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Electronic Code of Federal Regulations

e-CFR data is current as of December 5, 2019

Amendment


12 CFR--PART 229

View Printed Federal Register page 84 FR 31697 in PDF format.

Amendment(s) published July 3, 2019, in 84 FR 31697

Effective Dates: July 1, 2020

9. Amend appendix E to part 229 as follows:

a. Remove the dollar amounts in the “Remove” column wherever they appear and add in their place the dollar amounts in the “Add” column in the following table:

   

SectionRemoveAdd
229.10(c)$5,000$5,525
229.12(d)400450
229.13(a), (b), and (d)5,0005,525

b. In Section II.D, revise paragraph 1.

c. In Section IV.D, revise paragraph 5 and add paragraph 7.

d. Section V is revised.

e. In Section VI.B, paragraph 4 is added.

f In Section VI.E paragraphs 1 and 2 are revised.

g. Section VII.C, paragraph 2 is revised and paragraph 4 is added.

h. In Section VII.E, paragraph 5 is added.

i. In Section VII.H, paragraph 2(b) is revised.

j. In Section XIV.C, paragraph 2 is revised.

k. In Section XV.A, paragraph 2 is added.

l. Section XXIX is removed and reserved.

The revisions and additions read as follows:

Appendix E to Part 229—Commentary

*   *   *   *   *

II. Section 229.2   Definitions

*   *   *   *   *

D. *  *  *

1. ATM is not defined in the EFA Act. The regulation defines an ATM as an electronic device located in the United States at which a natural person may make deposits to an account by cash or check and perform other account transactions. Point-of-sale terminals, machines that only dispense cash, night depositories, and lobby deposit boxes are not ATMs within the meaning of the definition, either because they do not accept deposits of cash or checks (e.g., point-of-sale terminals and cash dispensers) or because they only accept deposits (e.g., night depositories and lobby boxes) and cannot perform other transactions. A lobby deposit box or similar receptacle in which written payment orders or deposits may be placed is not an ATM.

*   *   *   *   *

IV. *  *  *

D. *  *  *

5. First $225

a. The EFA Act and regulation also require that up to $225 of the aggregate deposit by check or checks not subject to next-day availability on any one banking day be made available on the next business day. For example, if $70 were deposited in an account by check(s) on a Monday, the entire $70 must be available for withdrawal at the start of business on Tuesday. If $400 were deposited by check(s) on a Monday, this section requires that $225 of the funds be available for withdrawal at the start of business on Tuesday. The portion of the customer's deposit to which the $225 must be applied is at the discretion of the depositary bank, as long as it is not applied to any checks subject to next-day availability. The $225 next-day availability rule does not apply to deposits at nonproprietary ATMs.

b. The $225 that must be made available under this rule is in addition to the amount that must be made available for withdrawal on the business day after deposit under other provisions of this section. For example, if a customer deposits a $1,000 Treasury check and a $1,000 local check in its account on Monday, $1,225 must be made available for withdrawal on Tuesday—the proceeds of the $1,000 Treasury check, as well as the first $225 of the local check.

c. A depositary bank may aggregate all local and nonlocal check deposits made by a customer on a given banking day for the purposes of the $225 next-day availability rule. Thus, if a customer has two accounts at the depositary bank, and on a particular banking day makes deposits to each account, $225 of the total deposited to the two accounts must be made available on the business day after deposit. Banks may aggregate deposits to individual and joint accounts for the purposes of this provision.

d. If the customer deposits a $500 local check and gets $225 cash back at the time of deposit, the bank need not make an additional $225 available for withdrawal on the following day. Similarly, if the customer depositing the local check has a negative book balance, or negative available balance in its account at the time of deposit, the $225 that must be available on the next business day may be made available by applying the $225 to the negative balance, rather than making the $225 available for withdrawal by cash or check on the following day.

*   *   *   *   *

7. Dollar Amount Adjustment—See section 229.11 for the rules regarding adjustments for inflation every five years to the dollar amounts used in this section.

*   *   *   *   *

V. Section 229.11   Adjustment of Dollar Amounts

1. Example of a positive adjustment. If the CPI-W for July (and released in August) of the base year and the adjustment year were 100 and 114.7, respectively, the aggregate percentage change for the period would be 14.7%. If the applicable dollar amount was $200 for the prior period, then the adjusted figure would become $225, as the change of $29.40 results in rounding to $25.

2. Example of no adjustment. If the CPI-W for July (and released in August) of the base year and the adjustment year were 100 and 104, respectively, the aggregate percentage change would be 4.0%. If the applicable dollar amount was $200 for the prior period, then the adjusted figure would remain $200, as the change of $8.00 does not result in rounding to $25.

3. Example of accounting for aggregate decrease in subsequent period. If the CPI-W for July (and released in August) of the base year and the adjustment year were 100 and 95, respectively, the aggregate percentage change would be −5%, and no adjustment to the dollar amounts would occur. The CPI-W for July (and released in August) of the base year would be the starting point for calculating any CPI-W increase across subsequent five-year periods. Therefore, if the CPI-W in July (and released in August) of the base year and the CPI-W in July (and released in August) of the years at the end of the next two five-year periods were 100, 95, and 109, respectively, the aggregate percentage change for the entire period would be 9.0%. If the applicable dollar amount was $5,000 for the prior period, then the adjusted figure would become $5,450 as the change of $450 does not require rounding because it is a multiple of $25.

