COMMENTARY

2. In addition, the proceeds of Treasury checks and U.S. Postal Service money orders not subject to next-day (or second-day) availability under section 229.10(c), checks drawn on Federal Reserve Banks and Federal Home Loan Banks, checks drawn by a state or unit of general local government, cashier’s checks, certified checks, and teller’s checks not subject to next-day (or second-day) availability under section 229.10(c) and payable in the same check-processing region as the depositary bank, must be made available for withdrawal by the second business day following deposit.

3. 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 deposited on a Monday generally must be made available for withdrawal on Wednesday.

b. Reduced schedules are provided for certain nonlocal checks where significant improvements can be made to the EFA Act’s schedules due to transportation arrangements or proximity between the check-processing regions of the depositary bank and the paying bank, allowing for faster collection and return. Appendix B sets forth the specific reduction of schedules applicable to banks located in certain check-processing regions.

c. 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 example, a nonlocal credit-union payable-through share draft may be subject to a reduction in schedules if the routing number of the payable-through bank that 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.

2. The EFA Act recognizes that the $450 that must be provided on the day specified in the schedule may exceed a bank’s daily ATM cash-withdrawal limit, and explicitly provides that the EFA Act does not supersede the bank’s policy in this regard. The Board believes that the rationale 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 addresses the relation between a bank’s cash-withdrawal limit (for over-the-counter cash withdrawals as well as ATM cash withdrawals) and the requirements of this subpart.

3. The Board believes that the Congress included this special cash-withdrawal rule to provide a depositary bank with additional time to learn of the nonpayment of a check before it must make funds available to its customer. If a customer deposits a local check on a Monday, and that check is returned by the paying bank, the depositary bank may not receive the returned check until Thursday, the day after funds for a local check ordinarily must be made available for withdrawal. 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, certification of a check, or other irrevocable commitment to pay, such as authorization of an on-line point-of-sale debit. The rule also would apply to checks presented over the counter 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 cutoff hour established under UCC 4-108. The cash-withdrawal rule does not apply to checks and other provisional debits presented to the bank for payment that the bank has the right to return.

4. Dollar amount adjustment. See section 229.11 for the rules regarding adjustments for inflation every five years to the dollar amounts in this section.

2. The Congress did not provide this extension of the schedules to checks drawn on a paying bank located in Alaska, Hawaii, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, or the U.S. Virgin Islands and deposited in an account at a depositary bank in the 48 contiguous states. Therefore, a check deposited in a San Francisco bank drawn on a Hawaii paying bank must be made available for withdrawal not later than the second rather than the third business day following deposit.