, bank in
dorsements are not required to avoid a carbon
band or printed, stamped, or written terms or
notations on the back of the check. Accord
ingly, this provision places responsibility on
the paying bank or depositary bank, as appro
priate, for keeping the back of the check clear
for bank indorsements during forward collec
tion and return.
The paying bank is responsible for the con
dition of the check when it is issued by it or its
customer. (It would not be responsible for a
check issued by a person other than its cus
tomer.) Thus, the paying bank would be re
sponsible for the adverse effect (if any) of a
carbon band or other material placed on the
back of a check before issuance. The paying
bank may contract with its customers with re
spect to such responsibility.
The depositary bank is responsible for the
condition of the check arising after it is issued
and before it is accepted by the depositary
bank, as well as any condition of the check
arising during its handling of the check. The
depositary bank would be responsible for the

102

Regulation CC Commentary
adverse effect (if any) of a stamp placed on
the check by its customer or a prior indorser.
The depositary bank may refuse to accept a
check whose back is unreasonably obscured or
contract with its customers with respect to
such responsibility.
Responsibility under this paragraph is
treated as negligence for comparative-negli
gence purposes, and the contribution to dam
ages under this paragraph is treated in the
same way as the degree of negligence under
paragraph (c) of this section.

38(e) Timeliness of Action
This paragraph excuses certain delays. It
adopts the standard of UCC section 4-108(2)
with the addition of “failure of equipment”
and “interruption of computer facilities” as
causes of delay.

3 8 (0 Exclusion
This paragraph provides that the civil-liability
and class-action provisions, particularly the
punitive-damage provisions of sections 611(a)
and (b), and the bona fide error provision of
611(c) of the act (12 USC 4010(a), (b), and
(c)) do not apply to regulatory provisions
adopted to improve the efficiency of the pay
ments mechanism. Allowing punitive dam
ages for delays in the return of checks where
no actual damages are incurred would only
encourage litigation and provide little or no
benefit to the check-collection system. In view
of the provisions of paragraph (a), which in
corporate traditional bank collection stan
dards based on negligence, the provision on
bona fide error is not included in subpart C.

38(g) Jurisdiction
The act confers subject-matter jurisdiction on
courts of competent jurisdiction and provides
a time limit for civil actions for violations of
this subpart.

38(h) Reliance on Board Rulings
This provision shields banks from civil liabili
ty if they act in good faith in reliance on any
rule, regulation, or interpretation of the
Board, even if it were subsequently deter
mined to be invalid. Banks may rely on the
commentary to this regulation, which is is
sued as an official Board interpretation, as
well as on the regulation itself.

§ 229.39

Regulation CC

SECTION 229.39— Insolvency of Bank
(a) D u t y o f re c e iv e r . A check or returned
check in, or coming into, the possession of a
paying, collecting, depositary, or returning
bank that suspends payment, and which is not
paid, shall be returned by the receiver, trustee,
or agent in charge of the closed bank to the
bank or customer that transferred the check
to the closed bank.
(b)

P r efer en ce

a g a in s t p a y i n g

o r d e p o s it a r y

If a paying or depositary bank finally
pays a check or returned check and suspends
payment without making a settlement for the
check with the prior bank which is or be
comes final, the prior bank has a preferred
claim against the paying or depositary bank.
bank.

(c)

P r e f e r e n c e a g a in s t c o lle c t in g , p a y in g ,

If a collecting, paying, or re
turning bank receives settlement from a subse
quent bank for a check or returned check,
which settlement is or becomes final, and sus
pends payments without making a settlement
for the check with the prior bank, which is or
becomes final, the prior bank has a preferred
claim against the collecting or returning bank.
r e t u r n in g b a n k .

(d) F i n a li t y o f s e t t le m e n t . If a paying or de
positary bank gives, or a collecting, paying, or
returning bank gives or receives, a settlement
for a check or returned check and thereafter
suspends payment, the suspension does not
prevent or interfere with the settlement be
coming final if such finality occurs automati
cally upon the lapse of a certain time or the
happening of certain events.

103

§ 229.39

COMMENTARY
SECTION 229.39—Insolvency of Bank
These provisions cover situations where a
bank becomes insolvent during collection or
return, and are derived from UCC section
4—214. They are intended to apply to all
banks.

39(a) Duty of Receiver
This paragraph requires a receiver of a closed
bank to return a check to the prior bank if it
does not pay for the check. This permits the
prior bank, as holder, to pursue its claims
against the closed bank or prior indorsers on
the check.

39(b) Preference Against Paying or
Depositary Bank
This paragraph gives a bank a preferred claim
against a closed paying or depositary bank
that finally pays a check without settling for
it. If the bank with a preferred claim under
this paragraph recovers from a prior bank or
other party to the check, the prior bank or
other party to the check is subrogated to the
preferred claim.

39(c) Preference Against Paying,
Collecting, or Depositary Bank
This paragraph gives a bank a preferred claim
against a closed collecting, paying, or return
ing bank that receives settlement but does not
settle for a check. (See the commentary to
section 229.35(b) for discussion of prior and
subsequent banks.) As in the case of section
229.39(b), if the bank with a preferred claim
under this paragraph recovers from a prior
bank or other party to the check, the prior
bank or other party to the check is subrogated
to the preferred claim.

39(d) Finality of Settlement
This paragraph provides that insolvency does
not interfere with the finality of a settlement,
such as a settlement by a paying bank that
becomes final by expiration of the midnight
deadline.

104

Regulation CC Commentary

Regulation CC

§ 229.40

SECTION 229.40—Effect of Merger
Transaction
For purposes of this subpart, two or more
banks that have engaged in a merger transac
tion may be considered to be separate banks
for a period of one year following the consum
mation of the merger transaction.

105

§ 229.40

COMMENTARY
SECTION 229.40—Effect on Merger
Transaction
When banks merge, there is normally a period
of adjustment required before their operations
are consolidated. To allow for this adjustment
period, the regulation provides that the
merged banks may be treated as separate
banks for a period of up to one year after the
consummation of the transaction. The term
“merger transaction” is defined in section
229.2 (t). This rule affects the status of the
combined entity in a number of areas in this
subpart, for example:
1. The paying bank’s responsibility for ex
peditious return (§ 229.30).
2. The returning bank’s responsibility for
expeditious return (§ 229.31).
3. Whether a returning bank is entitled to
an extra day to qualify a return that will
be delivered directly to a depositary
bank that has merged with the returning
bank (§ 229.31(a)).
4. Where the depositary bank must accept
returned checks (§ 229.32(a)).
5. Where the depositary bank must accept
notice of nonpayment (§ 229.33(c)).
6. Where a paying bank must accept pre
sentment of checks (§ 229.36(b)).

106

Regulation CC Commentary

Regulation CC

§ 229.41

SECTION 229.41—Relation to State
Law
The provisions of this subpart supersede any
inconsistent provisions of the UCC as adopted
in any state, or of any other state law, but
only to the extent of the inconsistency.

107

§ 229.41
COMMENTARY
SECTION 229.41—Relation to State
Law
This section specifies that state law relating to
the collection of checks is only preempted to
the extent that it is inconsistent with this reg
ulation. Thus, this regulation is not a com
plete replacement for state laws relating to the
collection or return of checks.

108

Regulation CC Commentary

Regulation CC

§ 229.42

SECTION 229.42—Exclusions
The expeditious-return (§§ 229.30(a) and
229.31(a))
and
notice-of-nonpayment
(§ 229.33) requirements of this subpart do
not apply to a check drawn upon the United
States Treasury, to a U.S. Postal Service mon
ey order, or to a check drawn on a state or a
unit of general local government that is not
payable through or at a bank.

109

§ 229.42
COMMENTARY
SECTION 229.42—Exclusions
Checks drawn on the United States Treasury,
U.S. Postal Service money orders, and checks
drawn on states and units of general local gov
ernment that are presented directly to the
state or unit of general local government and
that are not payable through or at a bank are
excluded from the coverage of the expedi
tious-return and notice-of-nonpayment re
quirements of subpart C of this regulation.
Other provisions of this subpart continue to
apply to the checks. This exclusion does not
apply to checks drawn by the U.S. govern
ment on banks.

110

Regulation CC Commentary

Regulation CC

APPENDIX A— Routing Number
Guide to Next-Day Availability Checks
and Local Checks
Each bank is assigned a routing number by
Rand McNally & Co., as agent for the Ameri
can Bankers Association. The routing number
takes two forms: a fractional form and a nine
digit form. A paying bank is generally
identified on the face of a check by its routing
number in both the fractional form (which
generally appears in the upper right-hand cor
ner of the check) and the nine-digit form
(which is printed in magnetic ink in a strip
along the bottom of the check). Where a
check is payable by one bank but payable
through another bank, the routing number ap
pearing on the check is that of the payablethrough bank, not the payor bank.
The first four digits of the nine-digit routing
number and the denominator of the fractional
routing number form the Federal Reserve
routing symbol, which identifies the Federal
Reserve District, the Federal Reserve office,
and the clearing arrangements used by the
paying bank.

Appendix A
F ir s t F e d e r a l R e se r v e D is tr ic t

(Federal Reserve Bank of Boston)
Windsor Locks Office
Head Office
0111
01101
0116
0113
0114
0117
0118
0115
21102
0119
02113
2113
2114
2111
2115
2116
2117
2118
2119
22113
Lewiston Office

0112
2112

S e c o n d F e d e r a l R e se r v e D is tr ic t

(Federal Reserve Bank of New York)
Head Office

Buffalo Branch

0215
0216
0260
2215
2216
2260

0223

Cranford Office
0212
0270
2212

Jericho Office
0214
0219
2214
2219
2280

0210

0220
2220

2223

Utica Office
0213
2213
1The first two digits identify the Federal Reserve Dis
trict. Thus 01 identifies the First Federal Reserve District
(Boston), and 12 identifies the Twelfth District (San
Francisco).
2 Adding 2 to the first digit denotes a thrift institution.
Thus 21 identifies a thrift in the First District, and 32 de
notes a thrift in the Twelfth District.
3 Banks in Fairfield County, Connecticut, are members
of the Federal Reserve Bank of New York and therefore
have Second District routing numbers. Their checks, how
ever, are processed by the Windsor Locks office. Thus,
checks drawn on banks with 0211 or 2211 routing numbers
would not be local checks for Second District depositary
banks.

Ill

Appendix A

Regulation CC

T h ir d F e d e r a l R e s e r v e D is tr ic t

(Federal Reserve Bank of Philadelphia)
Head Office
0310
0311
0312
0313
0319
0360

2310
2311
2312
2313
2319
2360

Charlotte Branch
0530
0531
2530
2531

Columbia Office
0532
0539
2532
2539

Charleston Office
0515
0519
2515
2519

F o u r th F e d e r a l R e se r v e D istr ic t

(Federal Reserve Bank of Cleveland)
Head Office
0410
0412
2410
2412

Pittsburgh Branch
0430
0432
0434
0433
2430
2432
2433
2434

Cincinnati Branch
0420
0421
0422
0423
2420
2421
2422
2423
Columbus Office
0440
0441
0442
2440
2441
2442

F ift h F e d e r a l R e se r v e D istr ic t

(Federal Reserve Bank of Richmond)
Head Office
0510
0514
2510
2514

112

Baltimore Branch
0520
0521
0522
0540
0550
0560
0570
2520
2521
2522
2540
2550
2560
2570

S ix t h F e d e r a l R e se r v e D istr ic t

(Federal Reserve Bank of Atlanta)
Head Office
0610
0611
0612
0613
2610
2611
2612
2613

Birmingham Branch
0620
0621
0622
2620
2621
2622

Jacksonville Branch
0630
0631
0632
2630
2631
2632

Nashville Branch
0640
0641
0642
2640
2641
2642

New Orleans Branch
0650
0651
0652
0653
0654
0655
2650
2651
2652
2653
2654
2655

Miami Branch
0660
0670
2660
2670

Regulation CC

Appendix A

S e v e n th F e d e r a l R e s e r v e D is tr ic t

N in th F e d e r a l R e se r v e D is tr ic t

(Federal Reserve Bank of Chicago)

(Federal Reserve Bank of Minneapolis)

Head Office
0710
0711
0712
0719
2710
2711
2712
2719

Detroit Branch
0720
0724
2720
2724

Des Moines Office
0730
0739
2730
2739

Indianapolis Office
0740
0749
2740
2749

Head Office
0910
0911
0912
0913
0914
0915
0918
0919
2910
2911
2912
0960
2913
2914
2915
2918
2919
2960

Milwaukee Office
0750
0759
2750
2759

Helena Branch
0920
0921
0929
2920
2921
2929

T e n th F e d e r a l R e se r v e D is tr ic t

(Federal Reserve Bank of Kansas City)

E ig h th F e d e r a l R e se r v e D istr ic t

(Federal Reserve Bank of St. Louis)
Head Office
0810
0812
0815
0819
0865
2810
2812
2815
2819
2865

Little Rock Branch
0820
0829
2820
2829

Louisville Branch
0813
0830
0839
0863
2813
2830
2839
2863

Memphis Branch
0840
0841
0842
0843
2840
2841
2842
2843

Head Office
1010
1011
1012
1019
3010
3011
3012
3019

Oklahoma City
Branch
1030
1031
1039
3030
3031
3039

Denver Branch
1020
1021
1022
1023
1070
3020
3021
3022
3023
3070

Omaha Branch
1040
1041
1049
3040
3041
3049

113

Regulation CC

Appendix A
E le v e n th F e d e r a l R e se r v e D is tr ic t

U .S . T r e a s u r y C h e c k s a n d P o s t a l M o n e y

(Federal Reserve Bank of Dallas)

O rders

Head Office
1110
1111
1113
1119
3110
3111
3113
3119

El Paso Branch
1120
1122
1123
1163
3120
3122
3123
3163

Houston Branch
1130
1131
3130
3131

San Antonio Branch
1140
1149
3140
3149

T w e lf t h F e d e r a l R e s e r v e D i s t r i c t

(Federal Reserve Bank of San Francisco)
Head Office
1210
1211
1212
1213
3210
3211
3212
3213

Los Angeles Branch
1220
1221
1222
1223
1224
3220
3221
3222
3223
3224

Portland Branch
1230
1231
1232
1233
3230
3231
3232
3233

Salt Lake City Branch
1240
1241
1242
1243
3240
3241
3242
3243

Seattle Branch
1250
1251
1252
3250
3251
3252

114

U.S. Treasury Checks
0000 0050 5
0000 0051 8

Postal Money
Orders
0000 0119 3
0000 0800 2

F e d e r a l R e s e r v e O f f ic e s

0110
0111
0112
0210
0220
0212
0214
0213
0310
0410
0420
0430
0440
0510
0520
0530
0539
0519
0610
0620
0630
0640
0650
0660

0001
0048
0048
0120
0026
0400
0950
0500
0004
0001
0043
0030
0050
0003
0027
0020
0008
0002
0014
0019
0019
0010
0021
0010

5
1
8
8
6
5
9
1
0
4
7
0
3
3
8
6
9
3
6
0
9
1
0
9

0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1230
1240
1250

0030
0029
0033
0020
0012
0004
0013
0059
0003
0008
0026
0004
0019
0024
0012
0003
0001
0004
0072
0037
0016
0001
0031
0001

1
0
8
1
9
5
8
3
9
0
7
8
9
0
6
8
1
9
1
4
6
3
3
1

0810
0820
0910
1010
1011
1020
1030
1040
1119
1210
1211
1222
1250

0091
0125
0091
0091
0194
0603
0362
0019
1083
0070
3994
4014
0050

9
0
2
2
7
8
9
7
0
1
4
6
3

F ed eral H om e Loan B a n ks

0110
0212
0215
0260
0410
0420
0430
0530
0610
0640
0710
0724
0730
0740

0053
0639
0212
0973
0291
0091
0143
1174
0876
0091
0450
1338
0091
0101

6
1
1
9
5
6
5
5
6
0
1
2
4
9

Appendix B -l

Regulation CC
A PP E N D IX B - l — Reduction of
Schedules for Certain Nonlocal Checks
Under the Temporary Schedule
A depositary bank that is located in the fol
lowing check-processing territories shall make

funds deposited in an account by a nonlocal
check described below available for withdraw
al not later than the number of business days
following the banking day on which funds are
deposited, as specified below.

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office
B o s to n

Depositary banks (0110, 2110) to:
0210
0260
0280

0310
0360
0710

5 business days
2260
2310
2360

2710

W in d s o r L o c k s

None
L e w is t o n

None
N ew Y ork

Depositary banks (0210, 0260, 2260, 0215, 2215, 0216, 2216) to:
0214
0219

0280

2214

Depositary banks (0210,0260, 2260, 0215, 2215, 0216, 2216) to:
0110
0212
0213
0220
0270
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250

2110
2212
2213
2220
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730
2740

4 business days

2219
5 business days

2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

115

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office
J e r ic h o

Depositary banks (0214, 2214, 0219, 2219, 0280) to:
0210

0260

4 business days

2260

Depositary banks (0214, 2214, 0219, 2219, 0280) to:
0110
0212
0213
0215
0216
0220
0270
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

116

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250

2110
2212
2213
2215
2216
2220
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730

5 business days
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Regulation CC

Appendix B -l
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office
C r a n fo r d

Depositary banks (0212, 0270, 2212) to:
0210

0260

4 business days
0280

2260

2110
2213
2214
2215
2216
2219
2220
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Depositary banks (0212, 2212, 0270) to:
0110
0213
0214
0215
0216
0219
0220
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250

5 business days

117

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Buffalo
Depositary banks (0220, 2220, 0223, 2223) to:
0210
0212

0260
0270

0280
2212

4 business days
2260

Depositary banks (0220,2220, 0223, 2223) to:
0110
0213
0214
0215
0216
0219
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

118

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250
2110

2213
2214
2215
2216
2219
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730
2740

5 business days
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Appendix B-l

Regulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Utica
4 business days

Depositary banks (0213, 2213) to:
0210
0212

0260
0270

0280
2212

2260

2214
2215
2216
2219
2220
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730
2740

2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

5 business days

Depositary banks (0213, 2213) to:
0110
0214
0215
0216
0219
0220
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250
2110

Philadelphia
5 business days

Depositary banks (0310, 2310, 0360, 2360) to:
0110
0210
0220
0260
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630

0640
0650
0660
0710
0720
0730
0740
0750
0810
0830
0840
0910
0960
1010
1020
1040

2110
2220
2260
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640

2650
2660
2710
2720
2730
2740
2750
2810
2830
2840
2910
2960
3010
3020
3040

119

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Cleveland
Depositary banks (0410, 2410) to:
0110
0210
0220
0260
0280
0310
0360
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720
0730

0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250
2110

5 business days
2220
2260
2310
2360
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730
2740
2750
2810

2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

2110
2220
2260
2310
2360
2410
2430
2440
2441
2442
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730
2740

2749
2750
2810
2813
2830
2839
2840
2863
2910
2960
3010
3020
3030
3040
3110
3130
3140
3210
3220
3223
3230
3240
3250

Cincinnati
Depositary banks (0420, 2420) to:
0110
0210
0220
0260
0280
0310
0360
0410
0430
0440
0441
0442
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

120

0730
0740
0749
0750
0810
0813
0830
0839
0840
0863
0910
0960
1010
1020
1030
1040
1110
1130
1140
1210
1220
1223
1230
1240
1250

5 business days

Appendix B -l

Regulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Columbus
Depositary banks (0440, 2440) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Pittsburgh
Depositary banks (0430, 2430) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2440
2510
2519
2520
2530
2539
2620
2610
2630
2640
2650
2660
2710
2720
2730

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

121

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Richmond
Depositary banks (0510, 2510) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0515
0519
0520
0521
0522
0530
0531
0539
0550
0560
0570
0610

0620
0630
0640
0650
0660
0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0960
1010
1020
1030
1040
1110
1120
1130

5 business days
1140
2110
2220
2260
2310
2360
2410
2420
2430
2440
2515
2519
2520
2521
2522
2530
2531
2539
2550
2560
2570
2610
2620

2630
2640
2650
2660
2710
2720
2730
2740
2750
2810
2820
2830
2840
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140

2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2530
2539
2610
2620
2630
2640
2650

2660
2710
2720
2730
2740
2750
2810
2830
2840
2910
2960
3010
3020
3040
3240

Baltimore
Depositary banks (0520, 2520) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0530
0539
0610
0620
0630

122

0640
0650
0660
0710
0720
0730
0740
0750
0810
0830
0840
0910
0960
1010
1020
1040
1240

5 business days

Regulation CC

Appendix B -l
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Charlotte
Depositary banks (0530, 2530) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0520
0539
0610
0620
0630
0640
0650

0660
0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0960
1010
1020
1030
1040
1110
1120
1130

5 business days
1140
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2520
2539
2610
2620
2630
2640
2650
2660

2710
2720
2730
2740
2750
2810
2820
2830
2840
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140

Columbia
Depositary banks (0539, 2539) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0610
0620
0630
0640
0650

0660
0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0960
1010
1020
1030
1040
1110
1120
1130
1140

5 business days
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2610
2620
2630
2640
2650
2660
2710

2720
2730
2740
2750
2810
2820
2830
2840
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140

123

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Charleston
Depositary banks (0519, 2519) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0520
0530
0539
0610
0620

0630
0640
0650
0660
0710
0720
0730
0740
0750
0810
0830
0840
0910
0960
1010
1020
1040

5 business days
1240
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2520
2530
2539
2610
2620
2630

2640
2650
2660
2710
2720
2730
2740
2750
2810
2830
2840
2910
2960
3010
3020
3040
3240

2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2620
2630
2640
2650
2660
2710
2720
2730

2740
2750
2810
2820
2830
2840
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3240

