What's New? Reg CC Threshold Adjustments

The Board of Governors of the Federal Reserve System (Board) and the Consumer Financial Protection Bureau (CFPB) are amending Regulation CC, which implements the Expedited Funds Availability Act (EFA Act), to adjust for inflation dollar amounts relating to availability of funds. In 2019, the Board and the CFPB finalized a rule that formally set a methodology for inflation adjustments which occur every five years. The new threshold amounts may be found in The Gold Book, Electronic Funds Availability Act chapter.

Guidance on Overdraft Protection Practices

The FDIC, OCC and Federal Reserve have recently issued guidance on overdraft protection program practices, risk management, and representment. 

FDIC: Supervisory Guidance on Multiple Re-Presentment NSF Fees

OCC: Overdraft Protection Programs: Risk Management Practices

Federal Reserve: Supervisory Observations on Representment Fees

Also see The Gold Book for continuing updates:

Checking Accounts: Overdraft Protection Programs

Electronic Collection of Fees

Considerations for Economic Impact Payments

Signed in March 2020, the CARES Act provides Economic Impact Payments (EIPs) to qualified consumers. The government is disbursing EIPs to people based on information contained within their 2018 or 2019 federal tax returns. Both electronic and physical EIPs are distributed in weekly cycles. As these stimulus funds begin to be distributed to individuals, certain questions and risks have arisen that financial institutions need to consider.

EIP Automated Clearing House (ACH) direct deposits returned by an institution will be redistributed as a physical check payment. Use caution when an EIP is received for deceased accountholders. EIPs are not subject to reclamation of funds by the Treasury Department and should be handled in accordance with the institution’s existing controls.

There are cases where an electronic EIP is received for a closed account. An institution may risk reputational harm returning the EIP if the closed account relates to an existing customer that’s readily identifiable. However, an institution may expose itself to liability if it distributes the funds to an incorrect party. Careful analysis should be performed with proper documentation if an institution chooses not to automatically return the EIP.

As a Receiving Depository Financial Institution (RDFI), the institution is protected by safe harbor if it exactly processes and posts the EIP in accordance with the instructions accompanying the transaction entry. Any change in depositing the funds into an account other than that received in the transaction entry, or subsequently transferring the funds to another account, will create potential liability. 

EIPs are not protected from offset by the financial institution for outstanding debts or overdrafts. New York has passed restrictions prohibiting institutions from claiming EIPs for such purposes. Institutions should review their core system settings to ensure that EIPs are not automatically applied to such pre-existing negative account balances. Different systems may require different process solutions.

As EIPs have Social Security Numbers (SSN) included in the payment transaction information, institutions must review IT controls to determine whether the SSN information will carry into the recording and reporting of the EIP through its online statements, physical paper statements, and mobile banking services. Fraud may exist in the creation of fraudulent EIP checks or the fraudulent transacting of valid EIP checks. Multiple deposits of EIP checks through remote deposit capture or mobile banking channels are other concerns that should be considered. Communication and training on potential fraud and identity theft red flags will be essential in combatting these risks.

What's New? Reg. CC

On June 24, 2019, the Consumer Financial Protection Bureau (the Bureau) and the Federal Reserve Board (the Board) jointly announced a final rule amending Regulation CC. The final rule includes the COLA changes required by the Dodd-Frank Act as well as certain amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

The COLA changes are effective July 1, 2020 and may be found in The Gold Book.

What's New? Prepaid Accounts Rule

Revised interagency examination procedures for Regulation E, Regulation Z and Regulation X were released. These procedures relate to the creation of comprehensive consumer protections for prepaid accounts. 

A prepaid account, (also called a prepaid card or a stored-value card) is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds can be withdrawn and deposited straight from the card.

See The Gold Book for more information. 

FinCEN E-Filing Reminder

Financial institutions are reminded that they must have begun to use the new FinCEN reports, which are available only electronically through the BSA E-Filing System, by April 1, 2013.

Please see The Gold Book, Bank Secrecy chapter for details.

