Legal Q&A: Changes to Reg CC Threshold Adjustments

Q: When are the Reg CC inflation adjustments effective?

A: The Reg CC threshold adjustments due to inflation are effective on July 1, 2020.

On June 24 2019, the agencies issued a final rule amending Reg CC to adjust dollar amounts for inflation, expand coverage to certain United States territories, and make technical corrections to Reg DD. The effective date for the threshold adjustments is July 1, 2020. However, banks are permitted to implement those changes sooner if so desired.

To summarize the inflation adjustments:

  • The first $200 becomes $225.
    • Reg CC requires the first $100 made by check be made available on the next business day. This “first $100” rule was adjusted to $200 in 2011 and becomes $225 in 2020.
  • The $5,000 of the “large deposit” exception hold becomes $5,525.
    • Reg CC permits an exception hold on large deposits in excess of $5,000 which becomes $5,525.
  • The $400 for non-next day items becomes $450.
    • Reg CC provides that cash withdrawals from local and nonlocal checks need not be available for cash withdrawal until 5:00 p.m. on the day specified in the schedule, but no later than 5:00 p.m., $400 of the deposit must be made available for cash withdrawal, which becomes $450.
  • As of July 1, 2020 the amounts for civil liability in an individual action shall not be greater than $1,100 and $552,500 for class action.

Change in terms notification to customers will be required as well. Reg CC requires notice to customers at least 30 days before implementing a change to the bank’s availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation. Because the threshold adjustments mean that more funds are available to the borrower sooner, the change will expedite availability. Thus, customers must be notified of the changes no later than July 31, 2020. However, nothing is prohibiting a bank from sending a notice sooner if it chooses to do so.

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.

Related Webinar Recording:

Countdown to Reg CC Rule Changes Effective July 1, 2020
The July 1, 2020, launch date for Reg CC rule changes is fast approaching. Last year the CFPB and the Federal Reserve Board jointly published Reg CC amendments that adjust for inflation the dollar amounts that depository institutions must make available to accountholders. Have your systems been updated? Disclosures changed? Staff trained? This jam-packed session will prepare you for these changes and provide a toolkit of charts and examples to make implementation smooth sailing. Purchase the recording today!

By, Amber Seitz