[Code of Federal Regulations]

[Title 12, Volume 3]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR229.13]



[Page 548-551]

 

                       TITLE 12--BANKS AND BANKING

 

                   CHAPTER II--FEDERAL RESERVE SYSTEM

 

PART 229_AVAILABILITY OF FUNDS AND COLLECTION OF CHECKS (REGULATION CC)

--Table of Contents

 

  Subpart B_Availability of Funds and Disclosure of Funds Availability 

                                Policies

 

Sec. 229.13  Exceptions.



    (a) New accounts. For purposes of this paragraph, checks subject to 

Sec. 229.10(c)(1)(v) include traveler's checks.

    (1) A deposit in a new account--

    (i) Is subject to the requirements of Sec. 229.10 (a) and (b) to 

make funds from deposits by cash and electronic payments available for 

withdrawal on the business day following the banking day of deposit or 

receipt;

    (ii) Is subject to the requirements of Sec. 229.10(c)(1) (i) 

through (v) and Sec. 229.10(c)(2) only with respect to the first $5,000 

of funds deposited on any one banking day; but the amount of the deposit 

in excess of $5,000 shall be available for withdrawal not later than the 

ninth business day following the banking day on which funds are 

deposited; and

    (iii) Is not subject to the availability requirements of Sec. Sec. 

229.10(c)(1)(vi) and (vii) and 229.12.



[[Page 549]]



    (2) An account is considered a new account during the first 30 

calendar days after the account is established. An account is not 

considered a new account if each customer on the account has had, within 

30 calendar days before the account is established, another account at 

the depositary bank for at least 30 calendar days.

    (b) Large deposits. Sections 229.10(c) and 229.12 do not apply to 

the aggregate amount of deposits by one or more checks to the extent 

that the aggregate amount is in excess of $5,000 on any one banking. 

day. For customers that have multiple accounts at a depositary bank, the 

bank may apply this exception to the aggregate deposits to all accounts 

held by the customer, even if the customer is not the sole holder of the 

accounts and not all of the holders of the accounts are the same.

    (c) Redeposited checks. Sections 229.10(c) and 229.12 do not apply 

to a check that has been returned unpaid and redeposited by the customer 

or the depositary bank. This exception does not apply--

    (1) To a check that has been returned due to a missing indorsement 

and redeposited after the missing indorsement has been obtained, if the 

reason for return indication on the check states that it was returned 

due to a missing indorsement; or

    (2) To a check that has been returned because it was post dated, if 

the reason for return indicated on the check states that it was returned 

because it was post dated, and if the check is no longer postdated when 

redeposited.

    (d) Repeated overdrafts. If any account or combination of accounts 

of a depositary bank's customer has been repeatedly overdrawn, then for 

a period of six months after the last such overdraft, Sec. Sec. 

229.10(c) and 229.12 do not apply to any of the accounts. A depositary 

bank may consider a customer's account to be repeatedly overdrawn if--

    (1) On six or more banking days within the preceding six months, the 

account balance is negative, or the account balance would have become 

negative if checks or other charges to the account had been paid; or

    (2) On two or more banking days within the preceding six months, the 

account balance is negative, or the account balance would have become 

negative, in the amount of $5,000 or more, if checks or other charges to 

the account had been paid.

    (e) Reasonable cause to doubt collectibility--(1) In general. 

Sections 229.10(c) and 229.12 do not apply to a check deposited in an 

account at a depositary bank if the depositary bank has reasonable cause 

to believe that the check is uncollectible from the paying bank. 

Reasonable cause to believe a check is uncollectible requires the 

existence of facts that would cause a well-grounded belief in the mind 

of a reasonable person. Such belief shall not be based on the fact that 

the check is of a particular class or is deposited by a particular class 

of persons. The reason for the bank's belief that the check is 

uncollectible shall be included in the notice required under paragraph 

(g) of this section.

    (2) Overdraft and returned check fees. A depositary bank that 

extends the time when funds will be available for withdrawal as 

described in paragraph (e)(1) of this section, and does not furnish the 

depositor with written notice at the time of deposit shall not assess 

any fees for any subsequent overdrafts (including use of a line of 

credit) or return of checks of other debits to the account, if--

    (i) The overdraft or return of the check would not have occurred 

except for the fact that the deposited funds were delayed under 

paragraph (e)(1) of this section; and

    (ii) The deposited check was paid by the paying bank.



Notwithstanding the foregoing, the depositary bank may assess an 

overdraft or returned check fee if it includes a notice concerning 

overdraft and returned check fees with the notice of exception required 

in paragraph (g) of this section and, when required, refunds any such 

fees upon the request of the customer. The notice must state that the 

customer may be entitled to a refund of overdraft or returned check fees 

that are assessed if the check subject to the exception is paid and how 

to obtain a refund.

    (f) Emergency conditions. Sections 229.10(c) and 229.12 do not apply 

to funds deposited by check in a depositary bank in the case of--



[[Page 550]]



    (1) An interruption of communications or computer or other equipment 

facilities;

    (2) A suspension of payments by another bank;

    (3) A war; or

    (4) An emergency condition beyond the control of the depositary 

bank,



if the depositary bank exercises such diligence as the circumstances 

require.

