APPENDIX
C—Model Availability-Policy Disclosures, Clauses, and Notices; and
Model Substitute-Check-Policy Disclosure and Notices
A. Introduction 1. Appendix
C contains model disclosures, clauses, and notices that may be used
by banks to meet their disclosure and notice responsibilities under
the regulation. Banks using the models (except models C-22 through
C-25) properly will be deemed in compliance with the regulation’s
disclosure requirements.
2. Information that must
be inserted by a bank using the models is (italicized) within
parentheses in the text of the models. Optional information is enclosed
in brackets.
3. Banks may make certain changes
to the format or content of the models, including deleting material
that is inapplicable, without losing the EFA Act’s protection from
liability for banks that use the forms properly. For example, if a
bank does not have a cutoff hour prior to its closing time, or if
a bank does not take advantage of the section 229.13 exceptions, it
may delete the references to those provisions. Changes to the models
may not be so extensive as to affect the substance, clarity, or meaningful
sequence of the models. Acceptable changes include, for example—
a.
using “customer” and “bank” instead of pronouns
b.
changing the typeface or size
c.
incorporating
certain state-law plain-English requirements
4. Shorter time periods for availability may
always be substituted for time periods used in the models.
5. Banks may also add related information. For example,
a bank may indicate that although funds have been made available to
a customer and the customer has withdrawn them, the customer is still
responsible for problems with the deposit, such as checks that were
deposited being returned unpaid. Or a bank could include a telephone
number to be used if a customer has an inquiry regarding a deposit.
6. Banks are cautioned against using the models without
reviewing their own policies and practices, as well as state and federal
laws regarding the time periods for availability of specific types
of checks. A bank using the models will be in compliance with the
EFA Act and the regulation only if the bank’s disclosures correspond
to its availability policy.
7. Banks that have
used earlier versions of the models (such as those models that gave
Social Security benefits and payroll payments as examples of preauthorized
credits available the day after deposit, or that did not address the
cash-withdrawal limitation) are protected from civil liability under
section 229.21(e). Banks are encouraged, however, to use current versions
of the models when reordering or reprinting supplies.
9-636
1. Models C-1 Through C-5A Generally a. Models C-1 through C-5A are models
for the availability-policy disclosures described in section 229.16
and substitute-check-policy disclosure described in section 229.57.
The models accommodate a variety of availability policies, ranging
from next-day availability to holds to statutory limits on all deposits.
Model C-3 reflects the additional disclosures discussed in section
229.16(b) and (c) for banks that have a policy of extending availability
times on a case-by-case basis.
b. As already noted,
there are several places in the forms where information must be inserted.
This information includes the bank’s cutoff times, limitations relating
to next-day availability, and the first four digits of routing numbers
for local banks. In disclosing when funds will be available for withdrawal,
the bank must insert the ordinal number (such as first, second, etc.)
of the business day after deposit that the funds will become available.
c. Models C-1 through C-5A generally do not reflect any
optional provisions of the regulation, or those that apply only to
certain banks. Instead, disclosures for these provisions are included
in models C-6 through C-11A. A bank using one of the model availability-policy
disclosures should also consider whether it must incorporate one or
more of models C-6 through C-11A.
d. While section
229.10(b) of the regulation requires next-day availability for electronic
payments, Treasury regulations (31 CFR 210) and ACH association rules
require that preauthorized credits (direct deposits) be made available
on the day the bank receives the funds. Models C-1 through C-5 reflect
these rules. Wire transfers, however, are not governed by Treasury
or ACH rules, but banks generally make funds from wire transfers available
on the day received or on the business day following receipt. Banks
should ensure that their disclosures reflect the availability given
in most cases for wire transfers.
9-637
2. Model C-1, Next-Day Availability A bank may use this model when its policy is to make funds from all
deposits available on the first business day after a deposit is made.
This model may also be used by banks that provide immediate availability
by substituting the word “immediately” in place of “on the first business
day after the day we receive your deposit.”
3. Model C-2, Next-Day Availability and
Section 229.13 Exceptions A bank may
use this model when its policy is to make funds from all deposits
available to its customers on the first business day after the deposit
is made, and to reserve the right to invoke the new-account and other
exceptions in section 229.13. In disclosing that a longer delay may
apply, a bank may disclose when funds will generally be available
based on when the funds would be available if the deposit were of
a nonlocal check.
