In October 2018, the Bureau of Consumer Financial Protection (Bureau) and the Federal Reserve Board jointly proposed amendments to Regulation CC, which implements the Expedited Funds Availability Act (EFA Act), to implement the statutory requirement to adjust the dollar amounts under the EFA Act for inflation. They also proposed to apply the funds availability, payment of interest, and disclosure amendments to the EFA Act made in the Economic Growth, Regulatory Relief, and Consumer Protection Act to American Samoa, the Commonwealth of the Northern Marina Islands, and Guam.
After considering the submitted responses by commenters to the proposals, the Final Rule adopted the following notable amendments to Regulation CC:
- The dollar amounts as incorporated in Regulation CC will be effective July 1, 2020 and will carry forward the one-year interim between the publication of the first set of adjustments and the adjustments’ effective dates. As a result, future adjustments will occur on July 1, 2025 (publication is anticipated to occur in the first half of 2024) and July 1 every fifth year after 2025 (publication is anticipated to occur in the first half of the prior year). This effective date differs from that of which was proposed in October; the anticipated effective date was April 1, 2020.
- The minimum amount of deposited funds that financial institutions must make available for withdrawal by opening of business on the next day for certain deposits will be $225. The minimum is currently $200.
- The amount a bank must make available when using the EFA Act’s permissive adjustment to the funds availability rules for withdrawals by cash or other means will be $450. The cash withdrawal amount is currently $400.
- The amount of funds deposited by certain checks in a new account that are subject to next-day availability will be $5,525. The new account amount is currently $5,000.
- The threshold for using an exception to the funds availability schedules if the aggregate amount of checks on any one banking day exceed the threshold amount will be $5,525. The large-deposit threshold is currently $5,000.
- The threshold for determining whether an account has been repeatedly overdrawn will be $5,525. The repeatedly overdrawn threshold is currently $5,000.
- The civil liability amount for failing to comply with the EFA Act’s requirements will be $100, $1,100, and $552,500. The civil liability amounts are currently “not less than $100 nor greater than $1,000” for an individual action and “not more than $500,000 or 1 percent of the net worth” of a depository institution for a class action.
- The inflation adjustment will be measured based on the underlying inflation from July 2011 to July 2018 using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The second set of inflation adjustments will be based on the underlying inflation from July 2018 to July 2023, and so forth. This was the methodology proposed in October.
- Any dollar amount adjustment will be calculated across an inflation measurement period by the aggregate percentage change in the CPI-W, including positive and negative percentage changes. This was the calculation proposed in October.
- Adjusted dollar amounts will be rounded to the nearest multiple of $25. This was the adjustment proposed in October.
For more information regarding the proposals, see the related post.