FUNDS AVAILABILITY AND CHECK COLLECTION POLICY
Regulation CC, Expedited Funds Availability Act, 12 CFR 229
The primary purpose of Regulation CC, which implements the Expedited Funds Availability Act (EFAA), is to set limits on how long financial institutions may “hold” funds deposited in transaction accounts before making the funds available to the member. To this end, the regulation sets endorsement standards and establishes procedures for the return of dishonored items. Miami University and Community Federal Credit Union has adopted the following policy to ensure expedited availability of funds and to provide the disclosures required by the EFAA. The President/CEO will assume responsibility for ongoing compliance with the credit union’s funds availability and check collection policy. This authorization includes the authority to conduct, or have conducted, internal audits to ensure full compliance with the EFAA, and to establish operating procedures to ensure that its requirements are fully implemented.
Our Policy is to delay the availability of funds from your cash and check deposits in accordance with Regulation CC. If apply the rules of Regulation CC results in a delay, during the delay, you may not withdraw the funds in cash and we will not use the funds to pay checks that you have written.
The specific goals of the Miami University and Community Federal Credit Union funds availability and check collection policy are to:
- Make funds available to members as quickly as possible, within the constraints of Regulation CC, while protecting the credit union from possible loss.
- Disclose the funds availability policy to all members by providing clear concise schedules in a form that they may keep.
- Require and provide notification when next-day availability is withheld.
- Establish a training program for employees who administer and implement the policy.
Determining the Availability of a Deposit
When we delay the availability of a deposit the length of the delay is determined by counting the business days from the day of your deposit. Every day is a business day except Saturdays, Sundays and federal holidays. If you make a deposit before close of business at a staffed facility or before 2:00 p.m. at an ATM that we own or operate on a business day that we are open, we will consider that day to be the day of your deposit. However, if you make a deposit after our cutoff hour or on a day we are not open, we will consider that the deposit was made on the next business day we are open.
The length of the delay varies depending on the type of deposit and is explained below.
Availability and Delays:
Funds from electronic direct deposits to your account as well as funds from the following deposits, when made with one of our employees, will be available on the same business day that we receive the deposit:
- U.S. Treasury checks that are payable to you.
- Wire transfers.
- Checks drawn on Miami University and Community Federal Credit Union.
- Verified state and local government checks and teller checks payable to you.
- Checks drawn on any bank, amount less than $200.
If you do not make your deposit in person to one of our employees (for example, if you mail the deposit), funds from these deposits will be available on or before the first business day after the day we receive your deposit.
Availability of Other Check Deposits
The first $200 from a deposit of checks (other than those described above) will be made available on or before the first business day after the day we are considered to have received your deposit. If we are not going to make all or part of the funds available from your deposit on the same day, we will notify you at the time you make your deposit, and tell you what the hold period will be. Generally, funds from check deposits will be available no later than the day after the seventh business day after the day we are considered to have received your deposit.
- For local check deposits greater than $200.00, a three business day hold will apply (unless a hold on matching funds is applied).
- For non-local check deposits greater than $200.00, a seven business day hold will apply (unless a hold on matching funds is applied).
If we cash a check for you that is drawn on another financial institution, we may withhold the availability of a corresponding amount of funds that are already in your account. Those funds will then be available at the time funds from the check we cashed would have been available if you had deposited it.
- For local check deposits greater than $200.00, a three business day hold will apply.
- For non-local check deposits greater than $200.00, a seven business day hold will apply.
If we accept for deposit a check that is drawn on another financial institution, we may make funds from the deposit available for withdrawal immediately but delay your availability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available for withdrawal until the time periods that are described elsewhere in this Disclosure for the type of check that you deposited.
Longer Delays May Apply
We may delay your ability to withdraw funds deposited by check in your account an additional number of days for these reasons:
- We believe a check you deposit will not be paid, or fraud is suspected.
- You deposit checks totaling more than $5,000.00 on any one (1) day.
- You re-deposit a check that has been returned unpaid.
- You have overdrawn your account repeatedly in the last six (6) months.
- There is an emergency, such as failure of communications or computer equipment.
- The account is new and has been opened for less than 30 days.
- We received notice that the check is being returned unpaid.