9-638
4. Model C-3,
Next-Day Availability, Case-by-Case Holds to Statutory Limits, and
Section 229.13 Exceptions A bank may
use this model when its policy, in most cases, is to make funds from
all types of deposits available the day after the deposit is made,
but to delay availability on some deposits on a case-by-case basis
up to the maximum time periods allowed under the regulation. A bank
using this model also reserves the right to invoke the exceptions
listed in section 229.13. A bank using this model also reserves the
right to invoke the exceptions listed in section 229.13. In disclosing
that a longer delay may apply, a bank may disclose when funds will
generally be available based on when the funds would be available
if the deposit were of a nonlocal check.
9-639
5. Model C-4, Holds to Statutory Limits on All Deposits A bank may use this model when its policy is to
impose delays to the full extent allowed under section 229.12 and
to reserve the right to invoke the section 229.13 exceptions. In disclosing
that a longer delay may apply, a bank may disclose when funds will
generally be available based on when the funds would be available
if the deposit were of a nonlocal check. Model C-4 uses a chart to
show the bank’s availability policy for local and nonlocal checks,
and model C-5 uses a narrative description.
6. Model C-5 A bank may use this form when its policy is to impose delays to the
full extent allowed by section 229.12 and to reserve the right to
invoke the section 229.13 exceptions. In disclosing that a longer
delay may apply, a bank may disclose when funds will generally be
available based on when the funds would be available if the deposit
were of a nonlocal check.
7. Model C-5A A bank may use this form
when it is providing the disclosure to its consumers required by section
229.57 explaining that a substitute check is the legal equivalent
of an original check and the circumstances under which the consumer
may make a claim for expedited recredit.
9-640
1. Models C-6 through
C-11A Generally Certain clauses like
those in the models must be incorporated into a bank’s availability-policy
disclosure under certain circumstances. The commentary to each clause
indicates when a clause similar to the model clause is required.
9-641
2. Model C-6, Holds on Other Funds (Check
Cashing) A bank that reserves the right
to place a hold on funds already on deposit when it cashes a check
for a customer, as addressed in section 229.19(e), must incorporate
this type of clause in its availability-policy disclosure.
3. Model C-7, Holds on Other Funds (Other
Account) A bank that reserves the right
to place a hold on funds in an account of the customer other than
the account into which the deposit is made, as addressed in section
229.19(e), must incorporate this type of clause in its availability-policy
disclosure.
9-642
4. Model C-8, Appendix B Availability
(Nonlocal Checks) A bank in a check-processing
region where the availability schedules for certain nonlocal checks
have been reduced, as described in appendix B of Regulation CC, must
incorporate this type of clause in its availability-policy disclosure.
Banks using model C-5 may insert this clause at the conclusion of
the discussion titled “Nonlocal Checks.”
5. Model C-9, Automated Teller Machine
Deposits (Extended Holds) A bank that
reserves the right to delay availability of deposits at nonproprietary
ATMs until the fifth business day following the date of deposit, as
permitted by section 229.12(f), must incorporate this type of clause
in its availability-policy disclosure. A bank must choose among the
alternative language based on how it chooses to differentiate between
proprietary and nonproprietary ATMs, as required under section 229.16(b)(5).
9-644
6. Model C-10, Cash-Withdrawal Limitation A bank that imposes cash-withdrawal limitations
under section 229.12 must incorporate this type of clause in its availability-policy
disclosure. Banks reserving the right to impose the cash-withdrawal
limitation and using model C-3 should disclose that funds may not
be available until the sixth (rather than fifth) business day in the
first paragraph under the heading “Longer Delays May Apply.”
7. Model C-11, Credit Union Interest-Payment
Policy A credit union subject to the
notice requirement of section 229.14(b)(2) must incorporate this type
of clause in its availability-policy disclosure. This model clause
is only an example of a hypothetical policy. Credit unions may follow
any policy for accrual provided the method of accruing interest is
the same for cash and check deposits.
8. Model C-11A, Availability of Funds Deposited
at Other Locations A clause similar
to model C-11A should be used if a bank bases the availability of
funds on the location where the funds are deposited (for example,
at a contractual or other branch located in a different check-processing
region). Similarly, a clause similar to model C-11A should be used
if a bank distinguishes between local and nonlocal checks (for example,
a bank using model availability-policy disclosure C-4 and C-5), and
accepts deposits in more than one check-processing region.
9-645
1. Model Notices
C-12 through C-25 Generally Models C-12
through C-25 provide models for the various notices required by the
regulation. A bank that cashes a check and places a hold on funds
in an account of the customer (see section 229.19(e)) should
modify the model hold notice accordingly. For example, the bank could
replace the word “deposit” with the word “transaction” and could add
the phrase “or cashed” after the word “deposited.”