    (g) Notice of exception--(1) In general. Subject to paragraphs 

(g)(2) and (g)(3) of this section, when a depositary bank extends the 

time when funds will be available for withdrawal based on the 

application of an exception contained in paragraphs (b) through (e) of 

this section, it must provide the depositor with a written notice.

    (i) The notice shall include the following information--

    (A) A number or code, which need not exceed four digits, that 

identifies the customer's account;

    (B) The date of the deposit;

    (C) The amount of the deposit that is being delayed;

    (D) The reason the exception was invoked; and

    (E) The time period within which the funds will be available for 

withdrawal.

    (ii) Timing of notice. The notice shall be provided to the depositor 

at the time of the deposit, unless the deposit is not made in person to 

an employee of the depositary bank, or, if the facts upon which a 

determination to invoke one of the exceptions in paragraphs (b) through 

(e) of this section to delay a deposit only become known to the 

depositary bank after the time of the deposit. If the notice is not 

given at the time of the deposit, the depositary bank shall mail or 

deliver the notice to the customer as soon as practicable, but no later 

than the first business day following the day the facts become known to 

the depositary bank, or the deposit is made, whichever is later.

    (2) One-time exception notice. In lieu of providing notice pursuant 

to paragraph (g)(1) of this section, a depositary bank that extends the 

time when the funds deposited in a nonconsumer account will be available 

for withdrawal based on an exception contained in paragraph (b) or (c) 

of this section may provide a single notice to the customer that 

includes the following information--

    (i) The reason(s) the exception may be invoked; and

    (ii) The time period within which deposits subject to the exception 

generally will be available for withdrawal.



This one-time notice shall be provided only if each type of exception 

cited in the notice will be invoked for most check deposits in the 

account to which the exception could apply. This notice shall be 

provided at or prior to the time notice must be provided under paragraph 

(g)(1)(ii) of this section.

    (3) Notice of repeated overdrafts exception. In lieu of providing 

notice pursuant to paragraph (g)(1) of this section, a depositary bank 

that extends the time when funds deposited in an account will be 

available for withdrawal based on the exception contained in paragraph 

(d) of this section may provide a notice to the customer for each time 

period during which the exception will be in effect. The notice shall 

include the following information--

    (i) The account number of the customer;

    (ii) The fact that the availability of funds deposited in the 

customer's account will be delayed because the repeated overdrafts 

exception will be invoked;

    (iii) The time period within which deposits subject to the exception 

generally will be available for withdrawal; and

    (iv) The time period during which the exception will apply.



This notice shall be provided at or prior to the time notice must be 

provided under paragraph (g)(1)(ii) of this section and only if the 

exception cited in the notice will be invoked for most check deposits in 

the account.

    (4) Emergency conditions exception notice. When a depositary bank 

extends the time when funds will be available for withdrawal based on 

the application of the emergency conditions exception contained in 

paragraph (f) of this section, it must provide the depositor with notice 

in a reasonable form and within a reasonable time given the 

circumstances. The notice shall include the reason the exception was 

invoked and the time period within which funds shall be made available 

for withdrawal, unless the depositary bank, in good faith, does not know 

at



[[Page 551]]



the time the notice is given the duration of the emergency and, 

consequently, when the funds must be made available. The depositary bank 

is not required to provide a notice if the funds subject to the 

exception become available before the notice must be sent.

    (5) Record retention. A depositary bank shall retain a record, in 

accordance with Sec. 229.21(g), of each notice provided pursuant to its 

application of the reasonable cause exception under paragraph (e) of 

this section, together with a brief statement of the facts giving rise 

to the bank's reason to doubt the collectibility of the check.

    (h) Availability of deposits subject to exceptions. (1) If an 

exception contained in paragraphs (b) through (f) of this section 

applies, the depositary bank may extend the time periods established 

under Sec. Sec. 229.10(c) and 229.12 by a reasonable period of time.

    (2) If a depositary bank invokes an exception contained in 

paragraphs (b) through (e) of this section with respect to a check 

described in Sec. 229.10(c)(1) (i) through (v) or Sec. 229.10(c)(2), 

it shall make the funds available for withdrawal not later than a 

reasonable period after the day the funds would have been required to be 

made available had the check been subject to 229.12.

    (3) If a depositary bank invokes an exception under paragraph (f) of 

this section based on an emergency condition, the depositary bank shall 

make the funds available for withdrawal not later than a reasonable 

period after the emergency has ceased or the period established in 

Sec. Sec. 229.10(c) and 229.12, whichever is later.

    (4) For the purposes of this section, a ``reasonable period'' is an 

extension of up to one business day for checks described in Sec. 

229.10(c)(1)(vi), five business days for checks described in Sec. 

229.12(b) (1) through (4), and six business days for checks described in 

Sec. 229.12(c) (1) and (2) or Sec. 229.12(f). A longer extension may 

be reasonable, but the bank has the burden of so establishing.



[53 FR 19433, May 27, 1988, as amended by Reg. CC, 54 FR 13850, Apr. 6, 

1989; Reg. CC, 55 FR 21855, May 30, 1990; 57 FR 3279, Jan. 29, 1992; 57 

FR 36598, Aug. 14, 1992; 60 FR 51671, Oct. 3, 1995; Reg. CC, 62 FR 

13809, Mar. 24, 1997; 69 FR 47310, Aug. 4, 2004]