Regulation CC
Regulation CC is one of the banking regulations set forth by the Federal Reserve. Regulation CC implements the Expedited Funds Availability Act (EFAA) of 1987 and the Check Clearing for the 21st Century Act (Check 21). These laws set specific requirements for the timely availability of deposits that are made by customers into transaction accounts. These laws addressed the lengths of hold times banks previously placed on checks deposited by customers.
Definition: Regulation CC is a banking regulation established by the Federal Reserve System in the United States. It implements the Expedited Funds Availability Act (EFAA) of 1987 and the Check Clearing for the 21st Century Act (Check 21), ensuring the timely availability of deposits made into transaction accounts.
Origin: The origin of Regulation CC dates back to 1987 when the U.S. Congress passed the Expedited Funds Availability Act (EFAA) to address the issue of excessive hold times imposed by banks on deposited checks. In 2003, the Check Clearing for the 21st Century Act (Check 21) further refined this regulation by allowing electronic check processing, speeding up the clearing process.
Categories and Characteristics: Regulation CC is primarily divided into two parts: EFAA and Check 21.
- EFAA: Mandates that banks must make deposited funds available within a specific timeframe, typically 1-5 business days, depending on the type and amount of the deposit.
- Check 21: Allows banks to use electronic images instead of paper checks for clearing, significantly speeding up the check processing time and reducing hold periods.
Specific Cases:
- Case 1: Customer A deposits a $1,000 check on Monday. According to EFAA, the bank must make these funds available by Wednesday. If the bank fails to do so, Customer A has the right to file a complaint and seek compensation.
- Case 2: Customer B deposits a check using mobile banking. The bank processes the check electronically through Check 21, typically making the funds available the same day or the next day, greatly enhancing liquidity.
Common Questions:
- Question 1: Why does it sometimes take several days for my deposit to become available?
Answer: The availability of deposits depends on the type and amount of the deposit. Banks need time to verify the authenticity and source of the funds. - Question 2: What should I do if the bank fails to make my deposit available within the specified time?
Answer: You can file a complaint with the bank and seek compensation under Regulation CC.
