A statutory requirement for inflation adjustments every five years of the funds-availability amounts under the Electronic Funds Availability (EFA) Act would be implemented for the first time under a proposal issued Tuesday by regulators.
Issued jointly by the Federal Reserve Board and the Bureau of Consumer Financial Protection (BCFP, formerly known as CFPB), the proposed amendments to the act’s implementing regulation – Regulation CC – would apply in circumstances ranging from next-business-day withdrawal of certain check deposits to setting the threshold amount for determining whether an account has been repeatedly withdrawn, the agencies said.
To allow time for institutions to prepare, the agencies propose a compliance date at least 12 months after publication of the final rule in the Federal Register.
The inflation-adjustment requirement of the EFA Act was added under amendments by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Under this provision, the funds-availability dollar amounts must be inflation-adjusted every five years, beginning after Dec. 31, 2011, by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For the adjustment methodology, the agencies propose an adjustment every five years by the aggregate annual percentage increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI- W), rounded to the nearest multiple of $25 (the multiple amount provided by law).
The agencies anticipate publishing the first set of adjustments as a final rule in the first quarter of 2019, with an effective date of April 1, 2020. The second set of adjustments would be published in the first quarter of 2024, with an effective date of April 1, 2025.
The Agencies propose that each subsequent set of adjustments have an effective date of April 1 of every fifth year after 2025.
In addition to the inflation adjustment, the agencies propose to implement in Regulation CC, those EFA Act amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155), which include extending coverage of the EFA Act to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam.
The agencies, through this notice, also are providing an additional opportunity for public comment on certain funds-availability amendments in subpart B of Regulation CC that the Fed Board published in 2011 regarding funds availability schedule provisions and associated definitions. “In taking this step, the agencies have not made a decision on whether to make any aspects of the 2011 proposal final. Reopening the comment period will provide the agencies with up-to-date public views to consider,” the agencies said.
The proposal will be out for comment for 60 days following its publication in the Federal Register.