Atlanta
Depositary banks (0610, 2610) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0620
0630
0640
0650
0660
0710

124

0720
0730
0740
0750
0810
0820
0830
0840
0910
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1240

5 business days

Appendix B - l

Regulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Birmingham
Depositary banks (0620, 2620) to:
0651

4 business days

2651

Depositary banks (0620, 2620) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0630
0640
0650
0660
0710
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2630
2640
2650
2660
2710
2720
2730

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Jacksonville
Depositary banks (0630, 2630) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0640
0650

0660
0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130

5 business days
1140
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2640
2650
2660

2710
2720
2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140

125

Regulation CC

Appendix B-l

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office
M ia m i

Depositary banks (0660, 2660) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0610
0620
0630
0640
0650

0710
0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140

5 business days
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2610
2620
2630
2640
2650
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140

4 business days

N ashville

0613

2613
5 business days

Depositary banks (0640, 2640) to:
0530
0539
0610
0620

126

0630
0650
0660
0840

2530
2539
2610
2620

2630
2650
2660
2840

Appendix B-l

Regulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

New Orleans
Depositary banks (0650, 2650) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0710
0720
0730

0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240
1250

5 business days
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2710
2720
2730
2740
2750

2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2720
2730

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3223
3230
3240
3250

Chicago
Depositary banks (0710, 2710) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0720

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days

127

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Detroit
Depositary banks (0720, 2720) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2730

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Des Moines
Depositary banks (0730, 2730) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

128

0720
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Regulation CC

Appendix B-l
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Indianapolis
Depositary banks (0740, 2740) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720
2730

2740
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Milwaukee
Depositary banks (0750, 2750) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1240
1250

5 business days

129

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

St. Louis
Depositary banks (0810, 2810) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650

0660
0710
0720
0730
0740
0750
0820
0830
0840
0910
0960
1010
1020
1030
1040
1110
1120
1130
1140
1220
1223

5 business days
1240
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660

2710
2720
2730
2740
2750
2820
2830
2840
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140
3220
3223
3240

Little Rock
Depositary banks (0820, 2820) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

130

0720
0730
0740
0750
0810
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Regulation CC

Appendix B -l
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Louisville
Depositary banks (0830, 2830) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610

0620
0630
0640
0650
0660
0710
0720
0730
0740
0750
0810
0840
0910
0960
1010
1020
1040

5 business days
1240
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620

2630
2640
2650
2660
2710
2720
2730
2740
2750
2810
2840
2910
2960
3010
3020
3040
3240

Memphis
Depositary banks (0840, 2840)
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640

0650
0660
0710
0720
0730
0740
0750
0810
0820
0910
0960
1010
1020
1030
1040
1110
1120
1130
1140
1240

5 business days
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660

2710
2720
2730
2740
2750
2810
2820
2910
2960
3010
3020
3030
3040
3110
3120
3130
3140
3240

131

A ppendix B - l

R egulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Minneapolis
Depositary banks (0910, 2910, 0960, 2960) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0520
0530
0539
0610
0620
0630
0640

0650
0660
0710
0720
0730
0740
0750
0810
0820
0830
0840
1010
1020
1030
1040
1110
1120
1130
1140

1240
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2520
2530
2539
2610
2620
2630
2640
2650

5 business days
2660
2710
2720
2730
2740
2750
2810
2820
2830
2840
3010
3020
3030
3040
3110
3120
3130
3140
3240

Helena
None

Kansas City
0865

4 business days
2865

Depositary banks (1010, 3010) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

132

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1020
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3020
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

business days

Appendix B -l

Regulation CC

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Denver
Depositary banks (1020, 3020) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1030
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3030
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Oklahoma City
Depositary banks (1030, 3030) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1040
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3040
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

133

Appendix 38-1

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Omaha
Depositary banks (1040, 3040) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1110
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3110
3120
3130
3140
3210
3220
3223
3230
3240
3250

Dallas
Depositary banks (1110, 3110) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

134

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1120
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3120
3130
3140
3210
3220
3223
3230
3240
3250

Regulation CC

Appendix B -l
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

Houston
Depositary banks (1130, 3130) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3140
3210
3220
3223
3230
3240
3250

1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3120
3130
3210
3220
3223
3230
3240
3250

San Antonio
Depositary banks (1140, 3140) to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1120
1130
1210
1220
1223
1230
1240

5 business days

135

Appendix B -l

Regulation CC
Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

El Paso
Depositary banks (1120, 3120). to:
0110
0210
0220
0260
0280
0310
0360
0410
0420
0430
0440
0510
0519
0520
0530
0539
0610
0620
0630
0640
0650
0660
0710

0720
0730
0740
0750
0810
0820
0830
0840
0910
0920
0960
1010
1020
1030
1040
1110
1130
1140
1210
1220
1223
1230
1240

5 business days
1250
2110
2220
2260
2310
2360
2410
2420
2430
2440
2510
2519
2520
2530
2539
2610
2620
2630
2640
2650
2660
2710
2720

2730
2740
2750
2810
2820
2830
2840
2910
2920
2960
3010
3020
3030
3040
3110
3130
3140
3210
3220
3223
3230
3240
3250

San Francisco
Depositary banks (1210, 3210) to:
1220

1223

5 business days
3220

3223

Los Angeles
Depositary banks (1220, 1223, 3220, 3223) to:
1210

5 business days

3210

Portland
Depositary banks (1230, 3220) to:
1250

5 business days

3250

Salt Lake City
None

Seattle
Depositary banks (1250, 3250) to:
1230

136

3230

5 business days

Regulation CC

Appendix B-2

A PPEN D IX B-2—Reduction of
Schedules for Certain Nonlocal Checks
Under the Permanent Schedule
A depositary bank that is located in the fol
lowing check-processing territories shall make

Number o f business days
following the banking day
funds are deposited

Federal Reserve Office

New York
3 business days

Depositary banks (0210, 0260, 0280, 2260) to:
0214

0219

2214

2219

3 business days

Jericho
0210

0260

2260

3 business days

Cranford
0210

0260

0280

Nashville
0613

3 business days
2613

3 business days

Kansas City
0865

2260

3 business days

Utica
0210

0280

2865

137

Appendix C

APPENDIX C—Model Forms, Clauses
and Notices
This appendix contains model disclosure
forms, clauses, and notices to facilitate com
pliance with the disclosure requirements of
the regulation. Although use of these forms,
clauses, and notices is not required, banks us
ing them properly to make disclosures re
quired by the regulation are deemed to be in
compliance.
Model Specific Policy-Disclosure Forms
C—1
Next-day availability
C-2
Next-day availability and section
229.13 exceptions
C-3
Next-day availability, case-by-case
holds to statutory limits, and section
229.13
exceptions
(temporary
schedule)
C-4
Holds to statutory limits on all de
posits (temporary schedule)
C-5
Holds to statutory limits on all de
posits (temporary schedule, includes
chart)
C- 6
Holds on all deposits, but for less
time than the statutory limits, and
case-by-case holds to the statutory
limits (temporary schedule)
C-7
Holds to statutory limits on all de
posits (permanent schedule)
Model Clauses
C- 8
Holds on other funds (check
cashing)
C- 8 A Holds on other funds (other
account)
C-9
Appendix B availability (nonlocal
checks)
C-10
Automated teller machine deposits
(temporary schedule, extended hold)
C -l 1
Cash-withdrawal limitation (tempo
rary schedule)
C-11A Cash-withdrawal limitation (tempo
rary
schedule,
clearinghouse
member)
C -l IB Cash-withdrawal limitation (perma
nent schedule)
C -l2
Credit union interest-payment policy
Model Notices
C -l 3
Exception hold notice
C -l 3A Reasonable-cause hold notice
C -l4
Case-by-case hold notice
138

Regulation CC

C -l 5

Notice at locations where employees
accept consumer deposits
C -l 5A Notice at locations where employees
accept consumer deposits (case-bycase holds)
C -l 6
Notice at automated teller machines
C -l7
Notice at automated teller machines
(delayed receipt)
C -l 8
Deposit-slip notice
C -l9 Payable-through checks
C -l9A Payable-through checks

C -l—Next-Day Availability
YOUR ABILITY TO WITHDRAW
FUNDS
at [bank name and location]
Our policy is to make funds from your depos
its available to you on the first business day
after the day we receive your deposit. At that
time, you can withdraw the funds in cash and
we will use the funds to pay checks that you
have written.
For determining the availability of your de
posits, every day is a business day, except Sat
urdays, Sundays, and federal holidays. If you
make a deposit before [time of day] on a busi
ness day that we are open, we will consider
that day to be the day of your deposit. Howev
er, if you make a deposit after [time of day]
or on a day we are not open, we will consider
that the deposit was made on the next busi
ness day we are open.

C-2—Next-Day Availability and Section
229.13 Exceptions
YOUR ABILITY TO WITHDRAW
FUNDS
at [bank name and location]
Our policy is to make funds from your depos
its available to you on the first business day
after the day we receive your deposit. At that
time, you can withdraw the funds in cash and
we will use the funds to pay checks that you
have written.
For determining the availability of your de
posits, every day is a business day, except Sat
urdays, Sundays, and federal holidays. If you
make a deposit before [time of day] on a busi
ness day that we are open, we will consider
that day to be the day of your deposit. Howev

Appendix C

Regulation CC

er, if you make a deposit after [time o f day]
or on a day we are not open, we will consider
that the deposit was made on the next busi
ness day we are open.
Longer Delays May Apply
Funds you deposit by check may be delayed
for a longer period under the following
circumstances:
» We believe a check you deposit will not be
paid.
° You deposit checks totaling more than
$5,000 on any one day.
• You redeposit a check that has been re
turned unpaid.
° You have overdrawn your account repeat
edly in the last six months.
° There is an emergency, such as failure of
communications or computer equipment.
We will notify you if we delay your ability
to withdraw funds for any of these reasons,
and we will tell you when the funds will be
available. They will generally be available no
later than the [number] business day after the
day of your deposit.
Special Rules for New Accounts
If you are a new customer, the following spe
cial rules will apply during the first 30 days
your account is open.
The first $5,000 from a deposit of U.S.
Treasury checks will be available on the first
business day after the day of your deposit.
The excess over $5,000 will be available on the
ninth business day after the day of your de
posit. Funds from wire transfers into your ac
count will be available on the first business
day after the day we receive the transfer.
Funds from deposits of cash and the first
$5,000 of a day’s total deposits of cashier’s,
certified, teller’s, traveler’s, and state and local
government checks will be available on the
first business day after the day of your deposit
if the deposit meets certain conditions. For ex
ample, the checks must be payable to you
(and you may have to use a special deposit
slip). The excess over $5,000 will be available
on the ninth business day after the day of your
deposit. If you do not make the deposit in per
son to one of our employees, the first $5,000

will not be available until the second business
day after the day of your deposit.
Funds from all other check deposits will be
available on the [number] business day after
the day of your deposit.

C-3—Next-Day Availability, Case-byCase Holds to Statutory Limits, and
Section 229.13 Exceptions (Temporary
Schedule)
YOUR ABILITY TO WITHDRAW
FUNDS
at [bank name and location]
Our policy is to make funds from your depos
its available to you on the first business day
after the day we receive your deposit. At that
time, you can withdraw the funds in cash and
we will use the funds to pay checks that you
have written.
For determining the availability of your de
posits, every day is a business day, except Sat
urdays, Sundays, and federal holidays. If you
make a deposit before [time of day] on a busi
ness day that we are open, we will consider
that day to be the day of your deposit. Howev
er, if you make a deposit after [time of day]
or on a day we are not open, we will consider
that the deposit was made on the next busi
ness day we are open.
Longer Delays May Apply
In some cases, we will not make all of the
funds that you deposit by check available to
you on the first business day after the day of
your deposit. Depending on the type of check
that you deposit, funds may not be available
until the seventh business day after the day of
your deposit. However, the first $100 of your
deposits will be available on the first business
day.
If we are not going to make all of the funds
from your deposit available on the first busi
ness day, we will notify you at the time you
make your deposit. We will also tell you when
the funds will be available. If your deposit is
not made directly to one of our employees, or
if we decide to take this action after you have
left the premises, we will mail you the notice
by the day after we receive your deposit.
139

Appendix C

If you will need the funds from a deposit
right away, you should ask us when the funds
will be available.
In addition, funds you deposit by check
may be delayed for a longer period under the
following circumstances:
° We believe a check you deposit will not be
paid.
® You deposit checks totaling more than
$5,000 on any one day.
° You redeposit a check that has been re
turned unpaid.
° You have overdrawn your account repeat
edly in the last six months.
« There is an emergency, such as failure of
communications or computer equipment.

Regulation CC

available on the [number] business day after
the day of your deposit.

C -4 — H o ld s to S ta tu to r y L im its o n A ll
D e p o s its ( T e m p o r a r y S c h e d u le )

YOUR ABILITY TO WITHDRAW
FUNDS
at [bank name and location)
Our policy is to delay the availability of funds
that you deposit in your account. During the
delay, you may not withdraw the funds in
cash and we will not use the funds to pay
checks that you have written.
Determining the Availability of a Deposit

We will notify you if we delay your ability
to withdraw funds for any of these reasons,
and we will tell you when the funds will be
available. They will generally be available no
later than the [number] business day after the
day of your deposit.
Special Rules for New Accounts
If you are a new customer, the following spe
cial rules will apply during the first 30 days
your account is open.
The first $5,000 from a deposit of U.S.
Treasury checks will be available on the first
business day after the day of your deposit.
The excess over $5,000 will be available on the
ninth business day after the day of your de
posit. Funds from wire transfers into your ac
count will be available on the first business
day after the day we receive the transfer.
Funds from deposits of cash and the first
$5,000 of a day’s total deposits of cashier’s,
certified, teller’s, traveler’s, and state and local
government checks will be available on the
first business day after the day of your deposit
if the deposit meets certain conditions. For ex
ample, the checks must be payable to you
(and you may have to use a special deposit
slip). The excess over $5,000 will be available
on the ninth business day after the day of your
deposit. If you do not make the deposit in per
son to one of our employees, the first $5,000
will not be available until the second business
day after the day of your deposit.
Funds from all other check deposits will be
140

The length of the delay is counted in business
days from the day of your deposit. Every day
is a business day except Saturdays, Sundays,
and federal holidays. If you make a deposit
before [time o f day] on a business day that we
are open, we will consider that day to be the
day of your deposit. However, if you make a
deposit after [time of day] or on a day we are
not open, we will consider that the deposit
was made on the next business day we are
open.
The length of the delay varies depending on
the type of deposit and is explained below.
Next-Day Availability
Funds from the following deposits are avail
able on the first business day after the day of
your deposit:
• U.S. Treasury checks that are payable to
you.
° Wire transfers, including preauthorized
credits, such as social security benefits and
payroll payments.
° Checks drawn on [bank name] (unless
[any limitations related to branches in dif
ferent states or check-processing regions]).
If you make the deposit in person to one of
our employees, funds from the following de
posits are also available on the first business
day after the day of your deposit:
- Cash.
° State and local government checks that are

Appendix C

Regulation CC

payable to you (if you use a special deposit
slip available from [ where deposit slip may
be obtained]).
° Cashier’s, certified, and teller’s checks that
are payable to you {if you use a special
deposit slip available from [where deposit
slip may be obtained]).
« Federal Reserve Bank checks, Federal
Home Loan Bank checks, and postal mon
ey orders, if these items are payable to
you.
If you do not make your deposit in person to
one of our employees (for example, if you
mail the deposit), funds from these deposits
will be available on the second business day
after the day of your deposit.
Other Check Deposits
The delay for other check deposits depends on
whether the check is a local or a nonlocal
check. To see whether a check is a local or a
nonlocal check, look at the routing number on
the check:

of local checks will be available on the first
business day after the day of your deposit.
The remaining funds will be available on the
third business day after the day of your
deposit.
For example, if you deposit a local check of
$700 on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on Thursday.
2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit. The remaining funds will be available
on the seventh business day after the day of
your deposit.
For example, if you deposit a $700 nonlocal
check on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on Wednesday of the following
week. If you deposit both categories of checks,
$100 from the checks will be available on the
first business day after the day of your deposit,
not $100 from each category of check.

Personal Check
Longer Delays May Apply
19
Pay to the

Funds you deposit by check may be delayed
for a longer period under the following
circumstances:

(Bank Name
and Location)
1 123456789 1

0000000000 000
.Routing number

Business Check
Name of Company
Address, City, State

Pay to the

(Bank Name
and Location)
000000000

1 123456789 1

oooooooooo 000
.Routing number

° We believe a check you deposit will not be
paid.
° You deposit checks totaling more than
$5,000 on any one day.
° You redeposit a check that has been re
turned unpaid.
° You have overdrawn your account repeat
edly in the last six months.
° There is an emergency, such as failure of
communications or computer equipment.
We will notify you if we delay your ability
to withdraw funds for any of these reasons,
and we will tell you when the funds will be
available. They will generally be available no
later than the [number] business day after the
day of your deposit.

Special Rules for New Accounts
If you are a new customer, the following spe141

Appendix C

cial rules will apply during the first 30 days
your account is open.
The first $5,000 from a deposit of U.S.
Treasury checks will be available on the first
business day after the day of your deposit.
The excess over $5,000 will be available on the
ninth business day after the day of your de
posit. Funds from wire transfers into your ac
count will be available on the first business
day after the day we receive the transfer.
Funds from deposits of cash and the first
$5,000 of a day’s total deposits of cashier’s,
certified, teller’s, traveler’s, and state and local
government checks will be available on the
first business day after the day of your deposit
if the deposit meets certain conditions. For ex
ample, the checks must be payable to you
(and you may have to use a special deposit
slip). The excess over $5,000 will be available
on the ninth business day after the day of your
deposit. If you do not make the deposit in per
son to one of our employees, the first $5,000
will not be available until the second business
day after the day of your deposit.
Funds from all other check deposits will be
available on the [number] business day after
the day of your deposit.

C - 5 — H o ld s to S ta tu to ry L im its o n A ll
D e p o s its ( T e m p o r a r y S c h e d u le , I n c lu d e s
C h a rt)

Regulation CC

day of your deposit. However, if you make a
deposit after [time of day] or on a day we are
not open, we will consider that the deposit
was made on the next business day we are
open.
The length of the delay varies depending on
the type of deposit and is explained below.

Next-Day Availability
Funds from the following deposits are avail
able on the first business day after the day of
your deposit:
® U.S. Treasury checks that are payable to
you.
« Wire transfers, including preauthorized
credits, such as Social Security benefits
and payroll payments.
® Checks drawn on [bank name] (unless
[any limitations related to branches in dif
ferent states or check-processing regions]).
If you make the deposit in person to one of
our employees, funds from the following de
posits are also available on the first business
day after the day of your deposit:
® Cash.
* State and local government checks that are
payable to you (if you use a special deposit
slip available from [where deposit slip may
be obtained]).
® Cashier’s, certified, and teller’s checks that
are payable to you (if you use a special
deposit slip available from [where deposit
slip may be obtained] ).
® Federal Reserve Bank checks, Federal
Home Loan Bank checks, and postal mon
ey orders, if these items are payable to
you.
If you do not make your deposit in person to
one of our employees (for example, if you
mail the deposit), funds from these deposits
will be available on the second business day
after the day of your deposit.

Other Check Deposits
To find out when funds from other check de
posits will be available, look at the first four
digits of the routing number on the check:

Regulation CC

Appendix C

Personal Check

• We believe a check you deposit will not be
paid.
° You deposit checks totaling more than
$5,000 on any one day.
® You redeposit a check that has been re
turned unpaid.
° You have overdrawn your account repeat
edly in the last six months.
° There is an emergency, such as failure of
communications or computer equipment.

__________ 19_____
Pay to thr
order o f ______________________________
$ _______
__________________________________________ dollars
(Bank Name and
Location)
| 123456789 |

0000000000 000
.Routing number

Business Check
Name of Company
Address, City, State
19
Pay to the

(Bank Name and
Location)
000000000

| 123456789 |

0000000000 000
.Routing number

Once you have determined the first four
digits of the routing number (1234 in the ex
amples above), the chart below will show you
when the funds from the check will be avail
able. If you deposit both categories of checks,
$100 from the checks will be available on the
first business day after the day of your deposit,
not $100 from each category of check.
Longer Delays May Apply
Funds you deposit by check may be delayed
for a longer period under the following
circumstances:

First four digits
from routing number
[local numbers]

A ll other numbers

Special Rules for New Accounts
If you are a new customer, the following spe
cial rules will apply during the first 30 days
your account is open.
The first $5,000 from a deposit of U.S.
Treasury checks will be available on the first
business day after the day of your deposit.
The excess over $5,000 will be available on the
ninth business day after the day of your de
posit. Funds from wire transfers into your ac
count will be available on the first business
day after the day we receive the transfer.
Funds from deposits of cash and the first
$5,000 of a day’s total deposits of cashier’s,
certified, teller’s, traveler’s, and state and local
government checks will be available on the

When funds are available

When funds are
available i f a
deposit is made
on a Monday

$100 on the first business day after the day o f your
deposit.

Tuesday

Remaining funds on the third business day after
the day o f your deposit.

Thursday

$100 on the first business day after the day o f your
deposit.

Tuesday

Remaining funds on the seventh business day
after the day o f your deposit.

Wednesday o f the
following week

143

Appendix C

first business day after the day of your deposit
if the deposit meets certain conditions. For ex
ample, the checks must be payable to you
(and you may have to use a special deposit
slip). The excess over $5,000 will be availableon the ninth business day after the day of
your deposit. If you do not make the deposit
in person to one of our employees, the first
$5,000 will not be available until the second
business day after the day of your deposit.
Funds from all other check deposits will be
available on the [number] business day after
the day of your deposit.

