SECTION
229.16—Specific Availability-Policy Disclosure
A. 229.16(a) General 1. This section describes the information that must be disclosed
by banks to comply with sections 229.17 and 229.18(d), which require
that banks furnish notices of their specific policy regarding availability
of deposited funds. The disclosure provided by a bank must reflect
the availability policy followed by the bank in most cases, even though
a bank may in some cases make funds available sooner or impose a longer
delay.
2. The disclosure must reflect the policy and practice
of the bank regarding availability as to most accounts and most deposits
into those accounts. In disclosing the availability policy that it
follows in most cases, a bank may provide a single disclosure that
reflects one policy to all its transaction account customers, even
though some of its customers may receive faster availability than
that reflected in the policy disclosure. Thus, a bank need not disclose
to some customers that they receive faster availability than indicated
in the disclosure. If, however, a bank has a policy of imposing delays
in availability on any customers longer than those specified in its
disclosure, those customers must receive disclosures that reflect
the longer applicable availability periods. A bank may establish different
availability policies for different groups of customers, such as customers
in a particular geographic area or customers of a particular branch.
For purposes of providing a specific availability policy, the bank
may allocate customers among groups through good faith use of a reasonable
method. A bank may also establish different availability policies
for deposits at different locations, such as deposits at a contractual
branch.
3. A bank may disclose that funds are “available for withdrawal”
on a given day notwithstanding the fact that the bank uses the funds
to pay checks received before that day. For example, a bank may disclose
that its policy is to make funds available from deposits of local
checks on the second business day following the day of deposit, even
though it may use the deposited funds to pay checks prior to the second
business day; the funds used to pay checks in this example are not
available for withdrawal until the second business day after deposit
because the funds are not available for all uses until the second
business day. (See the definition of “available for withdrawal” in
section 229.2(d).)
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1. This paragraph
sets forth the items that must be included, as applicable, in a bank’s
specific availability-policy disclosure. The information that must
be disclosed by a particular bank will vary considerably depending
upon the bank’s availability policy. For example, a bank that makes
deposited funds available for withdrawal on the business day following
the day of deposit need simply disclose that deposited funds will
be available for withdrawal on the first business day after the day
of deposit, the bank’s business days, and when deposits are considered
received.
2. On the other hand, a bank that has a policy of routinely
delaying on a blanket basis the time when deposited funds are available
for withdrawal would have a more detailed disclosure. Such blanket
hold policies might be for the maximum time allowed under the federal
law or might be for shorter periods. These banks must disclose the
types of deposits that will be subject to delays, how the customer
can determine the type of deposit being made, and the day that funds
from each type of deposit will be available for withdrawal.
3. Some banks may have a combination
of next-day availability and blanket delays. For example, a bank may
provide next-day availability for all deposits except for one or two
categories, such as deposits at nonproprietary ATMs and nonlocal personal
checks over a specified dollar amount. The bank would describe the
categories that are subject to delays in availability and tell the customer
when each category would be available for withdrawal, and state that
other deposits will be available for withdrawal on the first business
day after the day of deposit. Similarly, a bank that provides availability
on the second business day for most of its deposits would need to
identify the categories of deposits which, under the regulation, are
subject to next-day availability and state that all other deposits
will be available on the second business day.
4. Because many banks’ availability policies
may be complex, a bank must give a brief summary of its policy at
the beginning of the disclosure. In addition, the bank must describe
any circumstances when actual availability may be longer than the
schedules disclosed. Such circumstances would arise, for example,
when the bank invokes one of the exceptions set forth in section 229.13
of the regulation, or when the bank delays or extends the time when
deposited funds are available for withdrawal up to the time periods
allowed by the regulation on a case-by-case basis. Also, a bank that
must make certain checks available faster under appendix B (reduction
of schedules for certain nonlocal checks) must state that some check
deposits will be available for withdrawal sooner because of special
rules and that a list of the pertinent routing numbers is available
upon request.
5. Generally, a bank that distinguishes in its disclosure
between local and nonlocal checks based on the routing number on the
check must disclose to its customers that certain checks, such as
some credit-union payable-through drafts, will be treated as local
or nonlocal based on the location of the bank by which they are payable
(e.g., the credit union), and not on the basis of the location of
the bank whose routing number appears on the check. A bank is not
required to provide this disclosure, however, if it makes the proceeds
of both local and nonlocal checks available for withdrawal within
the time periods required for local checks in sections 229.12 and
229.13.
6. The business-day cutoff time used by the bank must
be disclosed and if some locations have different cutoff times the
bank must note this in the disclosure and state the earliest time
that might apply. A bank need not list all of the different cutoff
times that might apply. If a bank does not have a cutoff time prior
to its closing time, the bank need not disclose a cutoff time.
7. A bank taking advantage of the extended time period
for making deposits at nonproprietary ATMs available for withdrawal
under section 229.12(f) must explain this in the initial disclosure.
In addition, the bank must provide a list (on or with the initial
disclosure) of either the bank’s proprietary ATMs or those ATMs that
are nonproprietary at which customers may make deposits. As an alternative
to providing such a list, the bank may label all of its proprietary
ATMs with the bank’s name and state in the initial disclosure that
this has been done. Similarly, a bank taking advantage of the cash-withdrawal
limitations of section 229.12(d), or the provision in section 229.19(e)
allowing holds to be placed on other deposits when a deposit is made
or a check is cashed, must explain this in the initial disclosure.