FDIC Regulatory Calendar

As part of its FDIC Community Banking Initiatives, the FDIC launched a draft online regulatory calendar to help community banks stay up-to-date on changes in federal banking laws, regulations, and supervisory guidance. 

The calendar includes notices of proposed, interim, and final rulemakings; supervisory guidance to financial institutions issued by the FDIC and FFIEC; and joint issuances with other regulators that do not fall under the auspices of the FFIEC. It also includes selected items from other regulators relevant to the FDIC's supervisory examination programs.

The calendar is available athttp://www.fdic.gov/regulations/resources/cbi/calendar.html.

Deposit Insurance on Non-Interest Bearing Accounts

Pursuant to Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts (NIBTAs), including Interest on Lawyer Trust Accounts, is scheduled to expire on December 31, 2012. Absent a change in law, beginning January 1, 2013, the FDIC no longer will provide separate, unlimited deposit insurance coverage for NIBTAs at insured depository institutions (IDIs). IDIs are encouraged to take reasonable steps to provide adequate advance notice to NIBTA depositors of the changes in FDIC insurance coverage so that they may consider the impact of any change in coverage in their management of these transaction accounts.

The FDIC has provided FAQs on the changes and notifications required by the end of next month.

Click here: FDIC: FIL-45-2012: Notice of Expiration: Temporary Unlimited Coverage for Noninterest-Bearing Transaction Accounts

CFPB Remittance Rule Guide Available

The Consumer Financial Protection Bureau(CFPB) has published an International Fund Transfers Small Entity Compliance Guide to assist small businesses in complying with the new remittance rule, which takes effect February 7, 2013. Read more here.

Web Site Accessibility Standards

There are no uniformly-accepted standards that determine the accessibility to web site-based services for persons with disabilities.  The Americans with Disabilities Act of 1990 (“ADA”) provides safe-harbors for providing accessibility to physical banking locations. Proposed ADA rulemaking addresses the requirements for making goods, services, facilities, privileges and accommodations via the internet. For more details, see Websitesunder the Americans with Disabilities Actin the Compliance chapterof The Gold Book. 

FDIC Issues Two New Deposit Insurance Resources

The FDIC has developed two new resources to help bank employees and depositors understand FDIC deposit insurance coverage: (1) a large-print version of the brochure Your Insured Deposits and (2) a computer-based, interactive training module called FDIC Deposit Insurance Coverage for Bankers.

Insured institutions may access and order the FDIC's two new deposit insurance resources on the FDIC's Web site at www.fdic.gov/deposit/deposits/.

International Collections

A new chapter, International Collections, has been added to The Gold Book. The uniform rules, published by the International Chamber of Commerce (ICC) outline interbank collection procedures for foreign deposits. The Gold Book highlights excerpts of the general provisions governing international collections.

Overnight overdraft policy changes

Earlier this month, the Federal Reserve Board announced two modifications to its overnight overdraft policy that will take effect on July 12, 2012. These modifications are (1) a change in the reference rate for computing charges for overnight overdrafts from the effective federal funds rate to the primary credit rate and (2) a multi-day charge on overnight overdrafts incurred immediately before a weekend or holiday.

What's New: Federal Reserve Holiday Schedule

The Federal Reserve holiday schedule has been updated through 2015.

Deposit Insurance Coverage for Noninterest-Bearing Transaction Accounts Free Nationwide Seminars for Bank Employees

The FDIC will host two identical telephone seminars for bank officers and employees that will explain the insurance coverage rules and disclosure requirements regarding the new temporary unlimited insurance coverage for noninterest-bearing transaction accounts at all FDIC-insured depository institutions. Each seminar will consist of a 30-minute audio and slide presentation, followed by a one-hour question-and-answer period. The seminars, which are free to officers and employees of FDIC-insured banks and savings associations, will be conducted on December 14 and December 16, 2010.

For registration information, visit this FDIC link.

