[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: 12CFR229.21]



[Page 556-557]

 

                       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. 229.21  Civil liability.



    (a) Civil liability. A bank that fails to comply with any 

requirement imposed under subpart B, and in connection therewith, 

subpart A, of this part or any provision of state law that supersedes 

any provision of subpart B, and in connection therewith, subpart A, with 

respect to any person is liable to that person in an amount equal to the 

sum of--

    (1) Any actual damage sustained by that person as a result of the 

failure;

    (2) Such additional amount as the court may allow, except that--

    (i) In the case of an individual action, liability under this 

paragraph shall not be less than $100 nor greater than $1,000; and

    (ii) In the case of a class action--

    (A) No minimum recovery shall be applicable to each member of the 

class; and

    (B) The total recovery under this paragraph in any class action or 

series of class actions arising out of the same failure to comply by the 

same depositary bank shall not be more than the lesser of $500,000 or 1 

percent of the net worth of the bank involved; and

    (3) In the case of a successful action to enforce the foregoing 

liability, the costs of the action, together with a reasonable 

attorney's fee as determined by the court.

    (b) Class action awards. In determining the amount of any award in 

any class action, the court shall consider, among other relevant 

factors--

    (1) The amount of any damages awarded;

    (2) The frequency and persistence of failures of compliance;

    (3) The resources of the bank;

    (4) The number of persons adversely affected; and

    (5) The extent to which the failure of compliance was intentional.

    (c) Bona fide errors--(1) General rule. A bank is not liable in any 

action brought under this section for a violation of this subpart if the 

bank demonstrates by a preponderance of the evidence that the violation 

was not intentional and resulted from a bona fide error, notwithstanding 

the maintenance of procedures reasonably adapted to avoid any such 

error.

    (2) Examples. Examples of a bona fide error include clerical, 

calculation, computer malfunction and programming, and printing errors, 

except that an error of legal judgment with respect to the bank's 

obligation under this subpart is not a bona fide error.

    (d) Jurisdiction. Any action under this section may be brought in 

any United States district court or in any other court of competent 

jurisdiction, and shall be brought within one year after the date of the 

occurrence of the violation involved.

    (e) Reliance on Board rulings. No provision of this subpart imposing 

any liability shall apply to any act done or omitted in good faith in 

conformity with any rule, regulation, or interpretation thereof by the 

Board, regardless of whether such rule, regulation, or interpretation is 

amended, rescinded, or determined by judicial or other authority to be 

invalid for any reason after the act or omission has occurred.

    (f) Exclusions. This section does not apply to claims that arise 

under subpart C of this part or to actions for wrongful dishonor.

    (g) Record retention. (1) A bank shall retain evidence of compliance 

with the requirements imposed by this subpart for not less than two 

years. Records



[[Page 557]]



may be stored by use of microfiche, microfilm, magnetic tape, or other 

methods capable of accurately retaining and reproducing information.

    (2) If a bank has actual notice that it is being investigated, or is 

subject to an enforcement proceeding by an agency charged with 

monitoring that bank's compliance with the EFA Act and this subpart, or 

has been served with notice of an action filed under this section, it 

shall retain the records pertaining to the action or proceeding pending 

final disposition of the matter, unless an earlier time is allowed by 

order of the agency or court.



[53 FR 19433, May 27, 1988, as amended at 69 FR 47311, Aug. 4, 2004]