On November 21, 2018 the Bureau of Consumer Financial Protection (the Bureau) and the Federal Reserve Board (FRB), collectively the Agencies, proposed amendments to Regulation CC, the implementing regulation for the Expedited Funds Availability (EFA) Act, that would allow for adjustments in amount of funds depository institutions must make available to customers.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the EFA Act giving joint rulemaking authority to the Bureau and the Board for funds-availability schedules, disclosure policies, payment of interest, and other provisions implemented by Regulation CC. The Dodd-Frank Act amendments require the EFA Act dollar amounts to be adjusted every five years based on the annual percentage increase of Consumer Price Index for Urban Wage Earners or CPI-W, rounded to the nearest multiple of $25. The Agencies are proposing a new § 229.11 under Regulation CC to implement the CPI-W index calculation method to be used to adjust the dollar amounts in the EFA Act.
The Agencies anticipate publishing the first set of adjustments as a final rule in the first quarter of 2019. In order to provide financial institutions sufficient time to implement the adjustments, they propose that the first set of adjustments have an effective date of April 1, 2020. Based on the required five year intervals of adjustment, the second set of adjustments would occur in the first quarter of 2024, with an effective date of April 1, 2025. For subsequent adjustments, the Agencies propose that each set of adjustments have an effective date of April 1 of every fifth year after 2025.
The Agencies are also:
- Proposing amendments to Regulation CC which would extending coverage of the EFA Act to American Samoa, the Commonwealth of Northern Mariana Islands, and Guam, pursuant to the EFA Act amendments by the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA);
- Proposing technical amendments to Regulation CC commentary containing dollar amounts to cross reference the proposed 229.11 calculation method, updated dollar amounts, and references to the Board and FRB’s joint rulemaking authority under certain provisions.
- Proposing to amend the definition of “ATM” to include “located in the United States” pursuant to EGRRCPA;
- Providing for an additional comment period on certain funds-availability amendments in subpart B of Regulation CC that the Board published in 2011 regarding funds availability schedule provisions and associated definitions; and
- [The Bureau] Proposing a technical amendment to its Regulation DD that would:
- Cross-reference the Bureau’s joint authority with the FRB to issue regulations under certain provisions of the EFA Act, Regulation CC;
- States that interest shall begin to accrue not later than the business day specified for interest-bearing accounts in the EFA Act and Regulation CC; and
- Correct technical errors in the formulas in Appendix A to Regulation DD that demonstrate how to calculate annual percentage yield (APY) and annual percentage yield earned (APYE).
The proposed rule is available here.