8. A bank that provides availability based on when the
bank generally receives credit for deposited checks need not disclose
the time when a check drawn on a specific bank will be available for
withdrawal. Instead, the bank may disclose the categories of deposits
that must be available on the first business day after the day of
deposit (deposits subject to section 229.10) and state the other categories
of deposits and the time periods that will be applicable to those
deposits. For example, a bank might disclose the four-digit Federal
Reserve routing symbol for local checks and indicate that such checks
as well as certain nonlocal checks will be available for withdrawal
on the first or second business day following the day of deposit,
depending on the location of the particular bank on which the check
is drawn, and disclose that funds from all other checks will be available
on the second or third business day. The bank must also disclose that
the customer may request a copy of the bank’s detailed schedule that
would enable the customer to determine the availability of any check
and must provide such schedule upon request. A change in the bank’s detailed
schedule would not trigger the change-in-policy disclosure requirement
of section 229.18(e).
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1. Notice in Specific Policy Disclosure a. Banks that make deposited funds available for withdrawal
sooner than required by the regulation—for example, providing their
customers with immediate or next-day availability for deposited funds—and
delay the time when funds are available for withdrawal only from time
to time determined on a case-by-case basis, must provide notice of
this in their specific availability-policy disclosure. This paragraph
outlines the requirements for that notice.
b. In addition to stating what their specific availability
policy is in most cases, banks that may delay or extend the time when
deposits are available on a case-by-case basis must state that from
time to time funds may be available for withdrawal later than the
time periods in their specific policy disclosure, disclose the latest
time that a customer may have to wait for deposited funds to be available
for withdrawal when a case-by-case hold is placed, state that customers
will be notified when availability of a deposit is delayed on a case-by-case
basis, and advise customers to ask if they need to be sure of the
availability of a particular deposit.
c. A bank that imposes delays on a case-by-case basis
is still subject to the availability requirements of this regulation.
If the bank imposes a delay on a particular deposit that is not longer
than the availability required by section 229.12 for local and nonlocal
checks, the reason for the delay need not be based on the exceptions
provided in section 229.13. If the delay exceeds the time periods
permitted under section 229.12, however, then it must be based on
an exception provided in section 229.13, and the bank must comply
with the section 229.13 notice requirements. A bank that imposes delays
on a case-by-case basis may avail itself of the one-time notice provisions
in section 229.13(g)(2) and (3) for deposits to which those provisions
apply.
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2. Notice at Time of Case-by-Case
Delay a. In addition to including the
disclosures required by paragraph (c)(1) of this section in their
specific availability-policy disclosure, banks that delay or extend
the time period when funds are available for withdrawal on a case-by-case
basis must give customers a notice when availability of funds from
a particular deposit will be delayed or extended beyond the time when
deposited funds are generally available for withdrawal. The notice
must state that a delay is being imposed and indicate when the funds
will be available. In addition, the notice must include the account
number, the date of the deposit, and the amount of the deposit being
delayed.
b. If notice of the delay was not given at the time the
deposit was made and the bank assesses overdraft or returned-check
fees on accounts when a case-by-case hold has been placed, the case-by-case
hold notice provided to the customer must include a notice concerning
overdraft or returned-check fees. The notice must state that the customer
may be entitled to a refund of any overdraft or returned-check fees
that result from the deposited funds’ not being available if the check
that was deposited was in fact paid by the payor bank, and explain
how to request a refund of any fees. (See section 229.16(c)(3).)
c. The requirement that the case-by-case hold notice state
the day that funds will be made available for withdrawal may be met
by stating the date or the number of business days after deposit that
the funds will be made available. This requirement is satisfied if
the notice provides information sufficient to indicate when funds
will be available and the amounts that will be available at those
times. For example, for a deposit involving more than one check, the
bank need not provide a notice that discloses when funds from each
individual item in the deposit will be available for withdrawal. Instead,
the bank may provide a total dollar amount for each of the time periods
when funds will be available, or provide the customer with an explanation
of how to determine the amount of the deposit that will be held and
when the held funds will be available for withdrawal.
d. For deposits made in person to
an employee of the depositary bank, the notice generally must be given
at the time of the deposit. The notice at the time of the deposit
must be given to the person making the deposit, that is, the “depositor.”
The depositor need not be the customer holding the account. For other
deposits, such as deposits received at an ATM, lobby deposit box,
night depository, through the mail, or by armored car, notice must
be mailed to the customer not later than the close of the business
day following the banking day on which the deposit was made. Notice
to the customer also may be provided not later than the close of the
business day following the banking day on which the deposit was made
if the decision to delay availability is made after the time of the
deposit.
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3. Overdraft and Returned-Check
Fees
If a depositary bank delays or extends the time when funds
from a deposited check are available for withdrawal on a case-by-case
basis and does not provide a written notice to its depositor at the
time of deposit, the depositary bank may not assess any overdraft
or returned-check fees (such as an insufficient-funds charge) or charge
interest for use of an overdraft line of credit, if the deposited
check is paid by the paying bank and these fees would not have occurred
had the additional case-by-case delay not been imposed. A bank may
assess an overdraft or returned-check fee under these circumstances,
however, if it provides notice to the customer in the notice required
by paragraph (c)(2) of this section that the fee may be subject to
refund, and refunds the fee upon the request of the customer when
required to do so. The notice must state that the customer may be
entitled to a refund of any overdraft or returned-check fees that
are assessed if the deposited check is paid, and indicate where such
requests for a refund of overdraft fees should be directed. Paragraph
(c)(3) applies when a bank provides a case-by-case notice in accordance
with paragraph (c)(2) and does not apply if the bank has provided
an exception-hold notice in accordance with section 229.13.
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1. This paragraph sets forth the special disclosure requirement
for credit unions that delay accrual of interest or dividends for
all cash and check deposits beyond the date of receiving provisional
credit for checks being deposited. (The interest-payment requirement
is set forth in section 229.14(a).) Such credit unions are required
to describe their policy with respect to accrual of interest or dividends
on deposits in their specific availability-policy disclosure.