C - 6 — H o ld s o n A ll D e p o s its , b u t fo r
L e ss T im e T h a n th e S ta tu to r y L im its,
a n d C a se -b y -C a se H o ld s to th e S ta tu to r y
L im its ( T e m p o r a r y S c h e d u le )

Determining the Availability of a Deposit
The length of the delay is counted in business
days from the day of your deposit. Every day
is a business day except Saturdays, Sundays,
and federal holidays. If you make a deposit
before [time of day] on a business day that we
are open, we will consider that day to be the
day of your deposit. However, if you make a
deposit after [time of day] or on a day we are
not open, we will consider that the deposit
was made on the next business day we are
open.
The length of the delay varies depending on
the type of deposit and is explained below.

Regulation CC

able on the first business day after the day of
your deposit:
° U.S. Treasury checks that are payable to
you.
° Wire transfers, including preauthorized
credits, such as Social Security benefits
and payroll payments.
» Checks drawn on [bank name] (unless
[any limitations related to branches in dif
ferent states or check-processing regions]).
If you make the deposit in person to one of
our employees, funds from the following de
posits are also available on the first business
day after the day of your deposit:
» Cash.
8 State and local government checks that are
payable to you (if you use a special deposit
slip available from [where deposit slip may
be obtained]).
° Cashier’s, certified, and teller’s checks that
are payable to you (if you use a special
deposit slip available from [where deposit
slip may be obtained] ).
8 Federal Reserve Bank checks, Federal
Home Loan Bank checks, and postal money
orders, if these items are payable to you.
If you do not make your deposit in person to
one of our employees (for example, if you
mail the deposit), funds from these deposits
will be available on the second business day
after the day of your deposit.

Other Check Deposits
The delay for other check deposits depends on
whether the check is a local or a nonlocal
check. To see whether a check is a local or a
nonlocal check, look at the routing number on
the check:
Personal Check
19
Pay to the
$
(Bank Name and
Location)

Next-Day Availability
Funds from the following deposits are avail144

| 123456789 \

0000000000 000
.Routing number

Regulation CC

Appendix C

Business Check

If we are not going to make all funds from
your deposit available at the times shown
above, we will notify you at the time you
make your deposit. We will also tell you when
the funds will be available. If your deposit is
not made directly to a bank employee, or if we
decide to take this action after you have left
the premises, we will mail you the notice by
the day after we receive your deposit.
If you will need the funds from a deposit
right away, you should ask us when the funds
will be available.
In addition, funds you deposit by check
may be delayed for a longer period under the
following circumstances:
° We believe a check you deposit will not be
paid.
° You deposit checks totaling more than
$5,000 on any one day.
° You redeposit a check that has been re
turned unpaid.
° You have overdrawn your account repeat
edly in the last six months.
° There is an emergency, such as failure of
communications or computer equipment.

Name of Company
Address, City, State
19____
Pay to the

(Bank Name and
Location)
000000000

| 123456789 [

0000000000 000
.Routing number

If the first four digits of the routing number
(1234 in the examples above) are [local num
bers], then the check is a local check.
Otherwise, the check is a nonlocal check. Our
policy is to make funds from these checks
available as follows.
1. Local checks. The first $100 from a deposit
of local checks will be available on the first
business day after the day of your deposit.
The remaining funds will be available on the
[number] business day after the day of your
deposit.
For example, if you deposit a local check of
$700 on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on [day].
2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit. The remaining funds will be available
on the [number] business day after the day of
your deposit.
For example, if you deposit a $700 nonlocal
check on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on [day].
If you deposit both categories of checks,
$100 from the checks will be available on the

first business day after the day of your deposit,
not $100 from each category of check.
Longer Delays May Apply
In some cases, we will not make all of the
funds that you deposit by check available at
the times shown above. Depending on the
type of check that you deposit, funds may not
be available until the seventh business day af
ter the day of your deposit. However, the first
$100 of your deposits will be available on the
first business day after the day of your deposit.

Appendix C

(and you may have to use a special deposit
slip). The excess over $5,000 will be available
on the ninth business day after the day of your
deposit. If you do not make the deposit in per
son to one of our employees, the first $5,000
will not be available until the second business
day after the day of your deposit.
Funds from all other check deposits will be
available on the [number] business day after
the day of your deposit.

C - 7 — H o ld s to S ta tu to ry L im its o n A ll
D e p o s its ( P e r m a n e n t S c h e d u le )

YOUR ABILITY TO WITHDRAW
FUNDS
at [bank name and location]
Our policy is to delay the availability of funds
that you deposit in your account. During the
delay, you may not withdraw the funds in
cash and we will not use the funds to pay
checks that you have written.
Determining the Availability of a Deposit
The length of the delay is counted in business
days from the day of your deposit. Every day
is a business day except Saturdays, Sundays,
and federal holidays. If you make a deposit
before [time of day] on a business day that we
are open, we will consider that day to be the
day of your deposit. However, if you make a
deposit after [time of day] or on a day we are
not open, we will consider that the deposit
was made on the next business day we are
open.
The length of the delay varies depending on
the type of deposit and is explained below.
Funds from the following deposits are avail
able on the first business day after the day of
your deposit:
° U.S. Treasury checks that are payable to
you.
° Wire transfers, including preauthorized
credits, such as Social Security benefits
and payroll payments.
° Checks drawn on [bank name] (unless
[any limitations related to branches in dif
ferent states or check-processing regions]).
If you make the deposit in person to one of
our employees, funds from the following de146

Regulation CC

posits are also available on the first business
day after the day of your deposit:
° Cash.
° State and local government checks that are
payable to you (if you use a special deposit
slip available from [where deposit slip may
be obtained] ).
° Cashier’s, certified, and teller’s checks that
are payable to you (if you use a special
deposit slip available from [where deposit
slip may be obtained]).
° Federal Reserve Bank checks, Federal
Home Loan Bank checks, and postal mon
ey orders, if these items are payable to
you.
If you do not make your deposit in person to
one of our employees (for example, if you
mail the deposit), funds from these deposits
will be available on the second business day
after the day of your deposit.
Other Check Deposits
The delay for other check deposits depends on
whether the check is a local or a nonlocal
check. To see whether a check is a local or a
nonlocal check, look at the routing number on
the check:
Personal Check
19
Pay to the

(Bank Name and
Location)
1 123456789 1

0000000000 000
.Routing number

Business Check
Name of Company
Address, City, State
19____
Pay to the

(Bank Name and
Location)
000000000

| 123456789 1

0000000000 000
-Routing number

If the first four digits of the routing number
(1234 in the examples above) are [local num
bers], then the check is a local check.

Regulation CC

Otherwise, the check is a nonlocal check. Our
policy is to make funds from these checks
available as follows.
1. Local checks. The first $100 from a deposit
of local checks will be available on the first
business day after the day of your deposit.
The remaining funds will be available on the
second business day after the day of your
deposit.
For example, if you deposit a local check of
$700 on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on Wednesday.
2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit. The remaining funds will be available
on the fifth business day after the day of your
deposit.
For example, if you deposit a $700 nonlocal
check on a Monday, $100 of the deposit is
available on Tuesday. The remaining $600 is
available on Monday of the following week. If
you deposit both categories of checks, $100
from the checks will be available on the first
business day after the day of your deposit, not
$100 from each category of check.

Appendix C

Longer Delays May Apply
Funds you deposit by check may be delayed
for a longer period under the following
circumstances:
° We believe a check you deposit will not be
paid.
° You deposit checks totaling more than
$5,000 on any one day.
° You redeposit a check that has been re
turned unpaid.
» You have overdrawn your account repeat
edly in the last six months.
• There is an emergency, such as failure of
communications or computer equipment.
We will notify you if we delay your ability
to withdraw funds for any of these reasons,
and we will tell you when the funds will be
available. They will generally be available no
later than the [number] business day after the
day of your deposit.
Special Rules for New Accounts
If you are a new customer, the following spe

C - 8 — H o ld s o n O th e r F u n d s ( C h e c k
C a s h in g )

If we cash a check for you that is drawn on
another bank, we may withhold the availabil
ity of a corresponding amount of funds that
are already in your account. Those funds will
be available at the time funds from the check
we cashed would have been available if you
had deposited it. For example, if we cash a
$100 local check for you, $100 of funds
already in your account will not be available
until the [number] business day after the day
we cashed the check.

C - 8 A — H o ld s o n O th e r F u n d s ( O t h e r
A c c o u n t)

If we accept for deposit a check that is drawn
on another bank, we may make funds from
the deposit available for withdrawal immedi
ately but delay your availability to withdraw a
corresponding amount of funds that you have
147

Appendix C

Regulation CC

it to pay checks you have written to others.
The first $100 will also be available for
withdrawal in cash on the first business day
after the day of your deposit. An additional
$400 of the deposit may be withdrawn in cash
at or after [time no later than 5:00 p.m.] on
the third business day after the day of your
deposit. All of the remaining funds will be
C - 9 — A p p e n d ix B A v a ila b ility
available for cash withdrawal on the fourth
( N o n lo c a l C h e c k s )
business day after the day of your deposit.
3. Certain other checks. We can process non
For example, if you deposit a local check of
local checks drawn on financial institutions in $700 on a Monday, $100 of the deposit is
certain areas faster than usual. Therefore, available on Tuesday to pay checks to others
funds from deposits of checks drawn on insti and to withdraw in cash. The rest is available
tutions in those areas will be available to you to pay checks on Thursday. At or after [time
more quickly. Call us if you would like a list no later than 5:00p.m. ] on Thursday you may
of the routing numbers for these institutions.
withdraw another $400 of the deposit in cash,
and you may withdraw the rest in cash on
Friday.

on deposit in another account with us. The
funds in the other account would then not be
available for withdrawal until the time periods
that are described elsewhere in this disclosure
for the type of check that you deposited.

C - 1 0 — A u to m a te d T e lle r M a c h in e
D e p o s its ( T e m p o r a r y S c h e d u le ,
E x te n d e d H o ld )

DEPOSITS AT AUTOMATED
TELLER MACHINES
Funds from any deposits (cash or checks)
made at automated teller machines (ATMs)
we do not own or operate will not be available
until the seventh business day after the day of
your deposit. This rule does not apply at
ATMs that we own or operate.
[A list of our ATMs is enclosed.]
or
[A list of ATMs where you can make de
posits but that are not owned or operated by
us is enclosed.]
or
[All ATMs that we own or operate are
identified as our machines.]

C —11— C a s h - W ith d ra w a l L im ita tio n
( T e m p o r a r y S c h e d u le )

1. Local checks. The first $100 from a deposit
of local checks will be available on the first
business day after the day of your deposit to
pay checks you have written to others. All of
the remaining funds will be available on the
third business day after the day of your depos148

2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit for cash withdrawal and to pay checks
you have written to others. The remainder
will be available on the seventh business day
after the day of your deposit for both of these
purposes.
For example, if you deposit a nonlocal
check on a Monday, $100 of the deposit is
available on Tuesday to pay checks to others
and to withdraw in cash. The remaining funds
from the deposit are available on Wednesday
of the following week for cash withdrawal and
to pay checks written to others.

C - 1 1 A — C a s h - W ith d ra w a l L im ita tio n
( T e m p o r a r y S c h e d u le , C le a rin g h o u s e
M e m b er)

1. Local checks. The first $100 from a deposit
of local checks will be available on the first
business day after the day of your deposit for
cash withdrawal and to pay checks you have
written to others. The remainder generally
will be available on the third business day af
ter the day of your deposit for both of these
purposes.
For example, if you deposit a local check of
$700 on a Monday, $100 of the deposit is
available on Tuesday to pay checks to others
and to withdraw in cash. The remaining $600

Regulation CC

is available on Thursday for cash withdrawal
and to pay checks you have written to others.
In some cases, however, depending on the
bank on which the check is drawn, special
limitations apply to withdrawals in cash. The
first $100 will be available for cash withdrawal
on the first business day after the day of your
deposit. An additional $400 of the deposit
may be withdrawn in cash at or after [time no
later than 5:00 p.m. ] on the third business day
after the day of your deposit. All of the re
maining funds will be available for cash with
drawal on the fourth business day after the
day of your deposit.
In these cases, for example, if you deposit a
local check of $700 on a Monday, $100 of the
deposit is available on Tuesday to pay checks
to others and to withdraw in cash. The rest is
available to pay checks on Thursday. At or
after [time no later than 5:00p.m. ] on Thurs
day you may withdraw another $400 of the
deposit in cash, and you may withdraw the
rest in cash on Friday.
2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit for cash withdrawal and to pay checks
you have written to others. The remainder
will be available on the seventh business day
after the day of your deposit for both of these
purposes.
For example, if you deposit a nonlocal
check on a Monday, $100 of the deposit is
available on Tuesday to pay checks to others
and to withdraw in cash. The remaining funds
from the deposit are available on Wednesday
of the following week for cash withdrawal and
to pay checks written to others.

C - 1 1 B — C a s h - W ith d ra w a l L im ita tio n
( P e r m a n e n t S c h e d u le )

Appendix C

withdrawal in cash on the first business day
after the day of your deposit. An additional
$400 of the deposit may be withdrawn in cash
at or after [time no later than 5:00 p.m.~\ on
the second business day after the day of your
deposit. All of the remaining funds will be
available for cash withdrawal on the third
business day after the day of your deposit.
For example, if you deposit a local check of
$700 on a Monday, $100 of the deposit is
available on Tuesday to pay checks to others
and to withdraw in cash. The rest is available
to pay checks on Wednesday. At or after time
no later than 5:00 p.m.] on Wednesday you
may withdraw another $400 of the deposit in
cash, and you may withdraw the rest in cash
on Thursday.
2. Nonlocal checks. The first $100 from a de
posit of nonlocal checks will be available on
the first business day after the day of your
deposit to pay checks you have written to oth
ers. All of the remaining funds will be avail
able on the fifth business day after the day of
your deposit to pay checks you have written
to others.
The first $100 will also be available for
withdrawal in cash on the first business day
after the day of your deposit. An additional
$400 of the deposit may be withdrawn in cash
at or after [time no later than 5:00 p.m.] on
the fifth business day after the day of your
deposit. All of the remaining funds will be
available for cash withdrawal on the sixth
business day after the day of your deposit.
For example, if you deposit a nonlocal
check of $700 on a Monday, $100 of the de
posit is available on Tuesday to pay checks to
others and to withdraw in cash. The rest is
available to pay checks on Monday of the fol
lowing week. At or after [time no later than
5:00 p.m.] on that Monday, you may with
draw another $400 of the deposit in cash. The
rest may be withdrawn in cash on Tuesday of
that following week.

C - 12— C r e d it- U n io n I n te r e s t-P a y m e n t
P o lic y

INTEREST-PAYMENT POLICY
If we receive a deposit to your account on or
149

Appendix C

Regulation CC

before the tenth of the month, you begin earn
ing interest on the deposit (whether it was a
deposit of cash or checks) as of the first day of
that month. If we receive the deposit after the
tenth of the month, you begin earning interest
on the deposit as of the first of the following
month. For example, a deposit made on June
7 earns interest from June 1, while a deposit
made on June 17 earns interest from July 1.

C - 1 3 A — R e a s o n a b le -C a u s e H o ld N o tic e

NOTICE OF HOLD
Account number:
[number]

Date of deposit:
[date]

Amount of deposit:
[amount]
We are delaying the availability of the funds
you deposited by the following check:

C - 1 3 — E x c e p tio n H o ld N o tic e

NOTICE OF HOLD
Account number:
[number]

Date of deposit:
[date]

[description of check, such as amount and
drawer]
These funds will be available on the [number]
business day after the day of your deposit.
The reason for the delay is explained below:
___

Amount of deposit:
[amount]
We are delaying the availability of
$[amount being held] from this deposit.
These funds will be available on the [number]
business day after the day of your deposit.
We are taking this action because:
___ A check you deposited was previously
returned unpaid.
___ You have overdrawn your account re
peatedly in the last six months.
___ The checks you deposited on this day
exceed $5,000.
___ An emergency, such as failure of com
munications or computer equipment,
has occurred.
___ We believe a check you deposited will
not be paid for the following reasons:

___

___
___
___

___
___
___
___
___
___

(If you did not receive this notice at the time
you made the deposit and the check you de
posited is paid, we will refund to you any fees
for overdrafts or returned checks that result
solely from the additional delay that we are
imposing. To obtain a refund of such fees,
[description of procedure for obtaining
refund].)
150

We received notice that the check is
being returned unpaid.
We have confidential information that
indicates that the check may not be
paid.
The check is drawn on an account with
repeated overdrafts.
We are unable to verify the indorse
ment of a joint payee.
Some information on the check is not
consistent with other information on
the check.
There are erasures or other apparent
alterations on the check.
The routing number of the paying
bank is not a current routing number.
The check is postdated or has a stale
date.
Information from the paying bank in
dicates that the check may not be paid.
We have been notified that the check
has been lost or damaged in collection.
Other:__________ ________________

(If you did not receive this notice at the
time you made the deposit and the check you
deposited is paid, we will refund to you any
fees for overdrafts or returned checks that re
sult solely from the additional delay that we
are imposing. To obtain a refund of such fees,
[description of procedure for obtaining
refund].)

Regulation CC

Appendix C

C -1 4 — C a se -b y -C a se H o ld N o tic e

NOTICE OF HOLD
Account number:
[number]

Date of deposit:
[date]

Amount of deposit:
[amount]
We are delaying the availability of
%[amount being held] from this deposit.
These funds will be available on the [number]
business day after the day of your deposit.
(If you did not receive this notice at the
time you made the deposit and the check you
deposited is paid, we will refund to you any
fees for overdrafts or returned checks that re
sult solely from the additional delay that we
are imposing. To obtain a refund of such fees,
[description o f procedure for obtaining
refund].)

C - 1 5 — N o tic e a t L o c a tio n s W h e re
E m p lo y e e s A c c e p t C o n s u m e r D e p o s its

FUNDS-AVAILABILITY POLICY
Description o f Deposit

When Funds Can Be
Withdrawn by Cash or
Check

Cash; wire transfers;
cashier’s, certified,
teller’s, or government
checks; checks on
[bank name] (unless

The first business day
after the day of deposit

[number] business day after the day we re
ceive your deposit. In some cases, we may de
lay your ability to withdraw funds beyond the
[number] business day. Then, the funds will
generally be available by the seventh business
day after the day of deposit.

C - 1 6 — N o tic e a t A u to m a te d T e lle r
M a c h in e s

AVAILABILITY OF DEPOSITS
Funds from deposits may not be available for
immediate withdrawal. Please refer to your
institution’s rules governing funds availability
for details.

C - 1 7 — N o tic e a t A u to m a te d T e lle r
M a c h in e s ( D e la y e d R e c e ip t)

NOTICE
Deposits at this ATM between [day] and
[day] will not be considered received until
[day]. The availability of funds from the de
posit may be delayed as a result.

C - 1 8 — D e p o s it-S lip N o tic e

Deposits may not be available for immediate
withdrawal.

[any limitation related
to branches in different
check-processing
regions]), and the first

$100 of a day’s
deposits of other
checks

M o d e l C - 1 9 — P a y a b le - T h ro u g h C h e c k s

Local checks

The third business day
after the day of deposit

Nonlocal checks

The seventh business
day after the day of
deposit

C - 1 5 A — N o tic e a t L o c a tio n s W h e re
E m p lo y e e s A c c e p t C o n s u m e r D e p o s its
(C a s e -b y -C a s e H o ld s )

FUNDS-AVAILABILITY POLICY
Our general policy is to allow you to with
draw funds deposited in your account on the

In some instances we will treat checks as local
or nonlocal based upon the location of the
bank by which the check is payable, not on
the routing number on the bottom of the
check. For example, if a credit-union share
draft is payable by a credit union that is locat
ed in the same check-processing region as our
bank, the share draft will be treated as a local
check, even if the draft is payable through a
bank that is located outside of our check-pro
cessing region as determined by the routing
number on the check. If you have any ques
tion about a specific check, please ask your
branch manager.
151

Appendix C
M o d e l C - 1 9 A — P a y a b le -T h ro u g h
C hecks

Checks that are payable by one bank but are
payable through another bank, such as creditunion share drafts that are payable through a
bank, are considered local or nonlocal based
upon the location of the bank by which the
check is payable, not the payable-through
bank whose routing number appears on the
check. If the bank by which the payablethrough check is payable (the credit union in
the case of a payable-through credit-union
share draft) is located in the same check-pro
cessing region as we are, the check will be
considered a local check. [(Our check-pro
cessing region includes.. .. ) or (A map of our
check-processing region is (attached) (avail
able upon request).)] If you would like to
know whether a particular check falls into
this category, you may ask your branch man
ager for assistance.

152

Regulation CC Commentary

Regulation CC Commentary
COM M ENTARY

Appendix C

the regulation only if its disclosures corre
spond to the bank’s availability policy.

