SECTION
229.10—Next-Day Availability
A. Business Days and Banking Days 1. This
section, as well as other provisions of this subpart governing the
availability of funds, provides that funds must be made available
for withdrawal not later than a specified number of business days
following the banking day on which the funds are deposited. Thus,
a deposit is considered made only on a banking day, i.e., a day that
the bank is open to the public for carrying on substantially all of
its banking functions. For example, if a deposit is made at an ATM
on a Saturday, Sunday, or other day on which the bank is closed to
the public, the deposit is considered received on that bank’s
next banking day.
2. Nevertheless, business days are used to determine
the number of days following the banking day of deposit that funds
must be available for withdrawal. For example, if a deposit of a local
check were made on a Monday, the availability schedule requires that
funds be available for withdrawal on the second business day after
deposit. Therefore, funds must be made available on Wednesday regardless
of whether the bank was closed on Tuesday for other than a standard
legal holiday as specified in the definition of “business day.”
9-090.1
1. This paragraph implements the EFA Act’s
requirement for next-day availability for cash deposits to accounts
at a depositary bank “staffed by individuals employed by such
institution.”
2 Under this paragraph, cash deposited in an account at a staffed
teller station on a Monday must become available for withdrawal by
the start of business on Tuesday. It must become available for withdrawal
by the start of business on Wednesday if it is deposited by mail,
at a proprietary ATM, or by other means other than at a staffed teller
station.
9-091
1. The EFA Act provides next-day availability
for funds received for deposit by wire transfer. The regulation uses
the term electronic payment, rather than wire transfer, to include both wire transfers and ACH credit transfers under the
next-day availability requirement. (See discussion of definitions
of automated clearinghouse, electronic payment, and wire transfer in section 229.2.)
2. The EFA Act requires that funds received by wire
transfer be available for withdrawal not later than the business day
following the day a wire transfer is received. This paragraph clarifies
what constitutes receipt of an electronic payment. For the purposes
of this paragraph, a bank receives an electronic payment when the
bank receives both payment in finally collected funds and the payment
instructions indicating the customer accounts to be credited and the
amount to be credited to each account. For example, in the case of
Fedwire, the bank receives finally collected funds at the time the
payment is made. (See 12 CFR 210.31.) Finally collected funds
generally are received for an ACH credit transfer when they are posted
to the receiving bank’s account on the settlement day. In certain
cases, the bank receiving ACH credit payments will not receive the
specific payment instructions indicating which accounts to credit
until after settlement day. In these cases, the payments are not considered
received until the information on the account and amount to be credited
is received.
3. This paragraph also establishes the extent to
which an electronic payment is considered made. Thus, if a participant
on a private network fails to settle and the receiving bank receives
finally settled funds representing only a partial amount of the payment,
it must make only the amount that it actually received available for
withdrawal.
4. The availability requirements of this regulation
do not preempt or invalidate other rules, regulations, or agreements
which require funds to be made available on a more prompt basis. For
example, the next-day availability requirement for ACH credits in
this section does not preempt ACH association rules and Treasury regulations
(31 CFR 210) which provide that the proceeds of these credit payments
be available to the recipient for withdrawal on the day the bank receives
the funds.
9-092
1. The EFA Act generally requires
that funds be made available on the business day following the banking
day of deposit for Treasury checks, state and local government checks,
cashier’s checks, certified checks, teller’s checks, and
on-us checks, under specified conditions. (Treasury checks are checks
drawn on the Treasury of the United States and have a routing number
beginning with the digits 0000.) This section also requires next-day
availability for additional types of checks not addressed in the EFA
Act. Checks drawn on a Federal Reserve Bank or a Federal Home Loan
Bank and U.S. Postal Service money orders also must be made available
on the first business day following the day of deposit under specified
conditions. For the purposes of this section, all checks drawn on
a Federal Reserve Bank or Federal Home Loan Bank that contain in the
MICR line a routing number that is listed in appendix A are subject
to the next-day availability requirement if they are deposited in
an account held by a payee of the check and in person to an employee
of the depositary bank, regardless of the purpose for which the checks
were issued. For all new accounts, even if the new-account exception
is not invoked, traveler’s checks must be included in the $6,725
aggregation of checks deposited on any one banking day that are subject
to the next-day availability requirement. (See section 229.13(a).)
