Getting ready for the check-processing region consolidation

The Federal Reserve Banks have reported through their FRB Services website, that the paper check processing performed in Atlanta will move to Cleveland on February 26, 2010. That is the final consolidation of paper check processing regions, and after that occurs there will be only one paper check processing region. Official notification from the Federal Reserve Board is expected to be released and published in the Federal Register soon.

The move to a single paper check-processing region means there will no longer be non-local checks as that term is used in Regulation CC. Specifically, financial institutions with delayed funds availability policies can no longer delay the availability of a non-local check for 5 days. The longest standard delay that can be used will be the 2-day availability period that is currently allowed for local checks.

Additionally, institutions with immediate, same day, or next day funds availability policies typically provide for the ability to hold checks on either a case-by-case basis or by using a special exception hold. Currently, the initial funds availability disclosure is written based on non-local hold periods. Since all standard checks will be treated as local checks, the disclosure will need to be updated.

This in turn affects the funds availability policies for virtually all financial institutions; and will require most of you to take the following steps. Please click on the link to read more about them.

  1. Review and update your funds availability policies
    1. Delayed funds availability
    2. Immediate, same day, or next day funds availability
    3. Other changes needed
  2. Send change notices
  3. Update lobby posters

Early compliance is permitted and encouraged.
Initial funds availability disclosures will need to be updated no later than February 26, 2010. Change notices will need to be sent to consumer account owners of transaction accounts (unless you apply, or are required by state law to apply your policy to other types of accounts) by March 28th, 2010 for a change that makes funds available sooner or, if you are making other changes to your policy, by January 28th, 2010 for a change that further delays the availability of funds (Note: these dates assume you are using the February 26, 2010 effective date and not changing your policy sooner)


Training

The following links will help you and your staff to learn more about Regulation CC, understand how it affects your organization, and comply with the requirements:

Reg CC compliance article—ComplianceHeadquarters™ helps you better understand the regulations in your terms, and this is no exception. Read the article to better understand the regulation and what you should consider in your compliance of it.

Reg CC Flyer (PDF 73KB)—View a flyer that explains the regulation, what it means to your organization, and what you can do to comply.

Related products and services

Account Services Kit/Account Information Brochure—For consumer or business—helps you maintain your disclosures with less work on your part. These brochures combine your deposit disclosures with marketing inserts and allow you to meet disclosure requirements and educate current and potential account owners about your products and services.

Change Notices—These stand-alone change notices are designed to work for those of you who are changing your funds availability policy as a result of the consolidation to a single region for processing paper checks.

Lobby Posters—The lobby poster describes your funds availability time periods applicable to consumer accounts, as required by Reg CC. It needs to be conspicuously posted in each location (i.e., branch) where your employees accept deposits to consumer accounts.

Account Representative follow-up

Click here to request Regulation CC follow-up from your Account Representative.
© Wolters Kluwer Financial Services