A P P E N D IX C

Appendix C contains model forms and clauses
that may be used by banks to meet their dis
M o d e ls C —1 T h r o u g h C - 7 G e n e ra lly
closure responsibilities under the regulation.
Banks using the model forms and clauses These forms are models for the specific avail
properly will be in compliance with the disclo ability-policy disclosure described in section
229.16 of the regulation. The forms accommo
sure requirements of the regulation.
Certain information that must be inserted date a variety of availability policies, ranging
by a bank using the forms is within brackets from policies of next-day availability to holds
in the text of the forms. Some forms contain on a blanket basis up to the maximum time
alternative clauses, and these are set forth in allowed in the regulation. Models C-3 and
brackets and separated by the word “or.” C- 6 reflect the additional disclosures dis
Banks may make certain changes in the for cussed in section 229.16(b) and (c) for banks
mat or content of the model forms and delete that have a policy of extending availability
material that is inapplicable without losing times on a case-by-case basis.
the act’s protection from liability for banks
Except for model C-7, the forms reflect the
that use the forms properly. For example, if a temporary schedules that are in effect from
bank does not take advantage of the section September 1, 1988, through August 31, 1990.
229.13 exceptions, it may delete the material Model C-7 reflects availability under the per
relating to those exceptions. The rearrange manent schedule in section 229.12 effective
ment of the model forms may not be so exten September 1, 1990.
As already noted, there are several places in
sive, however, as to affect the substance, clari
ty, or meaningful sequence of the forms. Ac the forms where information must be inserted.
This information includes the bank’s name
ceptable changes include, for example:
and cut-off times, limitations relating to next» Using “customer” and “bank” instead of
day availability, and the first four digits of
pronouns.
routing numbers for local banks. In disclosing
• N ot using bold type for headings.
when funds will be available for withdrawal,
• Incorporating certain state-law plainthe bank must insert the ordinal number
English requirements.
(such as first, second, etc.) of the business day
Shorter time periods for availability may al the funds will become available.
Models C -l through C-7 generally do not
ways be substituted for time periods used in
reflect any optional provisions of the regula
the model forms.
Banks may also add information related to tion, or those that apply only to certain banks.
their availability policies. For example, a bank Instead, disclosures for these provisions are
might indicate that although funds have been included in the model clauses (models C- 8
made available to a customer and the custom through C -l2). A bank using one of the mod
er has withdrawn them, the customer is still el forms should also consider whether it must
responsible for problems with the deposit, incorporate one or more of the model clauses.
In addition, a bank that distinguishes in its
such as checks that were deposited being re
turned unpaid. Or a bank could provide in its disclosure between local and nonlocal checks
disclosure a telephone number to be used if a based on the routing number on the check (as
set forth in model forms C-4 through C-7)
customer has an inquiry regarding a deposit.
Banks are cautioned against using the must disclose that certain checks, such as
forms without reviewing their own policies credit-union share drafts that are payable
and practices, as well as state and federal laws through a bank, will be treated as local or
regarding the time periods for availability of nonlocal based upon the location of the payor
specific types of checks. A bank using a model bank and not on the basis of the routing num
form will be in compliance with the act and ber on the check. Model C -l9 or C -l9A
153

Appendix C

could be incorporated into model forms C-4
through C-7 to meet this requirement.
Model C-l
A bank may use this form when its policy is to
make funds from all deposits available on the
first business day after a deposit is made. This
form may also be used by banks that provide
immediate availability by substituting the
word “immediately” in place of “on the first
business day after the day we receive your
deposit.”
Model C-2
A bank may use this form when its policy is to
make funds from all deposits available to its
customers on the first business day after the
deposit is made, and to reserve the right to
invoke the new account and other exceptions
in section 229.13 of the regulation.
Model C-2
A bank may use this form when its policy, in
most cases, is to make funds from all types of
deposits available the day after the deposit is
made, but to delay availability on some depos
its on a case-by-case basis up to the maximum
time periods allowed under the regulation. A
bank using this form also reserves the right to
invoke the exceptions listed in section 229.13
of the regulation.
Model C-4
A bank may use this form when its policy is to
impose delays to the full extent allowed under
the temporary schedule in section 229.11 and
to reserve the right to invoke the section
229.13 exceptions.
Model C-5
A bank may use this form when its policy is
the same as that outlined in model C-4. The
only difference between model C-4 and model
C-5 is that in the latter a chart showing the
bank’s availability policy for local and nonlo
cal checks is substituted for the narrative de
scription in the former.
154

Regulation CC Commentary

Model C-6
A bank may use this form when its policy is to
delay availability based on the deposit catego
ries (next-day availability items and local and
nonlocal checks) in the regulation, but to
make funds available more quickly than is re
quired by the regulation. A bank using this
form would also reserve the right to place
holds on a case-by-case basis up to the statuto
ry limits and to invoke the section 229.13
exceptions.
Model C-7
A bank may use this form when its policy is to
impose delays to the full extent allowed by the
permanent schedule in section 229.12 and to
reserve the right to invoke the section 229.13
exceptions.

M o d e ls C - 8 T h r o u g h C - l 2 G e n e ra lly

These model clauses must be incorporated
into a bank’s specific availability-policy disclo
sure under certain circumstances. The com
mentary to each clause indicates when the
clause is required.
Model C-8
This clause must be incorporated in the spe
cific availability-policy disclosure by banks
that reserve the right to place a hold on funds
already on deposit when they cash a check for
the customer, as discussed under section
229.19(e).
Model C-8A
This clause must be incorporated in the spe
cific availability-policy disclosure by banks
that reserve the right to place a hold on funds
in an account of the customer other than the
account into which the deposit is made, as dis
cussed in section 229.19(e).
Model C-9
This clause must be incorporated in the spe
cific availability-policy disclosure by banks in
check-processing regions where the availabil
ity schedules for certain nonlocal checks have
been reduced, as described in appendix B of

Regulation CC Commentary

the regulation. Banks using model C-4, C - 6 ,
or C-7 may insert this clause at the conclu
sion of the discussion titled “Nonlocal
Checks.”
Model C-10
This clause must be incorporated in the spe
cific availability-policy disclosure by banks
that reserve the right to delay availability of
deposits at nonproprietary ATMs until the
seventh business day following the day of the
deposit, as permitted during the temporary
schedule in section 229.11. A bank must
choose among the alternative language based
on how it chooses to differentiate between
proprietary and nonproprietary ATMs, as re
quired under section 229.16(b)(5).

Appendix C

Model C-12
This clause must be incorporated in the spe
cific availability-policy disclosure by credit
unions seeking to satisfy the notice require
ment of section 229.14(b). This model clause
is only an example of a hypothetical policy.
Credit unions may follow any policy for ac
crual provided the method of accruing inter
est is the same for cash and check deposits.

M o d e ls C - 1 3 T h r o u g h C - 1 8 G e n e ra lly

These forms are models for various notices re
quired by the regulation.
Model C-13

Model C -ll
This clause must be incorporated in the spe
cific availability-policy disclosure by banks
that are not members of a local clearinghouse
and that choose to limit their customers’ abili
ty to withdraw cash on the third business day
following the deposit of a local check, as al
lowed during the temporary schedule under
section 229.11. Banks using model C-4 or
C- 6 may substitute this clause for the sections
titled “Local Checks” and “Nonlocal
Checks.”
Model C -ll A
This clause serves the same purpose as model
C -ll except that it reflects the section 229.11
rule for banks that are members of local clear
inghouses. Banks using models C-4 or C- 6
may substitute this clause for the sections ti
tled “Local Checks” and “Nonlocal Checks.”
Model C-11B
This clause may be used to disclose cash-with
drawal limitations under the permanent
schedule in section 229.12. Banks using model
C-7 to disclose availability under the perma
nent schedule may substitute this clause for
the sections titled “Local Checks” and “Non
local Checks.” This clause should not be used
in making disclosures under the temporary
schedule in section 229.11.

This form satisfies the written notice required
under section 229.13(g) of the regulation
when a bank places a hold based on a section
229.13 exception. If a hold is being placed on
more than one check in a deposit, each check
need not be described, but if different reasons
apply, each reason must be indicated. A bank
may use the actual date when funds will be
available for withdrawal rather than the num
ber of the business day following the day of
deposit. The bank must incorporate in the no
tice the material set out in brackets if it impos
es overdraft fees after invoking a section
229.13 exception.
Model C-13A
This form satisfies the same requirements as
model C-13, and the same instructions apply,
except that model C-13 A is for use by a bank
that invokes the reasonable-cause exception in
section 229.13. The form provides the bank
with a list of specific reasons that may be giv
en for invoking the exception. If a hold is be
ing placed on more than one check in a depos
it, each check must be described separately,
and if different reasons apply, each reason
must be indicated. Banks may disclose of the
reason for their doubting collectability by
checking the appropriate reason on the form.
If the “Other” category is checked, the reason
must be given.
155

Appendix C

Regulation CC Commentary

Model C-14

checks. The statements are both model clauses
and notices in that they may be added to a
bank’s specific policy disclosure to describe
how the bank treats payable-through checks,
and may be used as the notice that must be
sent to existing customers no later than De
cember 31, 1988, if the bank’s specific policy
disclosure given to the customers did not ac
curately reflect the treatment of payablethrough checks.

This form satisfies the notice required under
section 229.16(b)(2) when a bank with a
case-by-case hold policy imposes a delay on a
deposit. This notice does not require a state
ment of the specific reason for the hold, as is
the case when a section 229.13 exception hold
is placed. A bank may specify the actual date
when funds will be available for withdrawal
rather than the number of the business day
following the day of deposit when funds will
be available. The bank must incorporate in the
notice the material set out in brackets if it im
poses overdraft fees after invoking a case-by
case hold.
Model C-15 and C-15A
Either of these forms satisfies the notice re
quirements of section 229.18(b) (notice at lo
cations where employees accept consumer
deposits). Model C-15 is based on an avail
ability policy that is the same as the tempo
rary schedules in the regulation and the policy
reflected in models C-4 and C-5. Model
C-15 A may be used by a bank with a case-bycase availability policy.
Model C-16
This form satisfies the ATM notice require
ment of section 229.18(c)(1).
Model C-17
This form satisfies the ATM notice require
ment of section 229.18(c)(2) when receipt of
deposits at off-premises ATMs is delayed un
der section 229.19(a)(4). It is based on col
lection of deposits once a week. If collections
occur more or less frequently, the description
of when deposits are received must be adjust
ed accordingly.
Model C-18
This form satisfies the notice requirements of
section 229.18(a) for deposit slips.
Model C-19 and C-19A
Either of these statements satisfies the require
ments set forth in the footnote to
229.16(b)(2) concerning payable-through
156

Regulation CC
A P P E N D I X D — In d o rs e m e n t S ta n d a rd s
1. T he depositary bank shall indorse a check
according to the following specifications:
•

Appendix D

° staying clear of the area on the back of the
check from 3.0 inches from the leading
edge of the check to the trailing edge of
the check.

T he indorsem ent shall contain—

—the bank’s nine-digit routing number,
set off- by arrows at each end of the
number and pointing toward the
number;
—the bank’s name/location; and
—the indorsement date.
• The indorsement may also contain—
—an optional branch identification;
—an optional trace/sequence number;
—an optional telephone number for re
ceipt of notification of large-dollar re
turned checks; and
—other optional information provided
that the inclusion of such information
does not interfere with the readability of
the indorsement.
• The indorsement shall be written in dark
purple or black ink.
• The indorsement shall be placed on the
back of the check so that the routing num
ber is wholly contained in the area 3.0
inches from the leading edge of the check
to 1.5 inches from the trailing edge of the
check. 1
2. E ach subsequent collecting bank indorser
shall protect the identifiability and legibility o f
the depositary bank indorsem ent by:

° including only its nine-digit routing num
ber (without arrows), the indorsement
date, and an optional trace/sequence
number;
° using an ink color other than purple; and
° indorsing in the area on the back of the
check from 0.0 inches to 3.0 inches from
the leading edge of the check.
3. Each returning bank indorser shall protect
the identifiability and legibility of the deposi
tary bank indorsement by:
° using an ink color other than purple;
1 The leading edge is defined as the right side of the
check looking at it from the front. The trailing edge is de
fined as the left side of the check looking at it from the
front. See American National Standards Committee on Fi
nancial Services Specification f o r the Placem ent a n d Loca
tion o f M IC R Printing, X 9.13.

157

■

Expedited Funds Availability Act
12 USC 4001 et seq.; 101 Stat. 635; Pub. L. 100-86 (August 10, 1987)

Competitive Equality Banking Act,
Title VI
Section
601 Short title
602 Definitions
603 Expedited funds availability schedules
604 Safeguard exceptions
605 Disclosure of funds availability policies
606 Payment of interest
607 Miscellaneous provisions
608 Effect on state law
609 Regulations and reports by Board
610 Administrative enforcement
611 Civil liability
612 Parity in clearing

SECTION 601— Short Title
This title may be cited as the “Expedited
Funds Availability Act”.
[12 USC 4001 note.]

SECTION 602—Definitions
For purposes of this title—
(1) The term “account” means a demand de
posit account or other similar transaction ac
count at a depository institution.
(2) The term “Board” means the Board of
Governors of the Federal Reserve System.
(3) The term “business day” means any day
other than a Saturday, Sunday, or legal
holiday.
(4) The term “cash” means United States
coins and currency, including Federal Reserve
notes.
(5) The term “cashier’s check” means any
check which—
(A) is drawn on a depository institution;
(B) is signed by an officer or employee of
such depository institution; and
(C) is a direct obligation of such deposito
ry institution.
( 6 ) The term “certified check” means any

check with respect to which a depository insti
tution certifies that—
(A) the signature on the check is genuine;
and
(B) such depository institution has set
aside funds which—
(i) are equal to the amount of the check;
and
(ii) will be used only to pay such check.
(7) The term “check” means any negotiable
demand draft drawn on or payable through an
office of a depository institution located in the
United States. Such term does not include
noncash items.
( 8 ) The term “check clearinghouse associa
tion” means any arrangement by which par
ticipant depository institutions exchange de
posited checks on a local basis, including an
entire metropolitan area, without using the
check processing facilities of the Federal Re
serve System.
(9) The term “check processing region”
means the geographical area served by a Fed
eral Reserve bank check processing center or
such larger area as the Board may prescribe
by regulations.
(10) The term “consumer account” means
any account used primarily for personal, fami
ly, or household purposes.
(11) The term “depository check” means
any cashier’s check, certified check, teller’s
check, and any other functionally equivalent
instrument as determined by the Board.
(12) The term “depository institution” has
the meaning given such term in clauses (i)
through (vi) of section 19(b)(1)(A) of the
Federal Reserve Act. Such term also includes
an office, branch, or agency of a foreign bank
located in the United States.
(13) The term “local originating depository
institution” means any originating depository
institution which is located in the same check
processing region as the receiving depository
institution.
(14) The term “noncash item” means—
(A) a check or other demand item to
which a passbook, certificate, or other doc
ument is attached;
159

§602

(B) a check or other demand item which is
accompanied by special instructions, such
as a request for special advise of payment or
dishonor; or
(C) any similar item which is otherwise
classified as a noncash item in regulations
of the Board.
(15) The term “nonlocal originating deposi
tory institution” means any originating depos
itory institution which is not a local deposito
ry institution.
(16) The term “proprietary ATM” means an
automated teller machine which is—
(A) located—
(i) at or adjacent to a branch of the re
ceiving depository institution; or
(ii) in close proximity, as defined by the
Board, to a branch of the receiving de
pository institution; or
(B) owned by, operated exclusively for, or
operated by the receiving depository
institution.
(17) The term “originating depository insti
tution” means the branch of a depository in
stitution on which a check is drawn.
(18) The term “nonproprietary ATM”
means an automated teller machine which is
not a proprietary ATM.
(19) The term “participant” means a deposi
tory institution which—
(A) is located in the same geographic area
as that served by a check clearinghouse as
sociation; and
(B) exchanges checks through the check
clearinghouse association, either directly or
through an intermediary.
(20) The term “receiving depository institu
tion” means the branch of a depository insti
tution or the proprietary ATM in which a
check is first deposited.
(21) The term “State” means any State, the
District of Columbia, the Commonwealth of
Puerto Rico, or the Virgin Islands.
(22) The term “teller’s check” means any
check issued by a depository institution and
drawn on another depository institution.
(23) The term “United States” means the
several States, the District of Columbia, the
Commonwealth of Puerto Rico, and the Vir
gin Islands.
(24) The term “unit of general local govern
ment” means any city, county, town, town160

Expedited Funds Availability Act
ship, parish, village, or o th er general purpose
political subdivision o f a State.
(25) T he term “ w ire tran sfer” has such
m eaning as th e B oard shall prescribe by
regulations.
[12 u s e 4001.]

S E C T IO N 6 0 3 — E x p e d ite d F u n d s
A v a ila b ility S c h e d u le s

(a) Next business day availability for certain
deposits.
(1) Except as provided in subsection (e)
and in section 604, in any case in which—
(A) any cash is deposited in an account
at a receiving depository institution
staffed by individuals employed by such
institution, or
(B) funds are received by a depository
institution by wire transfer for deposit in
an account at such institution,
such cash or funds shall be available for
withdrawal not later than the business day
after the business day on which such cash is
deposited or such funds are received for
deposit.
(2) Funds deposited in an account at a de
pository institution by check shall be avail
able for withdrawal not later than the busi
ness day after the business day on which
such funds are deposited in the case of—
(A) a check which—
(i) is drawn on the Treasury of the
United States; and
(ii) is endorsed only by the person to
whom it was issued;
(B) a check which—
(i) is drawn by a State;
(ii) is deposited in a receiving deposi
tory institution which is located in
such State and is staffed by individuals
employed by such institution;
(iii) is deposited with a special deposit
slip which indicates it is a check drawn
by a State; and
(iv) is endorsed only by the person to
whom it was issued;
(C) a check which—
(i) is drawn by a unit of general local
government;
(ii) is deposited in a receiving deposi

§603

Expedited Funds Availability Act

tory institution which is located in the
same State as such unit of general local
government and is staffed by individu
als employed by such institution;
(iii) is deposited with a special deposit
slip which indicates it is a check drawn
by a unit of general local government;
and
(iv) is endorsed only by the person to
whom it was issued;
(D) the first $100 deposited by check or
checks on any one business day;
(E) a check deposited in a branch of a
depository institution and drawn on the
same or another branch of the same de
pository institution if both such branches
are located in the same State or the same
check processing region;
(F) a cashier’s check, certified check,
teller’s check, or depository check
which—
(i) is deposited in a receiving deposi
tory institution which is staffed by in
dividuals employed by such institution;
(ii) is deposited with a special deposit
slip which indicates it is a cashier’s
check, certified check, teller’s check, or
depository check, as the case may be;
and
(iii) is endorsed only by the person to
whom it was issued.
(b) Permanent schedule. (1) Subject to par
agraph (3) of this subsection, subsections
(a )( 2 ), (d), and (e) of this section, and
section 604, not more than 1 business day
shall intervene between the business day on
which funds are deposited in an account at
a depository institution by a check drawn
on a local originating depository institution
and the business day on which the funds
involved are available for withdrawal.
(2) Subject to paragraph (3) of this sub
section, subsections (a)( 2 ), (d), and (e) of
this section, and section 604, not more than
4 business days shall intervene between the
business day on which funds are deposited
in an account at a depository institution by
a check drawn on a nonlocal originating de
pository institution and the business day on
which such funds are available for
withdrawal.

(3) (A) Except as provided in subpara
graph (B), funds deposited in an account
in a depository institution by check (oth
er than a check described in subsection
(a )( 2 )) shall be available for cash with
drawal not later than the business day af
ter the business day on which such funds
otherwise are available under paragraph
( 1) or ( 2 ).
(B) Not more than $400 (or the maxi
mum amount allowable in the case of a
withdrawal from an automated teller ma
chine but not more than $400) of funds
deposited by one or more checks to
which this paragraph applies shall be
available for cash withdrawal not later
than 5 o’clock post meridian of the busi
ness day on which such funds are avail
able under paragraph (1) or (2). If
funds deposited by checks described in
both paragraph ( 1 ) and paragraph ( 2 )
become available for cash withdrawal un
der this paragraph on the same business
day, the limitation contained in this subparagraph shall apply to the aggregate
amount of such funds.
(C) Any amount available for with
drawal under this paragraph shall be in
addition to the amount available under
subsection (a ) (2 ) ( D ) .