9-093
2. Deposit in Account of Payee One statutory condition to receipt of
next-day availability of Treasury checks, state and local government
checks, cashier’s checks, certified checks, and teller’s
checks is that the check must be “endorsed only by the person
to whom it was issued.” The EFA Act could be interpreted to
include a check that has been indorsed in blank and deposited into
an account of a third party that is not named as payee. The Board
believes that such a check presents greater risks than a check deposited
by the payee and that Congress did not intend to require next-day
availability for such checks. The regulation, therefore, provides
that funds must be available on the business day following deposit
only if the check is deposited in an account held by a payee of the
check. For the purposes of this section, payee does not include transferees
other than named payees. The regulation also applies this condition
to Postal Service money orders and checks drawn on Federal Reserve
Banks and Federal Home Loan Banks.
9-094
3. Deposits Made to an Employee of the Depositary Bank a. In most cases, next-day availability
of the proceeds of checks subject to this section is conditioned on
the deposit of these checks in person to an employee of the depositary
bank. If the deposit is not made to an employee of the depositary
bank on the premises of such bank, the proceeds of the deposit must
be made available for withdrawal by the start of business on the second
business day after deposit, under paragraph (c)(2) of this section.
For example, second-day availability rather than next-day availability
would be allowed for deposits of checks subject to this section made
at a proprietary ATM, night depository, through the mail or a lock
box, or at a teller station staffed by a person who is not an employee
of the depositary bank. Second-day availability may also be allowed
for deposits picked up by an employee of the depositary bank at the
customer’s premises; such deposits would be considered made
upon receipt at the branch or other location of the depositary bank.
Employees of a contractual branch would not be considered employees
of the depositary bank for the purposes of this regulation, and deposits
at contractual branches would be treated the same as deposits to a proprietary
ATM for the purpose of this regulation. (See also the commentary
to section 229.19(a).)
b. In the case of Treasury checks, the EFA Act and
regulation do not condition the receipt of next-day availability to
deposits at staffed teller stations. Therefore, Treasury checks deposited
at a proprietary ATM must be accorded next-day availability, if the
check is deposited to an account of a payee of the check.
9-095
4. On-Us Checks The EFA Act and regulation require next-day availability
for on-us checks, i.e., checks deposited in a branch of the depositary
bank and drawn on the same or another branch of the same bank, if
both branches are located in the same state or check-processing region.
Thus, checks deposited in one branch of a bank and drawn on another
branch of the same bank must receive next-day availability even if
the branch on which the checks are drawn is located in another check-processing
region but in the same state as the branch in which the check is deposited.
For the purposes of this requirement, deposits at facilities that
are not located on the premises of a brick-and-mortar branch of the
bank, such as off-premise ATMs and remote depositories, are not considered
deposits made at branches of the depositary bank.
9-096
5. First $275 a. The EFA Act and regulation also require that up
to $275 of the aggregate deposit by check or checks not subject to
next-day availability on any one banking day be made available on
the next business day. For example, if $70 were deposited in an account
by check(s) on a Monday, the entire $70 must be available for withdrawal
at the start of business on Tuesday. If $400 were deposited by check(s)
on a Monday, this section requires that $275 of the funds be available
for withdrawal at the start of business on Tuesday. The portion of
the customer’s deposit to which the $275 must be applied is
at the discretion of the depositary bank, as long as it is not applied
to any checks subject to next-day availability. The $275 next-day
availability rule does not apply to deposits at nonproprietary ATMs.
b. The $275 that must be made available under this
rule is in addition to the amount that must be made available for
withdrawal on the business day after deposit under other provisions
of this section. For example, if a customer deposits a $1,000 Treasury
check and a $1,000 local check in its account on Monday, $1,275 must
be made available for withdrawal on Tuesday—the proceeds of
the $1,000 Treasury check, as well as the first $275 of the local
check.
