CFPB AND FRB FINALIZE REGULATION CC CHANGES

On Monday, June 24, 2019, the Consumer Financial Protection Bureau (CFPB) and Federal Reserve Board (FRB) finalized amendments to Regulation CC, which implements the Expedited Funds Availability Act of 1987 (EFA Act). The amendments institute a Dodd-Frank Act statutory requirement to adjust for inflation the amount of funds depository institutions must make available to their customers. The amendments also extend coverage of the EFA Act to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act.

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. As implemented through this final rule, the first adjustments will change the:

  • $100 amount (amended to $200 in the EFA Act by the Dodd Frank Act in 2011) in § 229.10, 229.12, 229.13 to $225;
  • $400 amount in § 229.12(d) to $450;
  • $5,000 amount in § 229.13(a),(b), and (d) to $5,525; and
  • $1,000 and $500,000 amounts in § 229.21(a) to $1,100 and $552,500.

Depository institutions should consider necessary changes to their Regulation CC/Funds Availability policy disclosures and posted notices, if applicable, prior to implementation. It is also important to note, changes to an institution’s funds availability policy to reflect the inflation adjustments will trigger the Regulation CC change-in-terms notice requirements. Regulation CC § 229.18(e) requires a depository institution to send customers a notice regarding a change to the bank’s funds-availability policy at least 30 days before implementing a change and not later than 30 days after implementation for any change which expedites the availability of funds. The final rule makes it clear that, “…[t]he changes to the availability policies to reflect the statutorily-required inflation adjustments, as implemented by this final rule, would trigger the requirement to send a change-in-terms notice.” A change-in-terms notice may be provided electronically in compliance with the Electronic Signatures in Global and National Commerce Act (E-Sign Act) and may be sent on or with a monthly account statement.

The newly adjusted thresholds are effective on July 1, 2020. Amendments to definitions in §§ 12 CFR 229.2(c), (ff), and (jj), amendments related to the extension of the EFA Act to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam found in 229.12(e) and 229.43, and technical amendments in 12 CFR Part 1030 are effective 60 days after date of publication in the federal register.

The final rule is available here: https://files.consumerfinance.gov/f/documents/cfpb_regulation-cc-amendments-joint-fr-notice.pdf.

 

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