4. Example of accounting for aggregate lack of dollar amount change in subsequent period. If the CPI-W for July (and released in August) of the base year and the year at the end of the subsequent five-year period were 100 and 105, respectively, the aggregate change over the five-year period would be 5%, and no adjustment to the $200 amount would occur, as the change of $10 does not result in rounding to $225. Nonetheless, the CPI-W for July (and released in August) of the base year would be the starting point for calculating any CPI-W percentage increase across the subsequent five-year period. Therefore, if the CPI-W in July (and released in August) of the base year and the CPI-W in July (and released in August) of the years at the end of the next two five-year periods were 100, 105, and 112.6, respectively, the aggregate percentage change for the entire period would be 12.6%. If the applicable dollar amount was $200 for the prior period, then the adjusted figure would become $225 as the change of $25.20 results in rounding to $225, the nearest multiple of $25.

VI. *  *  *

B. 229.12(d) Time Period Adjustment for Withdrawal by Cash or Similar Means

*   *   *   *   *

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.

*   *   *   *   *

E. 229.12(e) Extension of Schedule for Certain Deposits in Alaska, Hawaii, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands

1. The EFA Act and regulation provide an extension of the availability schedules for check deposits at a branch of a bank if the branch is located in Alaska, Hawaii, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, or the U.S. Virgin Islands. The schedules for local checks, nonlocal checks (including nonlocal checks subject to the reduced schedules of appendix B), and deposits at nonproprietary ATMs are extended by one business day for checks deposited to accounts in banks located in these jurisdictions that are drawn on or payable at or through a paying bank not located in the same jurisdiction as the depositary bank. For example, a check deposited in a bank in Hawaii and drawn on a San Francisco paying bank must be made available for withdrawal not later than the third business day following deposit. This extension does not apply to deposits that must be made available for withdrawal on the next business day.

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.

VII. Section 229.13   Exceptions

B. *  *  *

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.

C. *  *  *

2. The following example illustrates the operation of the large-deposit exception. If a customer deposits $2,000 in cash and a $9,000 local check on a Monday, $2,225 (the proceeds of the cash deposit and $225 from the local-check deposit) must be made available for withdrawal on Tuesday. An additional $5,300 of the proceeds of the local check must be available for withdrawal on Wednesday in accordance with the local schedule, and the remaining $3,475 may be held for an additional period of time under the large-deposit exception.

*   *   *   *   *

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.

*   *   *   *   *

E. *  *  *

5. Dollar Amount Adjustment—See section 229.11 for the calculation method used to adjust the dollar amounts in this section every five years.

*   *   *   *   *

H. *  *  *

2. *  *  *

b. In the case of a deposit of multiple checks, the depositary bank has the discretion to place an exception hold on any combination of checks in excess of $5,525. The notice should enable a customer to determine the availability of the deposit in the case of a deposit of multiple checks. For example, if a customer deposits a $5,525 local check and a $5,525 nonlocal check, under the large-deposit exception, the depositary bank may make funds available in the amount of (1) $225 on the first business day after deposit, $5,300 on the second business day after deposit (local check), and $5,525 on the eleventh business day after deposit (nonlocal check with six-day exception hold), or (2) $225 on the first business day after deposit, $5,300 on the fifth business day after deposit (nonlocal check), and $5,525 on the seventh business day after deposit (local check with five-day exception hold). The notice should reflect the bank's priorities in placing exception holds on next-day (or second-day), local, and nonlocal checks.

*   *   *   *   *

XIV. Section 229.20   Relation to State Law

*   *   *   *   *

C. *  *  *

2. Under a state law, some categories of deposits could be available for withdrawal sooner or later than the time required by this subpart, depending on the composition of the deposit. For example, the EFA Act and this regulation (§229.10(c)(1)(vii)) require next-day availability for the first $225 of the aggregate deposit of local or nonlocal checks on any day, and a state law could require next-day availability for any check of $200 or less that is deposited. Under the EFA Act and this regulation, if either one $300 check or three $100 checks are deposited on a given day, $225 must be made available for withdrawal on the next business day, and $75 must be made available in accordance with the local or nonlocal schedule. Under the state law, however, the two deposits would be subject to different availability rules. In the first case, none of the proceeds of the deposit would be subject to next-day availability; in the second case, the entire proceeds of the deposit would be subject to next-day availability. In this example, because the state law would, in some situations, permit a hold longer than the maximum permitted by the EFA Act, this provision of state law is inconsistent and preempted in its entirety.

*   *   *   *   *

XV. Section 229.21   Civil Liability

A. *  *  *

2. Dollar Amount Adjustment—See section 229.11 for the rules regarding adjustments for inflation every five years to the dollar amounts in this section.

*   *   *   *   *

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