On November 20, the Federal Reserve Board (FRB) and CFPB jointly proposed amendments to Reg. CC, which implements the Expedited Funds Availability Act (EFA Act), and also reopened for public comment various amendments that the FRB had proposed in March of 2011. This new proposal is in addition to the amendments to Reg. CC’s liability provisions that the FRB approved in September, which involved provisions that remain within the FRB’s sole rulemaking authority. In contrast, this more recent proposal relates to EFA Act sections for which the FRB and CFPB have joint rulemaking authority.
First, the FRB/CFPB Reg. CC proposal sets forth a methodology for adjusting a variety of dollar amounts in the EFA Act every five years by the aggregate annual percentage increase in the Consumer Price Index for Wage Earners and Clerical Workers rounded to the nearest multiple of $25. This would implement a statutory requirement under the EFA Act, which was introduced by section 1086(f) of the Dodd-Frank Act, and the proposed effective dates are April 1, 2020 for the first set of adjustments, April 1, 2025 for the next set, and then April 1 every fifth year thereafter. The change would affect various dollar amounts, including the minimum amount of deposited funds that banks must make available for withdrawal by opening of business on the next day, the amount of funds deposited by certain checks in a new account that are subject to next-day availability, and the civil liability amounts for failing to comply with the EFA Act, among others.
Second, the proposal seeks to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amendments to the EFA Act, which include extending coverage to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam. The EGRRCPA amendments subject banks in these jurisdictions to the EFA Act’s requirements related to funds availability, payment of interest, and disclosures. Among other things, the proposed amendments would treat each of these jurisdictions as “states” for purposes of Reg. CC.
Finally, the proposed amendments would make various other technical changes to Reg. CC, including a clarification in the regulation that the FRB and CFPB have joint rulemaking authority under certain provisions of the EFA Act.
As noted above, the FRB and CFPB are also reopening for public comment amendments that that the FRB proposed in 2011. That proposal included changes aimed at encouraging banks to clear and return checks electronically, new provisions governing electronic items cleared through the check-collection system, a shorter safe harbor period for exception holds on deposited funds, and new model disclosure forms. Last week’s announcement states that “there may have been important changes in markets, technology, or industry practice since the public submitted comments seven years ago in response to the Board’s 2011 Funds Availability Proposal,” and notes that now the FRB and CFPB have “assumed joint rulemaking authority with respect to some of those proposed amendments.” Previously submitted comments will remain part of the rulemaking docket.