Question 1

What is Regulation CC?

Accepted Answer

Regulation CC (12 CFR 229) implements the Expedited Funds Availability Act (EFAA). It governs: the availability of funds deposited in transaction accounts (checking accounts), the collection and return of checks, and the endorsement standards for checks. Key provisions: local checks (funds must be available by the second business day after deposit), non-local checks (funds must be available by the fifth business day), next-day availability (for certain deposits: cash, electronic payments, U.S. Treasury checks, and the first {

Question 2

How It’s Used in Practice

Accepted Answer

In practice, Regulation CC is used by banks and credit unions to manage deposit processing and check clearing efficiently. When a customer deposits a check, the bank applies the appropriate availability schedule to determine when the funds can be withdrawn. Financial institutions must notify customers of any exceptions to standard availability rules, such as large deposits or new accounts. Compliance departments monitor adherence to timelines and procedures to avoid violations. Consumers rely on

Question 3

How does Regulation CC affect Florida real estate closings?

Accepted Answer

RE closing impact: earnest money deposits (the title company or escrow agent deposits the buyer’s check; funds may not be available for 1-5 business days depending on the check type), closing funds (lenders typically require wire transfers or cashier’s checks for closing; personal checks may delay the closing due to hold periods), and disbursement (the closing agent cannot disburse funds until the deposited funds have cleared; this can affect the closing timeline). Best practice: use wire transfers for large closing amounts to avoid holds.

Question 4

What exceptions allow banks to extend the hold period?

Accepted Answer

Exceptions (Section 229.13): banks can extend the hold period for: large deposits (over $5,525; the excess may be held for an additional business day), new accounts (accounts open less than 30 days; all deposits may be held for up to 9 business days), redeposited checks (checks that were previously returned may be held longer), repeated overdrafts (accounts with a history of overdrafts), and reasonable doubt (the bank has reasonable cause to believe the check will not be paid). The bank must: provide notice of the extended hold and explain the reason.

Regulation CC

Regulation CC (Funds Availability)

Availability Schedule

RE Closing Impact

Hold Exceptions

Related Terms

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