- We believe the check deposited will not be paid for one or more of the following reasons which amounts to reasonable cause to doubt the collectability:
- The check is drawn on an account with repeated overdrafts.
- We are unable to verify the endorsement of a joint payee.
- We are unable to verify the maker of the check.
- Some information is not consistent with other information on the check.
- There are erasures or other apparent alterations on the check.
- The routing number on the check is not a current routing number.
- Information from the paying bank indicates the check may not be paid.
We will notify you if we delay your ability to withdraw funds for any of these reasons and we will tell you when we anticipate the funds will be available. If we decide to delay availability of your funds after you complete your deposit, we will mail you a deposit hold notice by the first business day after we decide to take that action.
Special Rules for New Accounts
If you are a new member, the following special rules will apply during the first 30 days your account is open: Funds from electronic direct deposits to your account will be available on the day we receive the deposit. Funds from deposits of cash, wire transfers, and the first $5,000.00 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s, and federal, state, and local government checks will be available on the same business day that we receive your deposit if the deposit meets certain conditions. For example, the checks must be payable to you. The excess over $5,000.00 will be available on the day after the tenth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000.00 will not be available until the second business day after the day of your deposit. Funds from all other check deposits will be available on the day after the tenth business day after the day of your deposit.
Deposits at Nonproprietary ATMs
Funds from any deposit (cash or checks) made at automated teller machines (ATMs) we do not own or operate will not be available until the fifth business day after the date of your deposit. This rule does not apply at ATMs that we own or operate. All ATMs that we own or operate are identified as our machines.
Please remember that even after we have made funds available to you, and you have withdrawn the funds, you are still responsible for checks that are returned to us unpaid, any other resulting problems involving your account, and the availability of funds.
Payment of Dividends
The credit union will begin accruing dividends on divided-bearing transaction accounts on the business day it receives credit for the deposited funds.
In compliance with Federal Reserve requirements, payable-through checks must contain the name, address, and first four digits of the routing number of the paying financial institution, and the phrase “payable through,” followed by the name and address of the payable-through financial institution. This information will be obtained only on payable-through checks.
Checks drawn on a financial institution located outside the U.S. (Foreign Checks) cannot be processed the same as checks drawn on a U.S. financial institution. Foreign checks are exempt from the policies outlined in this Disclosure. Generally, the availability of funds from deposits of foreign checks will be delayed for the time it takes us to collect the funds from the foreign financial institution upon which it was drawn.
Branch and ATM Notices
A notice of the credit union’s availability policy will be posted at each branch location and at proprietary ATM’s. Notices will be in a conspicuous location in branch lobbies and at each ATM.
Miami University and Community Federal Credit Union will meet the following endorsement requirements:
When Acting as the Depository Institution
As the depository institution of checks presented for deposit to member accounts at the credit union, Miami University and Community Federal Credit Union will follow the endorsement standards set forth in Appendix D of Regulation CC, Availability of Funds and Collection of Checks. The content of the endorsement will be located within the area beginning three inches from the leading edge of the check and ending one and one-half inches from the trailing edge of the check. The leading edge is the end of the check where on the front of the check the date and dollar amount are shown.
When Acting as the Paying Institution
When acting as the paying institution, the credit union is not required by Regulation CC to endorse checks, and therefore this endorsement will not be made because it tends to obliterate the endorsement of the depository institution, which can delay the funds transfer. However, when the credit union returns an unpaid item, the fact that the item is being returned and the reason for the return will be clearly stamped on the face (front) of the check.
Miami University and Community Federal Credit Union reserves the right to:
- Accept or reject any check presented.
- Revoke any settlement with respect to a check accepted by us, and to charge back to your account the amount of the check based on the return of the check or a receipt of notice of non-payment of the check, or claim a refund for such credit.
- Require that the space reserved for endorsement by Miami University and Community Federal Credit Union on the back of any check accepted for deposit be free and clear of any prior marking or endorsements.
The chief operating officer will review this policy on an annual basis and recommend to the Board of Directors any changes in the policy deemed necessary to comply with new revisions to the regulation implementing the EFAA and/or when it is felt that the policy should be strengthened or broadened.
Records showing compliance with all EFAA requirements will be retained for two years.
Policy Approved by the MUCFCU Board of Directors, July 18, 2019.