(4) This subsection shall apply with re
spect to funds deposited by check in an ac
count at a depository institution on or after
September 1, 1990, except that the Board
may, by regulation, make this subsection or
any part of this subsection applicable earlier
than September 1, 1990.
(c) Temporary schedule. (1)(A) Subject to
subparagraph (B) of this paragraph, sub
sections (a )( 2 ), (d), and (e) of this sec
tion, and section 604, not more than 2
business days shall intervene between the
business day on which funds are deposit
ed in an account at a depository institu
tion by a check drawn on a local
originating depository institution and the
business day on which such funds are
available for withdrawal.
(B) (i) Except as provided in clause (ii),
funds deposited in an account in a de
pository institution by check drawn on

161

§603

a local depository institution that is
not a participant in the same check
clearinghouse association as the receiv
ing depository institution (other than a
check described in subsection (a )( 2 ))
shall be available for cash withdrawal
not later than the business day after
the business day on which such funds
otherwise are available under subpara
graph (A).
(ii) Not more than $400 (or the maxi
mum amount allowable in the case of a
withdrawal from an automated teller
machine but not more than $400) of
funds deposited by one or more checks
to which this subparagraph applies
shall be available for cash withdrawal
not later than 5 o’clock post meridian
of the business day on which such
funds are available under subpara
graph (A).
(iii) Any amount available for with
drawal under this subparagraph shall
be in addition to the amount available
under subsection (a)(2)(D ).
(2) Subject to subsections (a)(2), (d),
and (e) of this section and section 604, not
more than 6 business days shall intervene
between the business day on which funds
are deposited in an account at a depository
institution by a check drawn on a nonlocal
originating depository institution and the
business day on which such funds are avail
able for withdrawal.
(3) This subsection shall apply with re
spect to funds deposited by check in an ac
count at a depository institution after Au
gust 31, 1988, and before September 1,
1990, except as may be otherwise provided
under subsection (b)(4).
(d) Time period adjustments. (1) Notwith
standing any other provision of law, the
Board shall, by regulation, reduce the time
periods established under subsections (b),
(c), and (e) to as short a time as possible
and equal to the period of time achievable
under the improved check clearing system
for a receiving depository institution to rea
sonably expect to learn of the nonpayment
of most items for each category of checks.
(2) Notwithstanding any other provision
162

Expedited Funds Availability Act

of law, any time period established under
subsection (b), (c), or (e) shall be extend
ed by 1 business day in the case of any de
posit which is both—
(A) deposited in an account at a deposi
tory institution which is located in Alas
ka, Hawaii, Puerto Rico, or the Virgin
Islands; and
(B) deposited by a check drawn on an
originating depository institution which
is not located in the same State, common
wealth, or territory as the receiving de
pository institution.
(e) Deposits at an ATM. (1)(A) Not more
than 6 business days shall intervene be
tween the business day a deposit de
scribed in subparagraph (B) is made at a
nonproprietary automated teller machine
(for deposit in an account at a depository
institution) and the business day on
which funds from such deposit are avail
able for withdrawal.
(B) A deposit is described in this subparagraph if it is—
(i) a cash deposit;
(ii) a deposit made by a check de
scribed in subsection (a )( 2 );
(iii) a deposit made by a check drawn
on a local originating depository insti
tution (other than a check described in
subsection (a )( 2 )); or
(iv) a deposit made by a check drawn
on a nonlocal originating depository
institution (other than a check de
scribed in subsection (a )( 2 )).
(C) This paragraph shall apply with re
spect to funds deposited at a nonproprie
tary automated teller machine after Au
gust 31, 1988, and before September 1,
1990.
(2)(A) Not more than 1 business day
shall intervene between the business day
on which a deposit described in para
graph (1)(B) (i), (ii), or (iii) is made
at a nonproprietary automated teller ma
chine (for deposit in an account at a de
pository institution) and the business day
on which funds from such deposit are
available for withdrawal.
(B) Not more than 4 business days shall
intervene between the business day a de

Expedited Funds Availability Act

posit described in paragraph (l)(B )(iv)
is made at a nonproprietary automated
teller machine (for deposit in an account
at a depository institution) and the busi
ness day on which funds from such de
posit are available for withdrawal.
(C) For the purpose of this paragraph, a
check is drawn on a local originating de
pository institution if that depository
institution is located in the same check
processing region as the receiving non
proprietary ATM.
(D) This paragraph shall apply with re
spect to funds deposited at a nonproprie
tary automated teller machine on or after
September 1, 1990.
(3) The provisions of subsections (a), (b),
and (c) shall apply with respect to any
funds deposited at a proprietary automated
teller machine for deposit in an account at a
depository institution.
(4) The Board shall, either directly or
through the Consumer Advisory Council,
establish and maintain a dialogue with de
pository institutions and their suppliers on
the computer software and hardware avail
able for use by automated teller machines,
and shall, not later than September 1 of
each of the first 3 calendar years beginning
after the date of th e enactm ent of this title,
report to the Congress regarding such soft
ware and hardware and regarding the po
tential for improving the processing of au
tomated teller machine deposits.
(f) Check return; notice of nonpayment. No
provision of this section shall be construed as
requiring that, with respect to all checks de
posited in a receiving depository institution—
( 1 ) such checks be physically returned to
such depository institution; or
(2 ) any notice of nonpayment of any such
check be given to such depository institu
tion within the times set forth in subsection
(a), (b), (c), or (e) or in the regulations
issued under any such subsection.
[12 USC 4002.]

S E C T IO N 604— S a fe g u a rd E x c e p tio n s

(a) New accounts. Notwithstanding section

§ 604

603, in the case of any account established at a
depository institution by a new depositor, the
following provisions shall apply with respect
to any deposit in such account during the 30day period (or such shorter period as the
Board may establish) beginning on the date
such account is established—
(1) Except as provided in paragraph (3),
in the case of—
(A) any cash deposited in such account;
(B) any funds received by such deposi
tory institution by wire transfer for de
posit in such account;
(C) any funds deposited in such account
by cashier’s check, certified check, teller’s
check, depository check, or traveler’s
check; and
(D) any funds deposited by a govern
ment check which is described in subpar
agraph (A), (B), or (C) of section
603(a)(2),
such cash or funds shall be available for
withdrawal on the business day after the
business day on which such cash or funds
are deposited or, in the case of a wire trans
fer, on the business day after the business
day on which such funds are received for
deposit.
(2) In the case of any funds deposited in
such account by a check (other than a
check described in subparagraph (C) or
(D) of paragraph (1)), the availability for
withdrawal of such funds shall not be sub
ject to the provisions of section 603(b),
603(c), or paragraphs ( 1) and (2 ) of sec
tion 603(e).
(3) In the case of funds deposited in such
account during such period by checks de
scribed in subparagraph (C) or (D) of par
agraph ( 1) the aggregate amount of which
exceeds $5,000—
(A) paragraph (1) shall apply only with
respect to the first $5,000 of such aggre
gate amount; and
(B) not more than 8 business days shall
intervene between the business day on
which any such funds are deposited and
the business day on which such excess
amount shall be available for withdrawal.
(b) Large or redeposited checks; repeated
overdrafts. The Board may, by regulation, es163

§ 604

tablish reasonable exceptions to any time limi
tation established under subsection (b), (c),
or (e) of section 603 for—
( 1 ) the amount of deposits by one or more
checks that exceeds the amount of $5,000 in
any one day;
( 2 ) checks that have been returned unpaid
and redeposited; and
(3) deposit accounts which have been
overdrawn repeatedly.
(c) Reasonable cause exception. (1) In ac
cordance with regulations which the Board
shall prescribe, subsections (a)(2)(F ),
(b), (c), and (e) of section 603 shall not
apply with respect to any check deposited
in an account at a depository institution if
the receiving depository institution has rea
sonable cause to believe that the check is
uncollectible from the originating deposito
ry institution. For purposes of the preced
ing sentence, reasonable cause to believe re
quires the existence of facts which would
cause a well-grounded belief in the mind of
a reasonable person. Such reasons shall be
included in the notice required under sub
section (f).
(2) No determination under this subsec
tion may be based on any class of checks or
persons.
(3) If the receiving depository institution
determines that a check deposited in an ac
count is a check described in paragraph
( 1), the receiving depository institution
shall not assess any fee for any subsequent
overdraft with respect to such account, if—
(A) the depositor was not provided with
the written notice required under subsec
tion (f) (with respect to such determina
tion) at the time the deposit was made;
(B) the overdraft would not have oc
curred but for the fact that the funds so
deposited are not available; and
(C) the amount of the check is collected
from
the
originating
depository
institution.
(4) Each agency referred to in section
610(a) shall monitor compliance with the
requirements of this subsection in each reg
ular examination of a depository institution
and shall describe in each report to the
Congress the extent to which this subsec
164

Expedited Funds Availability Act

tion is being complied with. For the pur
pose of this paragraph, each depository in
stitution shall retain a record of each notice
provided under subsection (f) as a result of
the application of this subsection.
(d) Emergency conditions. Subject to such
regulations as the Board may prescribe, sub
sections (b), (c), and (e) of section 603 shall
not apply to funds deposited by check in any
receiving depository institution in the case
of—
( 1) any interruption of communication
facilities;
( 2 ) suspension of payments by another de
pository institution;
(3) any war; or
(4) any emergency condition beyond
the control of the receiving depository
institution,
if the receiving depository institution exercises
such diligence as the circumstances require.
(e) Prevention of fraud losses. (1) The
Board may, by regulation or order, suspend
the applicability of this title, or any portion
thereof, to any classification of checks if the
Board determines that—
(A) depository institutions are experi
encing an unacceptable level of losses due
to check-related fraud, and
(B) suspension of this title, or such por
tion of this title, with regard to the classi
fication of checks involved in such fraud
is necessary to diminish the volume of
such fraud.
(2) No regulation prescribed or order is
sued under paragraph ( 1) shall remain in
effect for more than 45 days (excluding Sat
urdays, Sundays, legal holidays, or any day
either House of Congress is not in session).
(3) (A) Within 10 days of prescribing
any regulation or issuing any order under
paragraph (1), the Board shall transmit
a report of such action to the Committee
on Banking, Finance and Urban Affairs
of the House of Representatives and the
Committee on Banking, Housing, and
Urban Affairs of the Senate.
(B) Each report under subparagraph
(A) shall contain—

§605

Expedited Funds Availability Act

(i) the specific reason for prescribing
the regulation or issuing the order;
(ii) evidence considered by the Board
in making the determination under
paragraph ( 1) with respect to such
regulation or order; and
(iii) specific examples of the checkrelated fraud giving rise to such regula
tion or order.
(f) Notice of exception; availability within rea
sonable time. (1) If any exception contained
in this section (other than subsection (a))
applies with respect to funds deposited in
an account at a depository institution—
(A) the depository institution shall pro
vide notice in the manner provided in
paragraph ( 2 ) of—
(i) the day the funds shall be made
available for withdrawal; and
(ii) the reason the exception was in
voked; and
(B) except where other time periods are
specifically provided in this title, the
availability of the funds deposited shall
be governed by the policy of the receiving
depository institution, but shall not ex
ceed a reasonable period of time as deter
mined by the Board.
(2) The notice required under paragraph
(1)(A) with respect to a deposit to which
an exception contained in this section ap
plies shall be made by the time provided in
the following subparagraphs:
(A) In the case of a deposit made in per
son by the depositor at the receiving de
pository institution, the depository insti
tution shall immediately provide such
notice in writing to the depositor.
(B) In the case of any other deposit
(other than a deposit described in subparagraph (C)), the receiving depository
institution shall mail the notice to the de
positor not later than the close of the
next business day following the business
day on which the deposit is received.
(C) In the case of a deposit to which
subsection (d) or (e) applies, notice
shall be provided by the depository insti
tution in accordance with regulations of
the Board.
(3) If the facts upon which the determina

tion of the applicability of an exception con
tained in subsection (b) or (c) to any de
posit only become known to the receiving
depository institution after the time notice
is required under paragraph ( 2 ) with re
spect to such deposit, the depository institu
tion shall mail such notice to the depositor
as soon as practicable, but not later than
the first business day following the day such
facts become known to the depository
institution.
[12 USC 4003.]

SECTION 605—Disclosure of Funds
Availability Policies
(a) Notice for new accounts. Before an ac
count is opened at a depository institution, the
depository institution shall provide written
notice to the potential customer of the specific
policy of such depository institution with re
spect to when a customer may withdraw
funds deposited into the customer’s account.
(b) Preprinted deposit slips. All preprinted
deposit slips that a depository institution fur
nishes to its customers shall contain a
summary notice, as prescribed by the Board in
regulations, that deposited items may not be
available for immediate withdrawal.
(c) Mailing of notice. (1) In the first regular
ly scheduled mailing to customers occur
ring after the effective date of this section,
but not more than 60 days after such effec
tive date, each depository institution shall
send a written notice containing the specific
policy of such depository institution with
respect to when a customer may withdraw
funds deposited into such customer’s ac
count, unless the depository institution has
provided a disclosure which meets the re
quirements of this section before such effec
tive date.
(2) A depository institution shall send a
written notice to customers at least 30 days
before implementing any change to the de
pository institution’s policy with respect to
when customers may withdraw funds de
posited into consumer accounts, except that
any change which expedites the availability
165

§605

of such funds shall be disclosed not later
than 30 days after implementation.
(3) Upon the request of any person, a de
pository institution shall provide or send
such person a written notice containing the
specific policy of such depository institution
with respect to when a customer may with
draw funds deposited into a customer’s
account.
(d) Posting of notice. (1) Each depository in
stitution shall post, in a conspicuous place
in each location where deposits are accept
ed by individuals employed by such deposi
tory institution, a specific notice which de
scribes the time periods applicable to the
availability of funds deposited in a consum
er account.
(2) In the case of any automated teller ma
chine at which any funds are received for
deposit in an account at any depository in
stitution, the Board shall prescribe, by regu
lations, that the owner or operator of such
automated teller machine shall post or pro
vide a general notice that funds deposited in
such machine may not be immediately
available for withdrawal.
(e) Notice of interest payment policy. If a de
pository institution described in section
606(b) begins the accrual of interest or divi
dends at a later date than the date described
in section 606(a) with respect to all funds,
including cash, deposited in an interest-bear
ing account at such depository institution, any
notice required to be provided under subsec
tions (a) and (c) shall contain a written de
scription of the time at which such depository
institution begins to accrue interest or divi
dends on such funds.

Expedited Funds Availability Act

(A) uses any appropriate model form or
clause as published by the Board, or
(B) uses any such model form or clause
and changes such form or clause by—
(i) deleting any information which is
not required by this title; or
(ii) rearranging the format.
(3) Nothing in this title requires the use of
any such model form or clause prescribed
by the Board under this subsection.
(4) Model disclosure forms and clauses
shall be adopted by the Board only after
notice duly given in the Federal Register
and an opportunity for public comment in
accordance with section 553 of title 5, Unit
ed States Code.
[12 USC 4004.]

S E C T I O N 6 0 6 — P a y m e n t o f I n te r e s t

(a) In general. Except as provided in subsec
tion (b) or (c) and notwithstanding any oth
er provision of law, interest shall accrue on
funds deposited in an interest-bearing account
at a depository institution beginning not later
than the business day on which the depository
institution receives provisional credit for such
funds.
(b) Special rule for credit unions. Subsection
(a) shall not apply to an account at a deposi
tory institution described in section
19(b)(1) (A) (iv) of the Federal Reserve Act
if the depository institution—
( 1) begins the accrual of interest or divi
dends at a later date than the date described
in subsection (a) with respect to all funds,
including cash, deposited in such account;
and
( 2 ) provides notice of the interest payment
policy in the manner required under section
605(e).

(f) Model disclosure forms. (1) The Board
shall publish model disclosure forms and
clauses for common transactions to facili
tate compliance with the disclosure require
ments of this section and to aid customers
(c) Exception for checks returned unpaid. No
by utilizing readily understandable
provision of this title shall be construed as re
language.
quiring the payment of interest or dividends
(2) A depository institution shall be
on funds deposited by a check which is re
deemed to be in compliance with the re
turned unpaid.
quirements of this section if such institu
tion—
[12 USC 4005.]
166

Expedited Funds Availability Act
S E C T IO N 607— M is c e lla n e o u s
P ro v is io n s

(a) After-hours deposits. For purposes of this
title, any deposit which is made on a Satur
day, Sunday, legal holiday, or after the close
of business on any business day shall be
deemed to have been made on the next busi
ness day.
(b) Availability at start of business day. Ex
cept as provided in subsections (b)(3) and
(c ) (1)(B) of section 603, if any provision of
this title requires that funds be available for
withdrawal on any business day, such funds
shall be available for withdrawal at the start
of such business day.
(c) Effect on policies of depository institutions.
No provision of this title shall be construed
as—
( 1) prohibiting a depository institution
from making funds available for withdrawal
in a shorter period of time than the period
of time required by this title; or
( 2 ) affecting a depository institution’s
right—
(A) to accept or reject a check for
deposit;
(B) to revoke any provisional settlement
made by the depository institution with
respect to a check accepted by such insti
tution for deposit;
(C) to charge back the depositor’s ac
count for the amount of such check; or
(D) to claim a refund of such provision
al credit.
(d) Prohibition on freezing certain funds in an
account. In any case in which a check is de
posited in an account at a depository institu
tion and the funds represented by such check
are not yet available for withdrawal pursuant
to this title, the depository institution may not
freeze any other funds in such account (which
are otherwise available for withdrawal pursu
ant to this title) solely because the funds so
deposited are not yet available for withdrawal.
(e) Employee training on and compliance with
the requirements of this title. Each depository
institution shall—
( 1) take such actions as may be necessary
fully to inform each employee (who per

§609

forms duties subject to the requirements of
this title) of the requirements of this title;
and
( 2 ) establish and maintain procedures rea
sonably designed to assure and monitor em
ployee compliance with such requirements.
[12 USC 4006.]

S E C T IO N 6 0 8 — E ffe c t o n S ta te L a w

(a) In general. Any law or regulation of any
State in effect on September 1, 1989, which
requires that funds deposited or received for
deposit in an account at a depository institu
tion chartered by such State be made available
for withdrawal in a shorter period of time
than the period of time provided in this title
or in regulations prescribed by the Board un
der this title (as in effect on September 1,
1989) shall—
( 1) supersede the provisions of this title
and any regulations by the Board to the ex
tent such provisions relate to the time by
which funds deposited or received for de
posit in an account shall be available for
withdrawal; and
( 2 ) apply to all federally insured depository
institutions located within such State.
(b) Override of certain state laws. Except as
provided in subsection (a), this title and regu
lations prescribed under this title shall super
sede any provision of the law of any State,
including the Uniform Commercial Code as in
effect in such State, which is inconsistent with
this title or such regulations.
[12 USC 4007.]

S E C T IO N 6 0 9 — R e g u la tio n s a n d
R e p o r ts b y B o a rd

(a) In general. After notice and opportunity
to submit comment in accordance with sec
tion 553(c) of title 5, United States Code, the
Board shall prescribe regulations—
( 1) to carry out the provisions of this title;
( 2 ) to prevent the circumvention or eva
sion of such provisions; and
(3) to facilitate compliance with such
provisions.
167

§609

Expedited Funds Availability Act

(b) Regulation relating to improvement of
determines, pursuant to the study under
check processing system. In order to improve
subsection (f), that such a process is feasi
the check processing system, the Board shall
ble; and
consider (among other proposals) requiring,
(9) originating depository institutions be
by regulation, that—
permitted to return unpaid checks directly
( 1) depository institutions be charged
to, and obtain reimbursement for such
based upon notification that a check or sim
checks directly from, the receiving deposi
ilar instrument will be presented for
tory institution.
payment;
(c) Regulatory responsibility of Board for
(2) the Federal Reserve banks and deposi
payment system.
tory institutions provide for check
(1) In order to carry out the provisions of
truncation;
this title, the Board of Governors of the
(3) depository institutions be provided in
Federal Reserve System shall have the re
centives to return items promptly to the de
sponsibility to regulate—
pository institution of first deposit;
(A) any aspect of the payment system,
(4) the Federal Reserve banks and deposi
including the receipt, payment, collec
tory institutions take such actions as are
tion, or clearing of checks; and
necessary to automate the process of re
(B) any related function of the payment
turning unpaid checks;
system with respect to checks.
(5) each depository institution and Federal
(2) The Board shall prescribe such regula
Reserve bank—
tions as it may determine to be appropriate
(A) place its endorsement, and other
to carry out its responsibility under para
notations specified in regulations of the
graph ( 1 ).
Board, on checks in the positions speci
fied in such regulations; and
(d) Reports. (1)(A) The Board shall trans
(B) take such actions as are necessary
mit a report to both Houses of the Con
to—
gress not later than 18, 30, and 48
(i) automate the process of reading
months after the date of the enactment of
this title.
endorsements; and
(ii) eliminate unnecessary endorse
(B) Each such report shall describe—
ments;
(i) the actions taken and progress
( 6 ) within one business day after an origi
made by the Board to implement the
nating depository institution is presented a
schedules established in section 603,
check (for more than such minimum
and
amount as the Board may prescribe)—
(ii) the impact of this title on consum
(A) such originating depository institu
ers and depository institutions.
tion determines whether it will pay such
(2) (A) The Board shall transmit a report
check; and
to both Houses of the Congress not later
(B) if such originating depository insti
than 2 years after the date of the enact
tution determines that it will not pay
ment of this title regarding the effects the
such check, such originating depository
temporary schedule established under
institution directly notify the receiving
section 603(c) have had on depository
depository
institution
of
such
institutions and the public.
determination;
(B) Such report shall also assess the po
(7) regardless of where a check is cleared
tential impact the implementation of the
initially, all returned checks be eligible to be
schedule established in section 603(b)
returned through the Federal Reserve
will have on depository institutions and
System;
the public, including an estimate of the
( 8 ) Federal Reserve banks and depository
risks to and losses of depository institu
institutions participate in the development
tions and the benefits to consumers. Such
and implementation of an electronic clear
report shall also contain such recommen
inghouse process to the extent the Board
dations for legislative or administrative

168

Expedited Funds Availability Act

action as the Board may determine to be
necessary.
(3) Not later than 6 months after section
603 (b) takes effect, the Comptroller Gener
al of the United States shall transmit a re
port to the Congress evaluating the imple
mentation and administration of this title.
(e) Consultation. In prescribing regulations
under subsections (a) and (b), the Board
shall consult with the Comptroller of the Cur
rency, the Board of Directors of the Federal
Deposit Insurance Corporation, the Federal
Home Loan Bank Board, and the National
Credit Union Administration Board.
(f) Electronic clearinghouse study. (1) The
Board shall study the feasibility of modern
izing and accelerating the check payment
system through the development of an elec
tronic clearinghouse process utilizing exist
ing telecommunications technology to
avoid the necessity of actual presentment of
the paper instrument to a payor institution
before such institution is charged for the
item.
(2) In connection with the study required
under paragraph (1), the Board shall—
(A) consult with appropriate experts in
telecommunications technology; and
(B) consider all practical and legal im
pediments to the development of an elec
tronic clearinghouse process.
(3) The Board shall report its conclusions
to the Congress within 9 months of the date
of the enactment of this title.
[12 USC 4008.]