Overdraft Payment Programs and Consumer Protection Final Overdraft Payment Supervisory Guidance

The FDIC expects financial institutions' boards of directors and management to ensure that the institution mitigates the risks associated with offering automated overdraft payment programs and complies with all consumer protection laws and regulations, including providing clear and meaningful disclosures and other communications about overdraft payment programs, fees, and other features and options, and demonstrating compliance with new opt-in requirements for automated teller machine (ATM) withdrawals and one-time point-of-sale debit card transactions. In addition, the FDIC expects financial institutions to:

• Promptly honor customers' requests to decline coverage of overdrafts (i.e., opt-out) resulting from non-electronic transactions;


• Give consumers the opportunity to affirmatively choose the overdraft payment product that overall best meets their needs;


• Monitor accounts and take meaningful and effective action to limit use by customers as a form of short-term, high-cost credit, including, for example, giving customers who overdraw their accounts on more than six occasions where a fee is charged in a rolling twelve-month period a reasonable opportunity to choose a less costly alternative and decide whether to continue with fee-based overdraft coverage;


• Institute appropriate daily limits on overdraft fees; and consider eliminating overdraft fees for transactions that overdraw an account by a de minimis amount; and


• Not process transactions in a manner designed to maximize the cost to consumers.

For more on the topic, visit The Gold Book chapters: Bounce Protection and Overdraft Services Consent.

What's New: FDIC Changes and Notice Requirements

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) yesterday approved a final rule to implement section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The final rule revises the FDIC's deposit insurance regulations to include non-interest bearing transaction accounts as a new temporary deposit insurance account category. All funds held in such accounts are fully insured, without limit, and this coverage is separate from, and in addition to, the coverage provided to depositors for other accounts at an insured depository institution. This separate coverage will become effective on December 31, 2010, and will end on December 31, 2012.

Non-interest bearing accounts include only traditional, non-interest bearing demand deposit (or checking) accounts that allow for an unlimited number of transfers and withdrawals at any time, whether held by a business, individual or other type of depositor.

Insured institutions are required to notify customers of these changes by December 31. 2010.

For details, see Coverage of Non-Interest Bearing Transaction Accounts in the Federal Deposit Insurance section of The Gold Book.

The Department of Justice Has Adopted Revised ADA Standards

Revised ADA regulations were issued on September 15, 2010 and take effect March 15, 2011. Compliance with the 2010 Standards for Accessible Design is permitted as of September 15, 2010, but not required until March 15, 2012. The Department of Justice has prepared fact sheets identifying the major changes in the rules (available at http://www.ada.gov/). Financial institutions seeking to replace/purchase ATM equipment should review the new guidelines and check with ATM vendors for hardware and software requirements.

See American Disabilities Act for more information.

New Power of Attorney Law Amendments

The NYS Power of Attorney laws that became effective September 1, 2009 were amended with a new law effective September 12, 2010.   The revisions to the power of attorney law are technical amendments and clarifications to certain sections of the law and the POA form to promote a better understanding of how the power of attorney (POA) rules work. Statutory short forms executed on or after September 12 must reflect the changes. Changes were also made to the Statutory Gifts Rider.

See Power of Attorney - New York Rules for additional information.

FDIC Board Adopts Final Rule Extending Tag Program

The FDIC  has adopted a final rule extending the Transaction Account Guarantee (TAG) program for six months, from July 1, 2010 through December 31, 2010. Under the TAG program, customers of participating insured depository institutions are provided full coverage on qualifying transaction accounts.

FDIC Chairman Sheila Bair said: "While I believe that the TAG program has proven to be critical to ensuring our financial system's stability, it was established as a temporary program. Ultimately, it should be up to Congress to determine our insurance limits. Adoption of this final rule allows the opportunity for Congress to conclude its current deliberations relative to this program."

The final rule, adopted after a public comment period, is almost identical to the interim rule adopted on April 13, 2010. The rule requires that interest rates on qualifying NOW accounts offered by banks participating in the program be reduced to 0.25 percent from 0.5 percent. It requires TAG assessment reporting based on average daily account balances but makes no changes to the assessment rates for participating institutions. The rule also provides for an additional extension of the program, without further rulemaking, for a period of time not to exceed December 31, 2011.

See the FDIC chapter of The Gold Book for further details on the TAG program and FDIC coverage in general.