In a letter to the Consumer Financial Protection Bureau and the Federal Reserve today, the American Bankers Association offered feedback on the Fed’s 2011 proposal regarding funds availability under Reg CC (Expedited Funds Availability Act) which was reopened for comment in November. The agencies simultaneously proposed a method for adjusting the regulation’s dollar amounts for inflation which is required every five years, pursuant to the Dodd-Frank Act.
ABA expressed general support for the proposed calculation methodology and emphasized that the final rule should allow at least one year to implement and that the timing of any other disclosure changes should be tied to the inflation adjustments to avoid unnecessary costs and burdens.
With respect to the 2011 proposal, the association called on the agencies to retain the seven-day extended hold period, which the Fed had previously proposed shortening to four days. ABA explained that the longer period is necessary to protect bank customers from check fraud that is directly linked to rules that require banks to provide access to check deposits before they can learn the check is unpayable. ABA added that customers generally have quick access to their deposits because banks rarely place extended holds.
Finally, ABA called on the agencies to provide relief to banks by allowing commercial customers to elect to agree to a threshold amount for adjusting deposit discrepancies.