S E C T IO N 610— A d m in is tra tiv e
E n fo r c e m e n t

(a) Administrative enforcement. Compliance
with the requirements imposed under this ti
tle, including regulations prescribed by and
orders issued by the Board of Governors of
the Federal Reserve System under this title,
shall be enforced under—
(1) section 8 of the Federal Deposit Insur
ance Act in the case of—
(A) national banks, by the Comptroller
of the Currency;

§610

(B) member banks of the Federal Re
serve System (other than national
banks), by the Board of Governors of the
Federal Reserve System; and
(C) banks insured by the Federal De
posit Insurance Corporation (other than
members of the Federal Reserve Sys
tem), by the Board of Directors of the
Federal Deposit Insurance Corporation;
(2) section 5(d) of the Home Owners’
Loan Act of 1933, section 407 of the Na
tional Housing Act, and section 17 of the
Federal Home Loan Bank Act, by the Fed
eral Home Loan Bank Board (acting di
rectly or through the Federal Savings and
Loan Insurance Corporation), in the case
of any institution subject to any of those
provisions; and
(3) the Federal Credit Union Act, by the
National Credit Union Administration
Board with respect to any Federal credit
union or insured credit union.
(b) Additional powers. (1) For purposes of
the exercise by any agency referred to in
subsection (a) of this section of its powers
under any Act referred to in that subsec
tion, a violation of any requirement im
posed under this title shall be deemed to be
a violation of a requirement imposed under
that Act.
(2) In addition to its powers under any
provision of law specifically referred to in
subsection (a) of this section, each of the
agencies referred to in such subsection may
exercise, for purposes of enforcing compli
ance with any requirement imposed under
this title, any other authority conferred on
it by law.
(c) Enforcement by the Board. (1) Except to
the extent that enforcement of the require
ments imposed under this title is specifically
committed to some other Government
agency under subsection (a) of this section,
the Board of Governors of the Federal
Reserve System shall enforce such
requirements.
(2) If the Board determines that—
(A) any depository institution which is
not a depository institution described in
subsection (a), or
(B) any other person subject to the au
169

§610

thority of the Board under this title, in
cluding any person subject to the authori
ty of the Board under section 605(d) (2)
or 609(c),
has failed to comply with any requirement
imposed by this title or by the Board under
this title, the Board may issue an order pro
hibiting any depository institution, any
Federal Reserve bank, or any other person
subject to the authority of the Board from
engaging in any activity or transaction
which directly or indirectly involves such
noncomplying depository institution or per
son (including any activity or transaction
involving the receipt, payment, collection,
and clearing of checks and any related func
tion of the payment system with respect to
checks).

Expedited Funds Availability Act

minimum recovery shall be applicable;
and
(ii) the total recovery under this subparagraph in any class action or series
of class actions arising out of the same
failure to comply by the same deposi
tory institution shall not be more than
the lesser of $500,000 or 1 percent of
the net worth of the depository institu
tion involved; and
(3) in the case of any successful action to
enforce the foregoing liability, the costs of
the action, together with a reasonable attor
ney’s fee as determined by the court.

(b) Class action awards. In determining the
amount of any award in any class action, the
court shall consider, among other relevant
factors—
( 1) the amount of any actual damages
(d) Procedural rules. The authority of the
awarded;
Board to prescribe regulations under this title
( 2 ) the frequency and persistence of fail
does not impair the authority of any other
ures of compliance;
agency designated in this section to make
(3) the resources of the depository
rules regarding its own procedures in enforc
institution;
ing compliance with requirements imposed
(4) the number of persons adversely affect
under this title.
ed; and
[12 USC 4009.]
(5) the extent to which the failure of com
pliance was intentional.

S E C T IO N 611— C iv il L ia b ility

(a) Civil liability. Except as otherwise pro
vided in this section, any depository
institution which fails to comply with any re
quirement imposed under this title or any reg
ulation prescribed under this title with respect
to any person other than another depository
institution is liable to such person in an
amount equal to the sum of—
( 1) any actual damage sustained by such
person as a result of the failure;
(2 ) (A) in the case of an individual action,
such additional amount as the court may
allow, except that the liability under this
subparagraph shall not be less than $100
nor greater than $ 1,0 0 0 ; or
(B) in the case of a class action, such
amount as the court may allow, except
that—
(i) as to each member of the class, no
170

(c) Bona fide errors. (1) A depository insti
tution may not be held liable in any action
brought under this section for a violation of
this title if the depository institution dem
onstrates by a preponderance of the evi
dence that the violation was not intentional
and resulted from a bona fide error, not
withstanding the maintenance of proce
dures reasonably adapted to avoid any such
error.
(2) Examples of a bona fide error include
clerical, calculation, computer malfunction
and programming, and printing errors, ex
cept that an error of legal judgment with
respect to a depository institution’s obliga
tion under this title is not a bona fide error.
(d) Jurisdiction. Any action under this sec
tion may be brought in any United States dis
trict court, or in any other court of competen
jurisdiction, within one year after the date of
the occurrence of the violation involved.
(e) Reliance on Board rulings. No provision

Expedited Funds Availability Act

§613

of this section imposing any liability shall ap
ply to any act done or omitted in good faith in
conformity with any rule, regulation, or inter
pretation thereof by the Board of Governors
of the Federal Reserve System, notwithstand
ing the fact that after such act or omission has
occurred, such rule, regulation, or interpreta
tion is amended, rescinded, or determined by
judicial or other authority to be invalid for
any reason.

Reserve Act (12 U.S.C. 248a) is amended by
adding at the end thereof the following:
“ (e) All depository institutions, as defined
in section 19(b)(1) (12 U.S.C. 461(b)(1)),
may receive for deposit and as deposits any
evidences of transaction accounts, as defined
by section 19(b)(1) (12 U.S.C. 461(b)(1))
from other depository institutions, as defined
in section 19(b)(1) (12 U.S.C. 461(b)(1))
or from any office of any Federal Reserve
bank without regard to any Federal or State
(f) Authority to establish rules regarding loss
law restricting the number or the physical lo
es and liability among depository institutions.
cation or locations of such depository
The Board is authorized to impose on or allo
institutions.”.
cate among depository institutions the risks of
loss and liability in connection with any as (b) Effective date. The amendment made by
pect of the payment system, including the re subsection (a) shall take effect on the date of
ceipt, payment, collection, or clearing of enactment of this title.
checks, and any related function of the pay
[12 USC 248a note.]
ment system with respect to checks. Liability
under this subsection shall not exceed the
amount of the check giving rise to the loss or
liability, and, where there is bad faith, other
damages, if any, suffered as a proximate con
sequence of any act or omission giving rise to S E C T IO N 6 1 3 — E ffe c tiv e D a te s
the loss or liability.
(a) Except as provided in subsection (b),
this
title shall take effect on the date of the
[12 USC 4010.]
enactment of this title.
SECTION 612—Parity in Clearing

(b) Sections 603, 604, 605, 606, 610, and 611
shall take effect on September 1, 1988.

(a) In general. Section 11A of the Federal

[12 USC 4001 note.]

171

Board of Governors of the Federal Reserve System

A V A IL A B IL IT Y O F FUNDS AND C O L L E C T IO N O F C H EC K S
TECHNICAL AMENDMENTS TO REGULATION CC
(Effective October 25, 1988)

FEDERAL RESERVE SYSTEM
12 CFR Part 229

Telecommunications Device for the
Deaf, Eamestine Hill or Dorothea
Thompson (202/452-3544).
s u p p l e m e n t a r y INFORMATION: On May
[Regulation CC; Docket No. R-0643]
13,1988, the Board issued its Regulation
Ayailabillry of Funds and Collection of CC—Availability of Funds and
Collection of Checks (12 CFR Part 229)
Check©
to implement the Expedited Funds
AGSNOY: Board of Governors of the
Availability Act (the “Act”) (Title VI of
Federal Reserve System.
Pub. L. 100-86). 53 FR 19373 (May 27,
ACTION; Final rule.
1988). In keeping with the Board's view
that the Act established a clear link
summary: The Board is adopting as a
between the time it normally takes a
final rule, with minor technical changes, check to be cleared and returned, and
the interim amendment to Regulation CC the time within which the depositary
it adopted in August. The Board adopted bank 1 must make the funds available to
the interim rule to conform the definition the depositor, the regulations provided
of “paying bank” in Regulation CC to
that where a check is payable by one
the Expedited Funds Availability Act as bank but payable through 2 another and
interpreted by a court decision. The
sent to the payable through bank for
court found that in defining a payable
payment or collection, the location of
through bank as the paying bank where the payable through bank would
a check is written on one bank but
payable through another, Regulation CC
1 The Act uses the term “receiving depository
was inconsistent with the language of
institution” to mean "the branch of a depository
institution or the proprietary ATM in which a check
the Act.
EFFsersvi date: October 25,1988.
F©P3 FURTHER INFORMATION OONT&GT:

Joseph R. Alexander, Senior Attorney
(202/452-2489), Stephanie Martin,
Attorney (202/452-3198), Legal Division;
Louise L. Roseman, Assistant Director,
Division of Federal Reserve Bank
Operations (202/452-3874); Kathleen
Brueger, Staff Attorney, Division of
Community and Consumer Affairs (202 /
452-2412). For the hearing impaired only:

is first deposited.” 12 U.S.C. 4001(20). Because the
term "receiving depository institution” is unique to
the Act. the Board used the term "depositary bank,"
which, because it is used in the Uniform
Commercial Code (“U.C.C.”) and the Board's
Regulation J (12 CFTR Part 210), is familiar to the
banking industry.
2 When a check states on its face that it is
“payable through” a bank, that bank is referred to
as the "payable through bank.” Under the U.C.C., a
payable through bank is not named as the payor,
but is designated as a "collecting bank to maioa
presentment." U.C.C. § 3-120. Under the Board’s
Regulation J, a payable through bank is the '^paying
bank." 12 CFR 210.20).

determine whether a check is local or
nonlocal vis-a-vis the despostary bank
for the purposes of the funds availability
schedules in the regulation.
Shortly after the Board issued
Regulation CC, a trade association of
credit unions and one credit union
whose checks are payable through a
nonlocal bank filed suit against the
Board seeking to overturn the definition
of paying bank to the extent that the
definition included a payable through
bank where the check was drawn on a
credit union. The court granted the
plaintiffs’ motion for a summary
judgment and invalidated Regulation
CC’s definition of paying bank to the
extent that it includes a payable through
bank where the check is drawn on a
credit union. Credit Union National
Association v. Board of Governors, No.
88-1295 OG (B.D.C. July 28,1988). The
court found that the Board’s regulation
was inconsistent with the Act to the
extent that it defined the payable
through bank as the paying bank for
purposes of the Act’s funds availability
requirements.
The Act and Regulation CC took effect
five weeks after the court rendered its
decision. In order to clarify the duties of
banks and others in light of the court’s
order, the Board issued temporary
conforming amendments to Regulation
CC. The Board also requested comment
on the interim rales pending the Board’s
consideratioH of a final rule. 53 FR 31290
(August 18,1988).

P R I N T E D I N N E W Y O R K , F R O M F E D E R A L R E G IS T E R , V O L . 5 3 , N O . 2 1 2

For this Regulation to be complete, retain:
1) Regulation CC pamphlet, effective September 1, 1988.
2) This slip sheet.
[O V ER ]

The interim rule primarily affected the
definitions and the disclosure rales.
Where a check is payable by one bank
but payable through another bank, the
interim ral© prodded that the check
would be consMeped local or nonlocal
by reference to the location of the payor
bank, not by reference to the payable
through bank. The interim rale (fid not
affect payable through checks payable
by nonbank payors. Further, as payable
through checks bear the routing number
of the payable through bank, not the
payor, provisions in Regulation CC that
allowed a depositary bank to rely on the
routing number to determine whether a
check is local or nonlocal were
amended. The interim rale also
permitted banks whose initial
disclosures were affected by the court’s
decision to comply with the Act by
sending to their customers simple
clarifying notices in regularly scheduled
meetings.
Approximately 93 percent of the 155
comments the Board received on the
interim rale objected to the treatment of
bank payable through checks as local or
nonlocal based on the location of the
payor bank, because the rule creates
operational difficulties and increases
risks for depositary banks. Many of the
commenters suggested means of
addressing these operational problems
and risks. In a related action today, the
Board has requested comment on
several proposals to alleviate these
operational problems and risks. (See
Docket No. R-0848.)
After consideration of the comments,
the Board has determined to adopt in
final form the interim rule with two
technical changes:

(1 ) To insert the word “or” after the
fourth element in the definition of
“paying bank," and
(2 ) Clarify in the disclosure rules and
the Commentary that a bank that makes
funds available within the time periods
required for local checks is not required
to make the special disclosure.
List of Subjects in 12 CFR Part 229
Banks, Banking, Federal Reserve
System.
Accordingly, the interim rule
amending Regulation CC, 12 CFR Part
22S, which was published at 53 FR
312SM1298 on August 18,1988, is
adopted as a final rule with the
following changes:
PART
AVAILABILITY OF FUNDS
AND COLLECTION OF CHECKS
1 . The authority citation for Part 229
continues to read as follows:
Authority: T itle VI of Pub. L 100-88,101
S t e i 552, 635; 12 U.S.C. 4001 et seq.

2 . Section 229.2(z)(4) is revised to read
as follows:
§ 229.2
a

Etefiffrittena.

n
*

14 ‘ 4 A bank that m akes funds from
n oalogal ch eck s availab le for w ithdraw al
w ithin the tim e p eriods required for local
ch eck s under f § 229.11, 229.12, and 229.13 is
not required to provide this disclosure on
payab le through checks to its custom ers. * * *
[on page 46 of the Regulation CC pam phlet,
this footnote is referenced as 3a]

4.
Appendix E—-Commentary to Part
229, is amended by adding following the
fourth paragraph of the Commentary to
§ 229.16(b) a new paragraph to read as
follows:
Appendix E===€ommentary
*

3. Section 229.16(b)(2) is amended by
adding after the first sentence of the
footnote the following new sentence to
read m follows:

Section 229.16 Specific Availability
Policy Disclosures

-(b) * * *
G enerally, a bank that distin guish es in its
d isclosu re b etw een local and non local checks
b a sed on the routing number on the check
m ust d isclo se to its custom ers that certain
ch eck s, such as som e credit union payable
through drafts, w ill be treated as lo ca l or
non local b a sed on the location of the bank by
w h ich they are p ayab le (e.g., the credit
union), and not on the b a sis o f the location of
the bank w h o se routing number appears on
the check. A bank is not required to provide
this d isclosure, h ow ever, if it m akes the
p roceed s o f both local and n on local checks
availab le for w ithd raw al w ithin the time
isperiods required for lo ca l checks in §§ 229.11,
229.12, and 229.13.

(4)
Hi® bank through which a check
payable and to which it is sent for
payment or collection, if the check is not *
payable by a bank; or
* * * * *

g §29.18 [Amended]

By order of the Board of G overnors of the
F ederal R eserve System , O ctober 25,1988.
W illiam S. W iles,

Secretary of the Board.
[FR Doc. 88-25038 F iled 11-1-88; 8:45 am]
BILLING CODE 6210-01-13

Board of Governors of the Federal Reserve System

Regulation I
Collection of Checks
and Other Items
and Wire Transfers of Funds
by Federal Reserve Ranks
12 CFR 210; as amended effective September 1, 1988

A T /& X73

Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the
Federal Reserve District in which the inquiry arises.
August 1988

Contents

Page
Subpart A—Collection of Checks and
Other Items by Federal Reserve Banks
Section 210.1—Authority, purpose, and
scope....................................................
Section 210.2—Definitions .....................
Section 210.3—General provisions..........
(a) General........................................
(b) Binding effect...............................
(c) Government item s.......................
(d) Government senders.....................
(e) Foreign item s...............................
Section 210.4—Sending items to Reserve
Banks....................................................
Section 210.5—Sender’s agreement;
recovery of Reserve Bank.....................
(a) Sender’s agreement.......................
(b) Recovery by Reserve B a n k ..........
(c) Methods of recovery.....................
Section 210.6—Status, warranties, and
liability of Reserve B an k .....................
(a) Status and liability.......................
(b) Warranties and liability...............
Section 210.7—Presenting items for
payment................................................
(a) Presenting or sending...................
(b) Place of presentment...................
(c) Presenting or sending direct ........
(d) Item payable in another District ..
Section 210.8—Presenting noncash items
for acceptance......................................
Section 210.9—Paym ent.........................
(a) Cash items....................................
(b) Noncash items .............................
(c) Nonbank payor.............................
(d) Handling of payment...................
(e) Liability of Reserve Bank.............
Section 210.10—Time schedule and
availability of credits for cash items and
returned checks....................................
Section 210.11—Availability of proceeds
of noncash items; time schedule..........
(a) Availability of credit.....................
(b) Time schedule...............................
(c) Handling of payment...................

1
2
2
2
2
2
3
3
3
3
3
3
4
4
4
4
4
5
5
5
5
5
5
6
6
6
6

6
6
6
6

Page
Section 210.12—Return of cash items and
handling of returned checks................. 7
(a) Return of cash items..................... 7
(b) Return of checks not handled by
Reserve Banks............................... 7
(c) Paying bank’s and returning
bank’s agreement......................... 7
(d) Recovery by Reserve B a n k .......... 7
(e) Methods of recovery..................... 7
(f) Reserve Bank’s responsibility . . . . 8
(g) Settlement.................................... 8
8
Section 210.13—Unpaid items ...............
(a) Right of charge-back................... 8
(b) Suspension or closing of b a n k ___ 8
Section 210.14—Extension of timelimits . 8
Section 210.15—Direct presentment of
certain w arrants................................... 8
Subpart B—Wire Transfers of Funds
Section 210.25—Authority, purpose,
scope....................................................
Section 210.26—Definitions ...................
Section 210.27—General provisions........
(a) General........................................
(b) Binding effect...............................
(c) Government transferors and
transferees....................................
Section 210.28—Media for transfer items
and requests........................................
(a) Transfer items...............................
(b) Transfer requests.........................
Section 210.29—Transferor’s agreement .
Section 210.30—Transferee’s agreement .
Section 210.31—Sending transfer items
and requests ........................................
Section 210.32—Handling transfer items
and requests ........................................
(a) Intraoffice transactions...............
(b) Interoffice transactions ...............
(c) Notice of delay.............................
Section 210.33—Tim elimits...................
(a) Time schedule...............................
(b) Acting seasonably.........................

9
9
9
9
9
9
10

10
10
10
10
10
11

11
11
11
11
11
11

Contents

Page
(c) Transfers after closing hour.......... 11
(d) As-of adjustments......................... 11
Section 210.34—Advices of credit and
debit..................................................... 11
(a) Advice of credit ........................... 11
(b) Advice of debit............................. 11
Section 210.35—Revocation of transfer
items and requests ............................... 11
(a) Request for revocation................. 11
(b) Erroneous transfer....................... 11

Regulation J

Page
Section 210.36—Final payment; use of
funds.................................................... 12
(a) Final payment............................... 12
(b) Right to use funds......................... 12
Section 210.37—Timeliness of action . . . . 12
Section 210.38—Reserve Bank liability .. 12
(a) Limitations on liability.................. 12
(b) Damages...................................... 12
(c) Right to indemnity....................... 12
STATUTORY PROVISIONS ............... 13

Regulation J
Collection of Checks and Other Items
and Wire Transfers of Funds by Federal Reserve Banks
12 CFR 210*; as amended effective September 1, 1988

S U B P A R T A — C O L L E C T IO N O F
C H E C K S A N D O T H E R IT E M S B Y
FED ER A L RESERVE BANKS

S E C T IO N 2 1 0 .1 — A u th o r ity , P u rp o s e ,
a n d S co p e

The Board of Governors of the Federal Re
serve System (“Board”) has issued this sub
part pursuant to the Federal Reserve Act, sec
tion 13 (12 USC 342), section 11 (i) (12 USC
248 (i)), section 16 (12 USC 248 (o), 360);
the Expedited Funds Availability Act (12
USC 4001 et seq.); and other laws. This sub
part governs the collection of checks and oth
er cash and noncash items and the handling of
returned checks by Federal Reserve Banks. Its
purpose is to provide rules for collecting and
returning items and settling balances.