2. Model C-12, Exception-Hold Notice This model satisfies the written notice
required under section 229.13(g) when a bank places a hold based on
a section 229.13 exception. If a hold is being placed on more than
one check in a deposit, each check need not be described, but if different
reasons apply, each reason must be indicated. A bank may use the actual
date when funds will be available for withdrawal rather than the number
of the business day following the day of deposit. A bank must incorporate
in the notice the material set out in brackets if it imposes overdraft
or returned-check fees after invoking the reasonable-cause exception
under section 229.13(e).
9-646
3. Model C-13, Reasonable-Cause Hold Notice This notice satisfies the written notice required under
section 229.13(g) when a bank invokes the reasonable-cause exception
under section 229.13(e). The notice provides the bank with a list
of specific reasons that may be given for invoking the exception.
If a hold is being placed on more than one check in a deposit, each
check must be described separately, and if different reasons apply,
each reason must be indicated. A bank may disclose its reason for
doubting collectibility by checking the appropriate reason on the
model. If the “Other” category is checked, the reason must be given.
A bank may use the actual date when funds will be available for withdrawal
rather than the number of the business day following the day of deposit.
A bank must incorporate in the notice the material set out in brackets
if it imposes overdraft or returned-check fees after invoking the
reasonable-cause exception under section 229.13(e).
4. Model C-14, One-Time Notice for Large-Deposit
and Redeposited-Check Exception Holds This model satisfies the notice requirements of section 229.13(g)(2)
concerning nonconsumer accounts.
5. Model C-15, One-Time Notice for Repeated-Overdraft Exception
Hold This model satisfies the notice
requirements of section 229.13(g)(3).
6. Model C-16, Case-by-Case Hold Notice This model satisfies the notice required
under section 229.16(c)(2) when a bank with a case-by-case hold policy
imposes a hold on a deposit. This notice does not require a statement
of the specific reason for the hold, as is the case when a section
229.13 exception hold is placed. A bank may specify the actual date
when funds will be available for withdrawal rather than the number
of the business day following the day of deposit when funds will be
available. A bank must incorporate in the notice the material set
out in brackets if it imposes overdraft fees after invoking a case-by-case
hold.
9-647
7. Model C-17, Notice at Locations
Where Employees Accept Consumer Deposits, and Model C-18, Notice at
Locations Where Employees Accept Consumer Deposits (Case-by-Case Holds) These models satisfy the notice requirement
of section 229.18(b). Model C-17 reflects an availability policy of
holds to statutory limits on all deposits, and model C-18 reflects
a case-by-case availability policy.
8. Model C-19, Notice at Automated Teller
Machines This model satisfies the ATM
notice requirement of section 229.18(c)(1).
9-648
9. Model C-20, Notice at Automated Teller Machines (Delayed Receipt) This model satisfies the ATM notice requirement
of section 229.18(c)(2) when receipt of deposits at off-premises ATMs
is delayed under section 229.19(a)(4). It is based on collection of
deposits once a week. If collections occur more or less frequently,
the description of when deposits are received must be adjusted accordingly.
10. Model C-21, Deposit-Slip
Notice This model satisfies the notice
requirements of section 229.18(a) for deposit slips.
9-649
11. Models C-22 Through C-25 Generally Models C-22 through C-25 provide models
for the various notices required when a consumer who receives substitute
checks makes an expedited recredit claim under section 229.54 for
a loss related to a substitute check. The Check 21 Act does not provide
banks that use these models with a safe harbor. However, the Board
has published these models to aid banks’ efforts to comply with section
229.54(e).
12. Model C-22,
Valid-Claim Refund Notice A bank may
use this model when crediting the entire amount or the remaining amount
of a consumer’s expedited-recredit claim after determining that the
consumer’s claim is valid. This notice could be used when the bank
provides the consumer a full recredit based on a valid-claim determination
within ten days of the receipt of the consumer’s claim or when the
bank recredits the remaining amount of a consumer’s expedited-recredit
claim by the 45th calendar day after receiving the consumer’s claim,
as required under section 229.54(e)(1).
9-650
13. Model C-23, Provisional-Refund Notice A bank may use this model when providing a full or partial
expedited recredit to a consumer pending further investigation of
the consumer’s claim, as required under section 229.54(e)(1).
14. Model C-24, Denial Notice A bank may use this model when denying a claim for
an expedited recredit under section 229.54(e)(2).
15. Model C-25, Reversal Notice A bank may use this model when reversing an expedited
recredit that was credited to a consumer’s account under section 229.54(e)(3).