Agencies give final OK to check holds adjustments, but delay effective date to next year

The amount of funds banks and others must make available to their customers from checks deposited, as well as a revised threshold for determining whether an account has been repeatedly overdrawn, is set in amendments to federal rules affecting funds availability released Monday but that don’t take effect until July 1, 2020.

The Federal Reserve and the Consumer Financial Protection Bureau (CFPB) jointly published the amendments to Regulation CC (funds availability), which implements the inflation-adjustment requirement of the Expedited Funds Availability (EFA) Act under amendments by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Under that 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 proposed 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).

However, the agencies said the adjusted amounts won’t take effect until next year. “To help ensure that institutions have sufficient time to implement the adjustments, the compliance date for the adjusted amounts is July 1, 2020,” the Fed and CFPB said.

Under the amendments, the inflation measurement period for next year’s adjustment begins in July 2011 and ends in July 2018. For dollar amount adjustments that are effective on July 1, 2025, the inflation measurement period begins in July 2018 and ends in July 2023.

For dollar amount adjustments that are effective on July 1 of every fifth year after 2025, the inflation measurement period begins in July of every fifth year after 2018 and ends in July of every fifth year after 2023, the agencies stated.

The final amendments announced Monday by the Fed and CFPB also incorporate provisions from last year’s regulatory relief statute (the Economic Growth, Regulatory Relief, and Consumer Protection Act [EGRRCPA, S. 2155]) amending the EFA Act, extending coverage to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam, and making certain other technical amendments.

Agencies issue final amendments to Regulation CC regarding funds availability

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