S E C T IO N 2 1 0 .2 — D e fin itio n s

As used in this subpart, unless the context
otherwise requires—
(a) “Actually and finally collected funds”
means cash or any other form of payment that
is, or has become, final and irrevocable.
(b) “Bank” includes a depository institution
as defined in section 19 of the Federal Reserve
Act (12 USC 461(b)).
(c) “Bank draft” means a check drawn by
one bank on another bank.
(d) “Banking day” means a day during
which a bank is open to the public for carry
ing on substantially all its banking functions.
(e) “Cash item” means—
( 1) a check other than one classified as a
noncash item under this section; or
( 2 ) any other item payable on demand and
collectible at par that the Reserve Bank of
the District in which the item is payable is
* Code of Federal Regulations, title 12, chapter II, part

210.

willing to accept as a cash item. “Cash
item” does not include a returned check.
(f) “Check” means a draft, as defined in the
Uniform Commercial Code, that is drawn on
a bank and payable on demand. “Check as
defined in 12 CFR 229.2(k)” means an item
defined as a check in 12 CFR 229.2(k) for
purposes of subpart C of part 229.
(g) “Item” means an instrument for the pay
ment of money, whether negotiable or not,
that is—
(1) payable in a Federal Reserve District1
(“District”);
(2) sent by a sender to a Reserve Bank for
handling under this subpart; and
(3) collectible in funds acceptable to the
Reserve Bank of the District in which the
instrument is payable.
Unless otherwise indicated, “item” includes
both cash and noncash items. “Item” does not
include a check that cannot be collected at
par, or an “item” as defined in section 210.26
that is handled under subpart B. Unless other
wise indicated, “item” includes both a cash
and a noncash item, and includes a returned
check sent by a paying or returning bank.
“Item” does not include a check that cannot
be collected at par, or an “item” as defined in
section 210.26 that is handled under subpart
B.
(h) “Nonbank payor” means a payor of an
item, other than a bank.
(i) “Noncash item” means an item that a re
ceiving Reserve Bank classifies in its operating
circulars as requiring special handling. The
term also means an item normally received as
a cash item if a Reserve Bank decides that
special conditions require that it handle the
item as a noncash item.
1 For purposes of this subpart, the Virgin Islands and
Puerto Rico are deemed to be in the Second District, and
Guam, American Samoa, and the Northern Mariana Is
lands in the Twelfth District.
1

§ 2 1 0 .2

(j) “Paying bank” means—
( 1 ) the bank by which an item is payable,
unless the item is payable or collectible at
or through another bank and is sent to the
other bank for payment or collection;
( 2 ) the bank at or through which an item
is payable or collectible and to which it is
sent for payment or collection; or
(3) The bank whose routing number ap
pears on a check in magnetic characters or
fractional form and to which the check is
sent for payment or collection.
(k) “Returned check” means a cash item or
a check as defined in 12 CFR 229.2(k) re
turned by a paying bank, including a notice of
nonpayment in lieu of a returned check,
whether or not a Reserve Bank handled the
check for collection.
(/) “Sender” means any of the following that
sends an item to a Reserve Bank for forward
collection: a depository institution, a clearing
institution, another Reserve Bank, an interna
tional organization, a foreign correspondent,
or a branch or agency of a foreign bank main
taining reserves u n d e r se c tio n 7 of th e In ter
national Banking Act of 1978 (12 USC 347d,
3105).
(1) “Depository institution” means a de
pository institution as defined in section
19(b) of the Federal Reserve Act (12 USC
461(b)).
(2) “Clearing institution” means—
(i) an institution that is not a depository
institution, but maintains with a Reserve
Bank the balance referred to in the first
paragraph of section 13 of the Federal
Reserve Act (12 USC 342); or
(ii) a corporation that maintains an ac
count with a Reserve Bank in conformity
with section 211.4 of this chapter (Regu
lation K).
(3) “International organization” means an
international organization for which a Re
serve Bank is empowered to act as deposi
tary or fiscal agent and maintains an
account.
(4) “Foreign correspondent” means any of
the following for which a Reserve Bank
maintains an account: a foreign bank or
banker, a foreign state as defined in section
2

Regulation J

25(b) of the Federal Reserve Act (12 USC
632), or a foreign correspondent or agency
referred to in section 14(e) of that act (12
USC 358).
(m) “State” means a state of the United
States, the District of Columbia, Puerto Rico,
or a territory, possession, or dependency of
the United States.
Unless the context otherwise requires, the
terms not defined herein have the meanings
set forth in 12 CFR 229.2 applicable to sub
part C of part 229, and the terms not defined
herein or in 12 CFR 229.2 have the meanings
set forth in the Uniform Commercial Code.

S E C T I O N 2 1 0 .3 — G e n e ra l P ro v is io n s

(a) General. Each Reserve Bank shall receive
and handle items in accordance with this subpart, and shall issue operating circulars gov
erning the details of its handling of items and
other matters deemed appropriate by the Re
serve Bank. The circulars may, among other
things, classify cash items and noncash items,
require separate sorts and letters, and provide
different closing times for the receipt of differ
ent classes or types of items.
(b) Binding effect. This subpart, together
with subpart C of part 229 and the operating
circulars of the Reserve Banks, are binding on
all parties interested in an item handled by
any Reserve Bank.
(c) Government items. As depositaries and
fiscal agents of the United States, Reserve
Banks handle certain items payable by the
United States or certain federal agencies as
cash or noncash items. To the extent provided
by regulations issued by, and arrangements
made with, the United States Treasury De
partment and other government departments
and agencies, the handling of such items is
governed by this subpart. The Reserve Banks
shall include in their operating circulars such
information regarding these regulations and
arrangements as the Reserve Banks deem
appropriate.
(d) Government senders. Except as otherwise
provided by statutes of the United States, or

Regulation J

regulations issued or arrangements made
thereunder, this subpart and the operating cir
culars of the Reserve Banks apply to the fol
lowing when acting as a sender: a department,
agency, instrumentality, independent estab
lishment, or office of the United States, or a
wholly owned or controlled government cor
poration, that maintains or uses an account
with a Reserve Bank.
(e) Foreign items. A Reserve Bank also may
receive and handle certain items payable out
side a Federal Reserve District, as provided in
its operating circulars. The handling of such
items in a state is governed by this subpart,
and the handling of such items outside a state
is governed by the local law.

S E C T I O N 2 1 0 .4 — S e n d in g I t e m s t o
R eserv e B an k s

(a) A sender may send any item to the Re
serve Bank with which it maintains or uses an
account, but that Reserve Bank may permit or
require the sender to send direct to another
Reserve Bank an item payable within the oth
er Reserve Bank’s District.

§210.5

(2) warrants to each Reserve Bank han
dling the item that (i) the sender has good
title to the item or is authorized to obtain
payment on behalf of one who has good ti
tle (whether or not this warranty is evi
denced by the sender’s express guaranty of
prior indorsements on the item); and (ii) to
the extent prescribed by state law applicable
to a Reserve Bank or subsequent collecting
bank handling the item, the item has not
been materially altered; but this subpara
graph (a)(2) does not limit any warranty
by a sender or other prior party arising un
der state law; and
(3) agrees to indemnify each Reserve Bank
for any loss or expense sustained (including
attorneys’ fees and expenses of litigation)
resulting from (i) the sender’s lack of au
thority to make the warranty in paragraph
(a)(1) of this section; (ii) any action taken
by the Reserve Bank within the scope of its
authority in handling the item; or (iii) any
warranty made by the Reserve Bank under
section 210.6(b) of this subpart.

(b) Recovery by Reserve Bank. If an action or
proceeding is brought against (or if defense is
tendered to) a Reserve Bank that has handled
an item, based on—
(b) With respect to an item sent direct, the
(1) the alleged failure of the sender to have
relationships and the rights and liabilities be
the authority to make the warranty and
tween the sender, the Reserve Bank of its Dis
agreement in subparagraph (a)(1) of this
trict, and the Reserve Bank to which the item
section;
is sent are the same as if the sender had sent
(2) any action by the Reserve Bank within
the item to the Reserve Bank of its District
the scope of its authority in handling the
and that Reserve Bank had sent the item to
item; or
the other Reserve Bank.
(3) any warranty made by the Reserve
Bank
under section 210.6(b) of this sub
(c) The Reserve Banks shall receive cash
part,
items and other checks at par.
the Reserve Bank may, upon the entry of a
final judgment or decree, recover from the
sender the amount of attorneys’ fees and other
S E C T I O N 2 1 0 . 5 — S e n d e r ’s A g r e e m e n t ;
expenses
of litigation incurred, as well as any
R eco v ery b y R eserve B an k
amount the Reserve Bank is required to pay
(a) Sender's agreement. By sending an item under the judgment or decree, together with
interest thereon.
to a Reserve Bank, the sender—
(1) authorizes the receiving Reserve Bank
(and any other Reserve Bank or collecting (c) Methods of recovery. The Reserve Bank
bank to which the item is sent) to handle may recover the amount stated in paragraph
the item subject to this subpart and to the (b) of this section by charging any account on
Reserve Banks’ operating circulars, and its books that is maintained or used by the
warrants its authority to give this sender (or if the sender is another Reserve
authorization;
Bank, by entering a charge against the other
3

§ 210.5

Reserve Bank through the Interdistrict Settle
ment Fund), if—
(1) the Reserve Bank made seasonable
written demand on the sender to assume de
fense of the action or proceeding; and
(2) the sender has not made any other ar
rangement for payment that is acceptable to
the Reserve Bank.
The Reserve Bank is not responsible for de
fending the action or proceeding before using
this method of recovery. A Reserve Bank that
has been charged through the Interdistrict
Settlement Fund may recover from its sender
in the manner and under the circumstances
set forth in this paragraph. A Reserve Bank’s
failure to avail itself of the remedy provided in
this paragraph does not prejudice its enforce
ment in any other manner of the indemnity
agreement referred to in subparagraph (a) (3)
of this section.

S E C T I O N 2 1 0 .6 — S t a t u s , W a r r a n t i e s ,
a n d L ia b ility o f R e s e r v e B a n k *

(a)(1) Status and liability. A Reserve Bank
shall act only as agent or subagent of the
owner with respect to an item. This agency
terminates not later than the time the Re
serve Bank receives payment for the item in
actually and finally collected funds and
makes the proceeds available for use by the
sender. A Reserve Bank may be liable to
the owner, to the sender, to a prior collect
ing bank, or to the depositary bank’s cus
tomer with respect to a check as defined in
12 CFR 229.2(k). A Reserve Bank shall
not have or assume any liability with re
spect to an item or its proceeds except for
the Reserve Bank’s own lack of good faith
or failure to exercise ordinary care except as
provided in paragraph (b) of this section
and except as provided in subpart C of part
229.
* Effective January 1, 1990, a new paragraph (c ) will be
added:
(c) Tim e f o r com m encing action against R eserve Bank.
A claim against a Reserve Bank for lack o f good faith or
failure to exercise ordinary care shall be barred unless
the action on the claim is commenced within two years
after the claim accrues. A claim accrues on the date
when a Reserve Bank’s alleged failure to exercise ordi
nary care or to act in good faith first results in damages
to the claimant.

Regulation J

(2) Reliance on routing designation appear
ing on item. A Reserve Bank may present
or send an item based on the routing num
ber or other designation of a paying bank or
nonbank payor appearing in any form on
the item when the Reserve Bank receives it.
A Reserve Bank shall not be responsible for
any delay resulting from its acting on any
designation, whether inscribed by magnetic
ink or by other means, and whether or not
the designation acted on is consistent with
any other designation appearing on the
item.
(b) Warranties and liability. By presenting or
sending an item, a Reserve Bank warrants to a
subsequent collecting bank and to the paying
bank and any other payor—
(1) that the Reserve Bank has good title to
the item (or is authorized to obtain pay
ment on behalf of one who either (i) has
good title or (ii) is authorized to obtain
payment on behalf of one who has good ti
tle), whether or not this warranty is evi
denced by the Reserve Bank’s express guar
anty of prior indorsements on the item; and
(2) that the item has not been materially
altered to the extent prescribed by state law
applicable to a Reserve Bank or subsequent
collecting bank holding the item.
The Reserve Bank shall not have or assume
any other liability to the paying bank or other
payor, except for the Reserve Bank’s own lack
of good faith or failure to exercise ordinary
care.

S E C T I O N 2 1 0 .7 — P r e s e n t i n g I t e m s f o r
P aym ent

(a) Presenting or sending. As provided under
state law or as otherwise permitted by this
section—
(1) a Reserve Bank or a subsequent col
lecting bank may present an item for pay
ment or send the item for presentment and
payment; and
(2) a Reserve Bank may send an item to a
subsequent collecting bank with authority
to present it for payment or to send it for
presentment and payment.

§ 210.9

Regulation J

(b) Place of presentment. A Reserve Bank or
subsequent collecting bank may present an
item—
( 1) at a place requested by the paying
bank;
(2) In the case of a check as defined in 12
CFR 229.2(k), in accordance with 12 CFR
229.36;
(3) at a place requested by the nonbank
payor, if the item is payable by a nonbank
payor other than through or at a paying
bank;
(4) under a special collection agreement
consistent with this subpart; or
(5) through a clearinghouse and subject to
its rules and practices.
(c) Presenting or sending direct. A Reserve
Bank or subsequent collecting bank may, with
respect to an item payable in the Reserve
Bank’s District—
( 1 ) present or send the item direct to the
paying bank, or to a place requested by the
paying bank; or
( 2 ) if the item is payable by a nonbank
payor other than through a paying bank,
present it direct to the nonbank payor. Doc
uments, securities, or other papers accom
panying a noncash item shall not be deliv
ered to the nonbank payor before the item
is paid unless the sender specifically autho
rizes delivery.
(d) Item payable in another District. A Re
serve Bank receiving an item payable in an
other District ordinarily sends the item to the
Reserve Bank of the other District, but with
the agreement of the other Reserve Bank, may
present or send the item as if it were payable
in its own District.

SECTION 210.8—Presenting Noncash
Items for Acceptance
A Reserve Bank or a subsequent collecting
bank may, if instructed by the sender, present
a noncash item for acceptance in any manner
authorized by law if—
( 1 ) the item provides that it must be pre
sented for acceptance;
( 2 ) the item is payable elsewhere than at

the residence or place of business of the
payor; or
(3)
the date of payment of the item de
pends on presentment for acceptance.
Documents accompanying a noncash item
shall not be delivered to the payor upon ac
ceptance of the item unless the sender specifi
cally authorizes delivery. A Reserve Bank
shall not have or assume any other obligation
to present or to send for presentment for ac
ceptance any noncash item.

SECTION 210.9—Payment
(a) Cash items. (1) A paying bank becomes
accountable for the amount of a cash item
received directly or indirectly from a Re
serve Bank, at the close of the paying
bank’s banking day on which it receives2
the item if it retains the item after the close
of that banking day, unless, prior to that
time, it pays for the item by—
(i) debit to an account on the Reserve
Bank’s books;
(ii) cash; or
(iii) in the discretion of the Reserve
Bank, any other form of payment.
(2) The proceeds of any payment shall be
available to the Reserve Bank by the close
of the Reserve Bank’s banking day on the
banking day of receipt of the item by the
paying bank. If the banking day of receipt is
not a banking day for the Reserve Bank,
payment shall be made on the next day that
is a banking day for the Reserve Bank by
the close of the Reserve Bank’s banking
day. A paying bank that closes voluntarily
on a day that is a banking day for the Re
serve Bank shall either pay on that day by
the close of the Reserve Bank’s banking day
for cash items that the Reserve Bank makes
available to the paying bank on that day, or
compensate the Reserve Bank for the value*(i)
2 A paying bank is deemed to receive a cash item on its
next banking day if it receives the item:
(1) on a day other than a banking day for it; or
(2) on a banking day for it, but
(i) after its regular banking hours;
(ii) after a “cut-off hour” established by it in accord
ance with state law; or
(iii) during afternoon or evening periods when it is
open for limited functions only.

§ 210.9

of the float associated with the items in ac
cordance with procedures provided in its
Reserve Bank’s operating circular; in such
circumstances, the paying bank is not con
sidered to receive the item until its next
banking day.
(b) Noncash items. A Reserve Bank may re
quire the paying or collecting bank to which it
has presented or sent a noncash item to pay
for the item in cash, but the Reserve Bank
may permit payment by a debit to an account
on the Reserve Bank’s books or by any of the
following that is in a form acceptable to the
Reserve Bank: bank draft, transfer of funds or
bank credit, or any other form of payment au
thorized by state law.
(c) Nonbank payor. A Reserve Bank may re
quire a nonbank payor to which it has pre
sented an item to pay for it in cash, but the
Reserve Bank may permit payment in any of
the following that is in a form acceptable to
the Reserve Bank: cashier’s check, certified
check,^or other bank draft or obligation.
(d) Handling of payment. A Reserve Bank
may handle a bank draft or other form of pay
ment it receives in payment of a cash item as a
cash item. A Reserve Bank may handle a
bank draft or other form of payment it re
ceives in payment of a noncash item as either
a cash item or a noncash item.
(e) Liability of Reserve Bank. Except as set
forth in 12 CFR 229.35(b), a Reserve Bank
shall not be liable for the failure of a collecting
bank, paying bank, or nonbank payor to pay
for an item, or for any loss resulting from the
Reserve Bank’s acceptance of any form of
payment other than cash authorized in para
graphs (a), (b), and (c) of this section. A
Reserve Bank that acts in good faith and exer
cises ordinary care shall not be liable for the
nonpayment of, or failure to realize upon, a
bank draft or other form of payment that it
accepts under paragraphs (a), (b), and (c).

SECTION 210.10—Time Schedule and
Availability of Credits for Cash Items
and Returned Checks
(a) Each Reserve Bank shall include in its
6

Regulation J

operating circulars a time schedule for each of
its offices indicating when the amount of any
cash item or returned check received by it (or
sent direct to another Reserve office for the
account of that Reserve Bank) is counted as
reserves for purposes of part 204 of this chap
ter (Regulation D) and becomes available for
use by the sender or paying or returning bank.
The Reserve Bank shall give either immediate
or deferred credit in accordance with its time
schedule to a sender or paying or returning
bank other than a foreign correspondent. A
Reserve Bank ordinarily gives credit to a for
eign correspondent only when the Reserve
Bank receives payment of the item in actually
and finally collected funds, but, in its discre
tion, a Reserve Bank may give immediate or
deferred credit in accordance with its time
schedule.
(b) Notwithstanding its time schedule, a Re
serve Bank may refuse at any time to permit
the use of credit given for any cash item or
returned check, and may defer availability af
ter credit is received by the Reserve Bank for
a period of time that is reasonable under the
circumstances.

SECTION 210.11—Availability of
Proceeds of Noncash Items; Time
Schedule
(a) Availability o f credit. A Reserve Bank
shall give credit to the sender for the proceeds
of a noncash item when it receives payment in
actually and finally collected funds (or advice
from another Reserve Bank of such payment
to it). The amount of the item is counted as
reserve for purposes of part 204 of this chap
ter (Regulation D) and becomes available for
use by the sender when the Reserve Bank re
ceives the payment or advice, except as pro
vided in paragraph (b) of this section.
(b) Time schedule. A Reserve Bank may give
credit for the proceeds of a noncash item sub
ject to payment in actually and finally collect
ed funds in accordance with a time schedule
included in its operating circulars. The time
schedule shall indicate when the proceeds of
the noncash item will be counted as reserve
for purposes of part 204 of this chapter (Reg-

Regulation J

§ 210.12

ulation D) and become available for use by
the sender. A Reserve Bank may, however,
refuse at any time to permit the use of credit
given for a noncash item for which the Re
serve Bank has not yet received payment in
actually and finally collected funds.

Reserve Bank, the paying bank or returning
bank—
(1) Authorizes the receiving Reserve Bank
(and any other Reserve Bank or returning
bank to which the returned check is sent)
to handle the returned check subject to this
subpart and to the Reserve Banks’ operat
(c) Handling o f payment. If a Reserve Bank
ing circulars;
receives, in payment for a noncash item, a
(2) Makes the warranties set forth in 12
bank draft or other form of payment that it
CFR 229.34; and
elects to handle as a noncash item, the Re
(3) Agrees to indemnify each Reserve
serve Bank shall neither count the proceeds as
Bank for any loss or expense (including at
reserve for purposes of part 204 of this chap
torneys’ fees and expenses of litigation) re
ter (Regulation D) nor make the proceeds
sulting from—
available for use until it receives payment in
(i) The paying or returning bank’s lack
actually and finally collected funds.
of authority to give the authorization in
paragraph (c )( 1) of this section;
(ii) Any action taken by a Reserve Bank
within the scope of its authority in han
SECTION 210.12—Return of Cash
dling the returned check; or
Items and Handling of Returned Checks
(iii) Any warranty made by the Reserve
Bank under 12 CFR 229.34.
(a) Return o f cash items. A paying bank that
receives a cash item directly or indirectly from
a Reserve Bank, other than for immediate
(d) Recovery by Reserve Bank. If an action or
payment over the counter, and that pays for
proceeding is brought against (or if defense is
the item as provided in section 210.9(a) of
tendered to) a Reserve Bank that has handled
this subpart, may, before it has finally paid the
a returned check based on—
item, return the item in accordance with sub
(1) The alleged failure of the paying or re
part C of part 229, the Uniform Commercial
turning bank to have the authority to give
Code, and its Reserve Bank’s operating circu
the authorization in paragraph (c )( 1) of
lar. The rules or practices of a clearinghouse
this section;
through which the item was presented, or a
(2) Any action by the Reserve Bank with
special collection agreement under which the
in the scope of its authority in handling the
item was presented, may not extend these re
returned check; or
turn times, but may provide for a shorter re
(3) Any warranty made by the Reserve
turn time.
Bank under 12 CFR 229.34,
(b) Return o f checks not handled by Reserve the Reserve Bank may, upon the entry of a
Banks. A paying bank that receives a check as final judgment or decree, recover from the
defined in 12 CFR 229.2(k), other than di paying bank or returning bank the amount of
rectly or indirectly from a Reserve Bank, and attorneys’ fees and other expenses of litigation
that determines not to pay the check, may incurred, as well as any amount the Reserve
send the returned check to its Reserve Bank in Bank is required to pay under the judgment or
accordance with subpart C of part 229, the decree, together with interest thereon.
Uniform Commercial Code, and its Reserve
Bank’s operating circular. A returning bank
(e) Methods o f recovery. The Reserve Bank
may send a returned check to its Reserve
may recover the amount stated in paragraph
Bank in accordance with subpart C of part
(d) of this section by charging any account on
229, the Uniform Commercial Code, and its
its books that is maintained or used by the
Reserve Bank’s operating circular.
paying or returning bank (or, if the returning
(c) Paying bank’s and returning bank’s bank is another Reserve Bank, by entering a
agreement. By sending a returned check to a charge against the other Reserve Bank
7

§ 210.12
through the Interdistrict Settlement Fund),
if—
(1) The Reserve Bank made seasonable
written demand on the paying or returning
bank to assume defense of the action or pro
ceeding; and
(2) The paying or returning bank has not
made any other arrangement for payment
that is acceptable to the Reserve Bank.
The Reserve Bank is not responsible for de
fending the action or proceeding before using
this method of recovery. A Reserve Bank that
has been charged through the Interdistrict
Settlement Fund may recover from the paying
or returning bank in the manner and under
the circumstances set forth in this paragraph.
A Reserve Bank’s failure to avail itself of the
remedy provided in this paragraph does not
prejudice its enforcement in any other manner
of the indemnity agreement referred to in par
agraph (c)(3) of this section.
(0 Reserve Bank's responsibility. A Reserve
Bank shall handle a returned check, or a no
tice of nonpayment, in accordance with sub
part C of part 229 and its operating circular.
A Reserve Bank may permit or require the
paying or returning bank to send direct to an
other Reserve Bank a returned check with re
spect to which the depositary bank is located
within the other Reserve Bank’s District, in
accordance with section 210.4(b).