c. A depositary bank may aggregate all local and
nonlocal check deposits made by a customer on a given banking day
for the purposes of the $275 next-day availability rule. Thus, if
a customer has two accounts at the depositary bank, and on a particular
banking day makes deposits to each account, $275 of the total deposited
to the two accounts must be made available on the business day after
deposit. Banks may aggregate deposits to individual and joint accounts
for the purposes of this provision.
d. If the customer deposits a $550 local check and
gets $275 cash back at the time of deposit, the bank need not make
an additional $275 available for withdrawal on the following day.
Similarly, if the customer depositing the local check has a negative
book balance, or negative available balance in its account at the
time of deposit, the $275 that must be available on the next business
day may be made available by applying the $275 to the negative balance,
rather than making the $275 available for withdrawal by cash or check
on the following day.
9-097
6. Special Deposit Slips a. Under
the EFA Act, a depositary bank may require the use of a special deposit
slip as a condition to providing next-day availability for certain
types of checks. This condition was included in the EFA Act because
many banks determine the availability of their customers’
check deposits in an automated manner by reading the MICR-encoded
routing number on the deposited checks. Using these procedures, a
bank can determine whether a check is a local or nonlocal check, a
check drawn on the Treasury, a Federal Reserve Bank, a Federal Home
Loan Bank, or a branch of the depositary bank, or a U.S. Postal Service
money order. Appendix A includes the routing numbers of certain categories
of checks that are subject to next-day availability. The bank cannot
require a special deposit slip for these checks.
b. A bank cannot distinguish whether the
check is a state or local government check, cashier’s check,
certified check, or teller’s check by reading the MICR-encoded
routing number, because these checks bear the same routing number
as other checks drawn on the same bank that are not accorded next-day
availability. Therefore, a bank may require a special deposit slip
for these checks.
c. The regulation specifies that if a bank decides
to require the use of a special deposit slip (or a special deposit
envelope in the case of a deposit at an ATM or other unstaffed facility)
as a condition to granting next-day availability under paragraphs
(c)(1)(iv) or (c)(1)(v) of this section or second day availability
under paragraph (c)(2) of this section, and if the deposit slip that
must be used is different from the bank’s regular deposit slips,
the bank must either provide the special slips to its customers or
inform its customers how such slips may be obtained and make the slips
reasonably available to the customers.
d. A bank may meet this requirement by providing
customers with an order form for the special deposit slips and allowing
sufficient time for the customer to order and receive the slips before
this condition is imposed. If a bank provides deposit slips in its
branches for use by its customers, it also must provide the special
deposit slips in the branches. If special deposit envelopes are required
for deposits at an ATM, the bank must provide such envelopes at the
ATM.
e. Generally, a teller is not required to advise
depositors of the availability of special deposit slips merely because
checks requiring special deposit slips for next-day availability are
deposited without such slips. If a bank provides the special deposit
slips only upon the request of a depositor, however, the teller must
advise the depositor of the availability of the special deposit slips,
or the bank must post a notice advising customers that the slips are
available upon request. Such notice need not be posted at each teller
window, but the notice must be posted in a place where consumers seeking
to make deposits are likely to see it before making their deposits.
For example, the notice might be posted at the point where the line
forms for teller service in the lobby. The notice is not required
at any drive-through teller windows nor is it required at night depository
locations, or at locations where consumer deposits are not accepted.
If a bank prepares a deposit for a depositor, it must use a special
deposit slip where appropriate. A bank may require the customer to
segregate the checks subject to next-day availability for which special
deposit slips could be required, and to indicate on a regular deposit
slip that such checks are being deposited, if the bank so instructs
its customers in its initial disclosure.
7. Dollar Amount Adjustment See section 229.11 for the rules regarding
adjustments for inflation every five years to the dollar amounts used
in this section.