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The Expedited Funds Availability Act and the Check Clearing for the 21st Century Act, implemented through Regulation CC, impose requirements regarding the maximum length of hold periods that can be placed on deposited funds before the funds are available for withdrawal by the customer, stipulate disclosure requirements that must be made available, and set standards for check endorsements, substitute checks, and timely check returns. Subpart B relating to the availability of funds affects all transaction accounts and all deposit accounts are affected by Subpart D relating to substitute checks.
First State Bank’s policy is to generally make funds from deposits available to the customer on the first business day after the day we receive the deposit. For determining the availability of deposits, every day is a business day, except Saturday, Sunday, and federal holidays. If the deposit is made before our 5:00 p.m. cutoff on a day we are open, that day will be the day of deposit. If the deposit is made after 5:00 p.m. or on a day that we are not open (e.g. deposits dropped in the night depository or at an ATM that accepts deposits), the day of deposit will be the next business day that we are open.
First State Bank reserves the right to hold funds on a case-by-case basis according to the permanent availability schedule of Regulation CC which generally allows the first $225 availability of checks deposited on the first business day, second business day availability for the remainder of the checks deposited. Electronic deposits (ACH) will be made available on the effective date of the deposit. These guidelines will be used for both checking and savings accounts. In addition to case-by-case holds, the Bank may place exception holds, which would make funds available on the seventh business day after the date of deposit (or long if applicable). Any time the Bank uses an exception hold, the Bank will provide the customer a reason for placing the exception hold. If the Bank decides to hold funds on a customer’s deposit, the Bank will give to the customer a written hold notice at the time of the deposit. If the Bank decides to place the hold after the customer has left the premises, the notice will be provided by mail to the address listed on the bank records for the customer. The notice will state the customer’s name, account number, the date of deposit, the amount of funds being delayed, and the day that the funds will be available for withdrawal. If the hold fits into the exception category, the reason for the hold will also be stated. The Bank may vary these procedures when providing emergency condition hold notices to customers in accordance with and under the circumstances permitted in Regulation CC. The Bank will maintain copies of all notices for a period of two (2) years.
If the Bank cashes a check that is drawn on another bank, the Bank may withhold the availability of a corresponding amount of funds that are already on deposit with the Bank. Those funds will be available at the time funds from the cashed check would have been available if it had been deposited.
If the Bank accepts for deposit a check that is drawn on another bank, the Bank may make funds from the deposit available for withdrawal immediately but delay the availability to withdraw a corresponding amount of funds that may be on deposit in another account at the Bank. The funds in the other account would then be available for withdrawal under the same schedule as would have been applicable to the check deposited in the first account.
Regulation CC allows special standard for new accounts. First State Bank will generally place a hold on accounts where the customer has no other transaction accounts that have been open with us for 30 days or more. Cash and electronic deposits (ACH) will be available on the next business day. The following special rules may apply during the first 30 days after a new account is opened. The first $5,525.00 from a deposit of U.S. Treasury checks
will be available on the first business day after the day of the deposit. The excess over $5,525 will be available on the ninth business day after the day of the deposit. Funds from wire transfers will be available on the first business day after the day the transfer is received. Funds from deposits of cash and the first $5,525 of a day’s total deposits of Cashier’s, certified, tellers’, traveler’s, or state and local government checks will be available on the first business day after the day of the deposit if the deposit meets certain conditions, e.g. the checks must be payable to the account holder. The excess over $5,525 will be available on the ninth business day after the day of deposit. If the deposit is not made in person to a bank employee, the first $5,252 will not be available until the second business day after the day of deposit. Funds from all other check deposits will be available on the eleventh business day after the day of deposit.
The Bank is permitted to extend by one business day the time that funds deposited in an account by one or more checks are available for withdrawal by cash or similar means. Similar means include electronic payment, issuance of a cashier’s or teller’s check, certification of a check, or other irrevocable commitment to pay, but does not include the granting of credit to a bank, a Federal Reserve Bank, or a Federal Home Loan Bank that presents a check to the depositary bank for payment. However, the Bank is required to make $450 of these funds available for withdrawal by cash or similar means not later than 5 p.m. on the business day on which the funds are available. This $450 is in addition to the $225 available.
Customers who have existing transaction accounts with us in good standing (defined as open at least one year and having 3 or fewer NSF items in the last year), may be given immediate availability of funds on any subsequent accounts they may open with us on a case-by-case basis. Approval or waiver of this policy and any holds must be approved by an officer named in the authorization list. If holds are placed on subsequent accounts, funds shall be made available according to the permanent availability schedule of Regulation CC. For those customers who have existing transaction accounts open less than one year or greater than one year with more than 3 NSF items, case-by-case holds will be placed on deposits made into any subsequent accounts they may open with us. Approval or waiver of this policy and any holds must be approved by an officer named in the authorization list
The Bank’s funds availability disclosures will be made available to anyone requesting a copy and will be given to anyone opening a new account. The Banks will also conspicuously display in the Bank’s lobby a notice that states the availability times for deposits. Notices will be posted at each ATM that accepts deposits explaining that funds deposited through the ATM may not be available for immediate withdrawal. The Bank will ensure that all preprinted deposit slips furnished to customers will contain the statement, “Deposits may not be available for immediate withdrawal.”
The Bank will work with customers to get checks properly indorsed in the area reserved for that purpose. As bank of first deposit, the Bank will follow the guidelines for indorsements as set forth in Appendix D of Regulation CC.
If the Bank decides to return an incoming check for any reason, it will be returned to the bank of first deposit as expeditiously as possible. For any check in excess of $2,500, the Bank will notify the depository bank of the return and reason on the same day the decision is made to return the item. The Bank will use the Federal Reserve Bank’s large item notification system for these items. The Bank will notify its own customer when a check previously deposited by the customer has been returned. These items will be charged to the customer’s account and mailed back to the customer the following day after they are received and a notice has been printed. If the Bank receives a large item notification of chargeback before the actual check is received, the Bank will notify the customer of the incoming chargeback.
First State Bank recognizes that substitute checks as defined by Subpart D of Regulation CC are the legal equivalent of the original check. The Bank is an “image only” bank with no exceptions allowed for customers to receive original checks and deposit slips back with their statement. Customers may occasionally receive substitute checks as return items and will receive the substitute check disclosures citing their rights under Subpart D of Regulation CC with the notice of chargeback and the substitute check. These items will be charged to the customer’s account and mailed the following day after the Bank receives the item and a notice has been printed.
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