Regulation J

from which it was received, shall have any
interest in any reserve balance or other funds
in the Reserve Bank’s possession of the bank
failing to make payment in actually and final
ly collected funds.
(b) Suspension or closing of bank. A Reserve
Bank shall not pay or act on a draft, authori
zation to charge, or other order on a reserve
balance or other funds in its possession after it
receives notice of suspension or closing of the
bank making the payment for that bank’s own
or another’s account.

SECTION 210.14— Extension of Time
Limits
If, because of interruption of communication
facilities, suspension of payments by a bank or
nonbank payor, war, emergency conditions or
other circumstances beyond its control, a
bank (including a Reserve Bank) or nonbank
payor is delayed in acting on an item beyond
applicable time limits, its time for acting is
extended for the time necessary to complete
the action, if it exercises such diligence as the
circumstances require.

(g) Settlement. A subsequent returning bank
or depositary bank shall settle for returned
checks in the same manner as for cash items
presented for payment.

SECTION 210.15—Direct Presentment
of Certain Warrants

SECTION 210.13—Unpaid Items

If a Reserve Bank elects to present direct to
the payor a bill, note, or warrant that is issued
and payable by a state or a political subdivi
sion and that is a cash item not payable or
collectible through a bank—

(a) Right of charge-back. If a Reserve Bank (a) sections 210.9, 210.12, and 210.13 and
does not receive payment in actually and final the operating circulars of the Reserve Banks
ly collected funds for an item, the Reserve apply to the payor as if it were a paying bank;
Bank shall recover by charge-back or other
(b) section 210.14 applies to the payor as if it
wise the amount of the item from the sender,
were a bank; and
paying bank, or returning bank from which it
was received, whether or not the item itself (c) under section 210.9 each day on which
can be sent back. In the event of recovery, the payor is open for the regular conduct of its
neither the owner or holder of the item, nor affairs or the accommodation of the public is
the sender, paying bank, or returning bank considered a banking day.

Regulation J

SUBPART B—WIRE TRANSFERS
OF FUNDS
SECTION 210.25—Authority, Purpose,
and Scope
The Board of Governors of the Federal Re
serve System (“Board”) has issued this sub
part pursuant to the Federal Reserve Act,
section 13 (12 USC 342), paragraph (f) of
section 19 (12 USC 464), paragraph 14 of
section 16 (12 USC 248(o)), paragraphs (i)
and (j) of section 11 (12 USC 248(i) and
(j)), and other laws. This subpart governs the
handling by Federal Reserve Banks (“Reserve
Banks”) of transfer items and transfer
requests. Its purpose is to provide rules for the
wire transfer of funds.

SECTION 210.26—Definitions

§210.27

(f) “Transferee” means a member bank, a
Reserve Bank, or other institution that (1)
maintains or, if authorized by the Reserve
Bank, uses an account at a Reserve Bank and
( 2 ) is designated in a transfer item or request
to receive the amount of the item or request.
(g) “Transferor” means a member bank, a
Reserve Bank, or other institution that main
tains or uses an account at a Reserve Bank
and that is authorized by that Reserve Bank
to send a transfer item or request to it.
(h) “Transferor’s account” or “transferee’s
account” means the account at its Reserve
Bank maintained or used by the transferor or
transferee, respectively.
(i) “Transferor’s Reserve Bank” or “trans
feree’s Reserve Bank” means the Reserve of
fice at which the transferor or transferee, re
spectively, maintains or uses an account.

As used in this subpart, unless the context
otherwise requires—
(a) “Beneficiary” means a person or organi
zation, other than the transferee, designated
in a transfer item or request to receive the
amount of the item or request from the
transferee.
(b) “Interoffice transaction” means a trans
fer between a transferor and transferee that do
not maintain or use accounts at the same of
fice of a Reserve Bank.
(c) “Item” means a writing evidencing a re
quest for the payment of money, that is han
dled under this subpart. “Item” does not in
clude a “item” as defined in section 210.2 that
is handled under subpart A.
(d) “Transfer item” means an item: (1) sent
by a transferor (other than a Reserve Bank)
to a Reserve Bank for debit to the transferor’s
account at the Reserve Bank and for credit to
a transferee; (2) sent by a Reserve Bank to
another Reserve Bank for credit to the latter
or to any other transferee; or (3) issued by a
Reserve Bank at the request of a transferor for
credit to a transferee.
(e) “Transfer request” or “request” means a
request by telephone that a Reserve Bank is
sue a transfer item.

SECTION 210.27—General Provisions
(a) General. Each Reserve Bank shall receive
and handle transfer items, and shall itself is
sue transfer items, in accordance with this
subpart. Each Reserve Bank shall issue an op
erating circular governing the details of its
funds transfer operations and other matters
deemed appropriate by the Reserve Bank. The
circulars may, among other things: set mini
mum and maximum dollar amounts; specify
format and authentication requirements for
transfer items and requests; and impose rea
sonable funds transfer charges.
(b) Binding effect. This subpart and the oper
ating circulars of the Reserve Banks are bind
ing on transferors, transferees, beneficiaries,
and other parties interested in an item.
(c) Government transferors and transferees.
Except as otherwise provided by statutes of
the United States, or regulations issued or ar
rangements made thereunder, this subpart
and the operating circulars of the Reserve
Banks apply to the following when acting as a
transferor or transferee: a department, agency,
instrumentality, independent establishment,
or office of the United States, or a wholly
owned or controlled government corporation,
9

§ 210.27

that maintains or uses an account with a Re
serve Bank.

SECTION 210.28—Media for Transfer
Items and Requests
(a) Transfer items. A transferor may issue
and send a transfer item in any of the follow
ing media, if specified in the operating circular
of the transferor’s Reserve Bank:
( 1 ) a letter, memorandum, or similar
writing;
(2) a telegram (including TWX, TELEX,
or similar form of communication); and
(3) any form of communication, other
than voice, registered on (or in form suit
able for being registered on) magnetic tape,
disc, or other medium designed to contain
in durable form conventional signals used
for electronic communication of messages.
(b) Transfer requests. A transferor may make
transfer requests only under special arrange
ments with its Reserve Bank. The Reserve
Bank may record these telephone messages.

SECTION 210.29—Transferor’s
Agreement
A transferor, by sending a transfer item or
making a transfer request to its Reserve Bank,
authorizes—
(a) its Reserve Bank to debit the amount to
the transferor’s account, and to handle the
transfer item or request in accordance with
this subpart and the operating circulars of the
Reserve Banks; and
(b) the transferee’s Reserve Bank to handle a
matching transfer item (matching as to
amount, transferee, and beneficiary, if any) in
accordance with this subpart and the operat
ing circulars of the transferee’s Reserve Bank.

SECTION 210.30—Transferee’s
Agreement
(a) A transferee (other than a Reserve
10

Regulation J

Bank), by maintaining or using an account at
a Reserve Bank, authorizes its Reserve Bank
to credit the amount of the transfer item to its
account.
(b) A transferee (other than a Reserve
Bank) that receives a transfer item, or advice
of credit of a transfer item, designating a bene
ficiary, agrees—
( 1 ) to credit promptly the beneficiary’s ac
count or otherwise make the amount avail
able to the beneficiary; or
(2) to notify promptly its Reserve Bank if
it is unable to do so because of circum
stances beyond its control.

SECTION 210.31—Sending Transfer
Items and Requests
(a) A transferor (other than a Reserve
Bank) may send a transfer item to, or make a
transfer request of, its Reserve Bank. A Re
serve Bank may refuse to act on, or may im
pose conditions to its acting on, a transfer
item or request if it has reason to believe that
the balance in the transferor’s account is not
sufficient to cover the item or request. The
transferor shall arrange to have in its account,
at the end of its Reserve Bank’s banking day,
a balance of actually and finally collected
funds sufficient to cover the amounts of trans
fer items debited to the account during that
day. In addition to other remedies, the Re
serve Bank has a security interest in the trans
feror’s assets in the possession of, or held for
the account of, the Reserve Bank if—
( 1 ) the balance in the transferor’s account
at the end of the Reserve Bank’s banking
day is not sufficient to cover the amounts
debited to the account during that day; or
( 2 ) the transferor suspends payment or is
closed at any time during the Reserve
Bank’s banking day, and does not have a
balance sufficient to cover the amounts deb
ited to its account.
(b) A Reserve Bank may send a transfer item
to, or make a transfer request of, another Re
serve Bank.

Regulation J

§210.35

SECTION 210.32—Handling Transfer
Items and Requests

transaction in these circumstances is also dis
cretionary with the transferee’s Reserve Bank.

(a) Intraoffice transactions. If the transferor
and transferee maintain or use accounts at the
same Reserve office, that office shall act on a
transfer item by debiting and crediting their
accounts. The Reserve office shall act on a
transfer request by issuing a transfer item, and
debiting and crediting the accounts.

(d) As-of adjustments. If a Reserve Bank fails
to credit to the transferee’s account on the day
requested the amount of a transfer item or re
quest received by the Reserve Bank before the
time shown in its schedule, the Reserve Bank
shall, unless otherwise instructed, complete
the transfer on its next banking day and make
adjustments for reserve accounting purposes
as of the day the transfer was to have been
made.

(b) Interoffice transactions. The transferor’s
Reserve Bank shall handle an interoffice
transaction by debiting the transferor’s ac
count and, acting as a transferor, issuing and
sending to the transferee’s Reserve Bank a
matching transfer item (matching as to
amount, transferee, and beneficiary, if any).
The transferee’s Reserve Bank shall transfer
funds to the transferee by debiting the account
of the transferor’s Reserve Bank, and credit
ing the transferee’s account.
(c) Notice of delay. If a Reserve Bank learns
that it is unable to effectuate a transfer of
funds on a timely basis for any reason, it shall
notify the transferor of the delay within a rea
sonable time.

SECTION 210.34—Advices of Credit
and Debit
(a) Advice o f credit. The transferee’s Reserve
Bank shall give advice of credit to the trans
feree for an executed transfer of funds.
(b) Advice of debit. After receiving a transfer
item or request, the transferor’s Reserve Bank
shall send an advice of debit to the transferor.
A transferor is deemed to approve the accura
cy of an advice of debit unless it sends to its
Reserve Bank written objection within 10 cal
endar days of receiving the advice of debit.

SECTION 210.33—Time Limits
(a) Time schedule. Each Reserve Bank shall
include in its operating circular a schedule
showing the hours during which it handles
transfer items and requests.
(b) Acting seasonably. A Reserve Bank acts
seasonably if it takes proper action on the day
it receives a transfer item or request. Taking
proper action within a reasonably longer time
may be seasonable but the Reserve Bank has
the burden of so establishing. No Reserve
Bank shall represent that it will complete a
transfer of funds on the day requested.
(c) Transfers after closing hour. A Reserve
Bank is not required to act on the day it re
ceives an item or request if it receives the item
or request after the time shown in its sched
ule. In emergency or other unusual circum
stances, a Reserve Bank may handle a transfer
item or request after the time shown in its
schedule. The completion of an interoffice

SECTION 210.35—Revocation of
Transfer Items and Requests
(a) Request for revocation. A Reserve Bank
may cease acting on a transfer item or request
if it receives from the transferor a request for
revocation in time to give the Reserve Bank a
reasonable opportunity to comply. If the re
quest is received too late, the Reserve Bank
may, on request from the transferor, ask the
transferee to return the funds. In an interoffice
transaction, the Reserve Bank may ask the
transferee’s Reserve Bank to ask the transfer
ee to return the funds.
(b) Erroneous transfer. In an erroneous or ir
regular transfer of funds, a Reserve Bank
may, on its own initiative or at the request of
another Reserve Bank, ask the transferee to
return funds previously transferred.
11

§210.36

SECTION 210.36—Final Payment; Use
of Funds
(a) Final payment. A transfer item is finally
paid when the transferee’s Reserve Bank
sends the transfer item or sends or telephones
the advice of credit for the item to the trans
feree, whichever occurs first.
(b) Right to use funds. Credit given by a Re
serve Bank for a transfer of funds becomes
available for use when the transfer item is fi
nally paid, subject to the Reserve Bank’s right
to apply the transferred funds to an obligation
owed to it by the transferee.

SECTION 210.37—Timeliness of Action
If, because of circumstances beyond its con
trol, a Reserve Bank is delayed beyond the
time limits provided in this subpart, in its op
erating circular, or by law in acting on a
transfer item or request, the time for acting is
extended for the time necessary to complete
the action, if the Reserve Bank exercises such
diligence as the circumstances require.

SECTION 210.38—Reserve Bank
Liability
(a) Limitations on liability. A Reserve Bank
shall not have or assume any responsibility to
a transferee, beneficiary, or other party, ex
cept its immediate transferor. A Reserve Bank
shall not be liable for the insolvency, neglect,
misconduct, mistake, or default of another

Regulation J

bank or person, including a transferor, except
as provided in this section. A Reserve Bank
shall not have or assume any liability except
for its own or another Reserve Bank’s lack of
good faith or failure to exercise ordinary care.
(b) Damages. A Reserve Bank is liable to its
immediate transferor for a failure to credit the
amount of a transfer item or request to the
transferee’s account caused by a Reserve
Bank’s failure to exercise ordinary care or to
act in good faith. A Reserve Bank’s liability
for such a failure to credit is limited to dam
ages that are attributable directly and immedi
ately to the failure to credit, but does not in
clude damages that are attributable to the
consequences of the failure to credit, even if
such consequences were foreseeable at the
time of such failure.*
(c) Right to indemnity. The transferee’s Re
serve Bank shall indemnify the transferor’s
Reserve Bank for any loss or expense sus
tained (including attorneys’ fees and expenses
of litigation) as a result of the failure of the
transferee’s Reserve Bank to exercise ordinary
care or to act in good faith in an interoffice
transaction.
* Effective January 1, 1990, paragraph (b) will be redes
ignated subparagraph (b)(1), and a new subparagraph
(b) (2) will be added:Statutory Provisions
(2) A claim against a Reserve Bank for failure to exer
cise ordinary care or to act in good faith shall be barred
unless the action on the claim is commenced within two
years after the claim accrues. A claim accrues on the
date a Reserve Bank’s alleged failure to exercise ordinary
care or to act in good faith first results in damages to the
claimant.

Statutory Provisions

FEDERAL RESERVE ACT

otherwise; but no such charges shall be made
against the Federal reserve banks.
[12 USC 342.]

SECTION 13—Powers of Federal
Reserve Banks
Any Federal reserve bank may receive from
any of its member banks or other depository
institutions, and from the United States, de
posits of current funds in lawful money, na
tional-bank notes, Federal reserve notes, or
checks, and drafts, payable upon presentation,
or other items and also, for collection, matur
ing notes and bills; or solely for purposes of
exchange or of collection, may receive from
other Federal reserve banks deposits of cur
rent funds in lawful money, national-bank
notes, or checks upon other Federal reserve
banks, and checks and drafts, payable upon
presentation within its district, or other items,
and maturing notes and bills payable within
its district; or, solely for the purposes of ex
change or of collection, may receive from any
nonmember bank or trust company or other
depository institution deposits of current
funds in lawful money, national-bank notes,
Federal reserve notes, checks and drafts pay
able upon presentation or other items, or
maturing notes and bills: Provided, Such non
member bank or trust company or other de
pository institution maintains with the Feder
al reserve bank of its district a balance in such
amount as the Board determines taking into
account items in transit, services provided by
the Federal Reserve Bank, and other factors
as the Board may deem appropriate; Provided
further, That nothing in this or any other sec
tion of this Act shall be construed as prohibit
ing a member or nonmember bank or other
depository institution from making reasonable
charges, to be determined and regulated by
the Board of Governors of the Federal Re
serve System, but in no case to exceed 10 cents
per $100 or fraction thereof, based on the to
tal of checks and drafts presented at any one
time, for collection or payment of checks and
drafts and remission therefor by exchange or

sjc

jj:

sjs

SECTION 16—Note Issues
*

Every Federal reserve bank shall receive on
deposit at par from depository institutions or
from Federal Reserve banks checks and other
items, including negotiable orders of with
drawal and share drafts and drafts drawn
upon any of its depositors, and when remitted
by a Federal reserve bank, checks and other
items, including negotiable orders of with
drawal and share drafts and drafts drawn by
any depositor in any other Federal reserve
bank or depository institution upon funds to
the credit of said depositor in said reserve
bank or depository institution. Nothing herein
contained shall be construed as prohibiting a
depository institution from charging its actual
expense incurred in collecting and remitting
funds, or for exchange sold to its patrons. The
Board of Governors of the Federal Reserve
System shall, by rule, fix the charges to be
collected by the member banks from its pa
trons whose checks are cleared through the
Federal reserve bank and the charge which
may be imposed for the service of clearing or
collection rendered by the Federal reserve
bank.
[12 USC 360.]

The Board of Governors of the Federal Re
serve System shall make and promulgate from
time to time regulations governing the trans
fer of funds and charges therefor among Fed
eral reserve banks and their branches, and
may at its discretion exercise the functions of
a clearing house for such Federal reserve
banks, or may designate a Federal reserve
bank to exercise such functions, and may also
require each such bank to exercise the func13

Regulation J

Statutory Provisions

more responsible parties, and, with the con
sent of the Board of Governors of the Federal
Reserve System, to open and maintain bank
[12 USC 248(o).]
ing accounts for such foreign correspondents
or agencies, or for foreign banks or bankers,
or for foreign states as defined in section
SECTION 11—Powers of Board of
25(b) of this Act. Whenever any such ac
Governors of Federal Reserve System
count has been opened or agency or corre
*
*
*
*
*
spondent has been appointed by a Federal re
serve bank, with the consent of or under the
The Board of Governors of the Federal Re order and direction of the Board of Governors
serve System shall be authorized and of the Federal Reserve System, any other Fed
empowered:
eral reserve bank may, with the consent and
*
*
*
*
*
approval of the Board of Governors of the
Federal Reserve System, be permitted to carry
(i) To require bonds of Federal reserve on or conduct, through the Federal reserve
agents, to make regulations for the safeguard bank opening such account or appointing
ing of all collateral, bonds, Federal reserve such agency or correspondent, any transac
notes, money or property of any kind deposit tion authorized by this section under rules
ed in the hands of such agents, and said board and regulations to be prescribed by the board.
shall perform the duties, functions, or services
specified in this Act, and make all rules and [12 USC 358.]
regulations necessary to enable said board ef
*
*
*
*
*
fectively to perform the same.

tions of a clearing house for depository
institutions.

[12 USC 248(i).]

SECTION 25(b)—Jurisdiction of Suits
SECTION 14— Open Market Operations
*

For the purposes of this section, * * * (2)
the term “foreign state” includes any foreign
government, or any department, district,
province, county, possession, or other similar
(e) To establish accounts with other Federal governmental organization or subdivision of a
reserve banks for exchange purposes and, with foreign government, and any agency or instru
the consent or upon the order and direction of mentality of any such foreign government or
the Board of Governors of the Federal Re of any such organization or subdivision; (3)
serve System and under regulations to be pre the term “central bank” includes any foreign
scribed by said board, to open and maintain bank or banker authorized to perform any one
accounts in foreign countries, appoint corre or more of the functions of a central bank;
spondents, and establish agencies in such * * *
countries wheresoever it may be deemed best
[12 USC 632.]
for the purpose of purchasing, selling, and col
lecting bills of exchange, and to buy and sell,
with or without its indorsement, through such
correspondents or agencies, bills of exchange
(or acceptances) arising out of actual com
EXPEDITED FUNDS
mercial transactions which have not more
AVAILABILITY ACT
than ninety days to run, exclusive of days of
grace, and which bear the signature of two or See 9-675.
Every Federal reserve bank shall have power:
*
*
*
*
*

Regulation J

BRETTON WOODS AGREEMENTS
ACT
SECTION 6—Federal Reserve Banks as
Depositories
Any Federal Reserve bank which is requested
to do so by the Fund or the Bank shall act as
its depository or as its fiscal agent, and the
Board of Governors of the Federal Reserve
System shall supervise and direct the carrying
out of these functions by the Federal Reserve
banks.
[22 USC 286d.]

INTER-AMERICAN
DEVELOPMENT BANK ACT
SECTION 6—Federal Reserve Banks as
Depositories
Any Federal Reserve bank which is requested
to do so by the Bank shall act as its depository
or as its fiscal agent and the Board of Gover
nors of the Federal Reserve System shall su
pervise and direct the carrying out of these
functions by the Federal Reserve banks.
[22 USC 283d.]

Statutory Provisions

to do so by the Association shall act as its
depository or as its fiscal agent, and the Board
of Governors of the Federal Reserve System
shall supervise and direct the carrying out of
these functions by the Federal Reserve banks.
[22 USC 284d.]

INTERNATIONAL FINANCE
CORPORATION ACT
SECTION 6—Federal Reserve Banks as
Depositories
Any Federal Reserve bank which is requested
to do so by the Corporation shall act as its
depository or as its fiscal agent, and the Board
of Governors of the Federal Reserve System
shall supervise and direct the carrying out of
these functions by the Federal Reserve banks.
[22 USC 282d.]

ASIAN DEVELOPMENT BANK ACT
SECTION 6—Federal Reserve Banks as
Depositories

SECTION 6—Federal Reserve Banks as
Depositories

Any Federal Reserve bank which is requested
to do so by the Bank shall act as its depository
or as its fiscal agent, and the Board of Gover
nors of the Federal Reserve System shall su
pervise and direct the carrying out of these
functions by the Federal Reserve banks.

Any Federal Reserve bank which is requested

[22 USC 285d.]

INTERNATIONAL DEVELOPMENT
ASSOCIATION ACT

Full text of Federal Reserve Bank of New York Circulars : Regulations CC and J

FRASER