Collapse to view only § 4004. Disclosure of funds availability policies
- § 4001. Definitions
- § 4002. Expedited funds availability schedules
- § 4003. Safeguard exceptions
- § 4004. Disclosure of funds availability policies
- § 4005. Payment of interest
- § 4006. Miscellaneous provisions
- § 4007. Effect on State law
- § 4008. Regulations and reports by Board
- § 4009. Administrative enforcement
- § 4010. Civil liability
§ 4001. DefinitionsFor purposes of this chapter—
(1) Account
(2) Board
(3) Business day
(4) Cash
(5) Cashier’s checkThe term “cashier’s check” means any check which—
(A) is drawn on a depository institution;
(B) is signed by an officer or employee of such depository institution; and
(C) is a direct obligation of such depository institution.
(6) Certified checkThe term “certified check” means any check with respect to which a depository institution certifies that—
(A) the signature on the check is genuine; and
(B) such depository institution has set aside funds which—
(i) are equal to the amount of the check; and
(ii) will be used only to pay such check.
(7) Check
(8) Check clearinghouse association
(9) Check processing region
(10) Consumer account
(11) Depository check
(12) Depository institution
(13) Local originating depository institution
(14) Noncash itemThe term “noncash item” means—
(A) a check or other demand item to which a passbook, certificate, or other document is attached;
(B) a check or other demand item which is accompanied by special instructions, such as a request for special advise of payment or dishonor; or
(C) any similar item which is otherwise classified as a noncash item in regulations of the Board.
(15) Nonlocal originating depository institution
(16) Proprietary ATMThe term “proprietary ATM” means an automated teller machine which is—
(A) located—
(i) at or adjacent to a branch of the receiving depository institution; or
(ii) in close proximity, as defined by the Board, to a branch of the receiving depository institution; or
(B) owned by, operated exclusively for, or operated by the receiving depository institution.
(17) Originating depository institution
(18) Nonproprietary ATM
(19) ParticipantThe term “participant” means a depository institution which—
(A) is located in the same geographic area as that served by a check clearinghouse association; and
(B) exchanges checks through the check clearinghouse association, either directly or through an intermediary.
(20) Receiving depository institution
(21) State
(22) Teller’s check
(23) United States
(24) Unit of general local government
(25) Wire transfer
(Pub. L. 100–86, title VI, § 602, Aug. 10, 1987, 101 Stat. 635; Pub. L. 115–174, title II, § 208(a)(1), May 24, 2018, 132 Stat. 1312.)
§ 4002. Expedited funds availability schedules
(a) Next business day availability for certain deposits
(1) Cash deposits; wire transfersExcept as provided in subsection (e) and in section 4003 of this title, in any case in which—
(A) any cash is deposited in an account at a receiving depository institution staffed by individuals employed by such institution, or
(B) funds are received by a depository institution by wire transfer for deposit in an account at such institution,
such cash or funds shall be available for withdrawal not later than the business day after the business day on which such cash is deposited or such funds are received for deposit.
(2) Government checks; certain other checksFunds deposited in an account at a depository institution by check shall be available for withdrawal not later than the business day after the business day on which such funds are deposited in the case of—
(A) a check which—
(i) is drawn on the Treasury of the United States; and
(ii) is endorsed only by the person to whom it was issued;
(B) a check which—
(i) is drawn by a State;
(ii) is deposited in a receiving depository institution which is located in such State and is staffed by individuals employed by such institution;
(iii) is deposited with a special deposit slip which indicates it is a check drawn by a State; and
(iv) is endorsed only by the person to whom it was issued;
(C) a check which—
(i) is drawn by a unit of general local government;
(ii) is deposited in a receiving depository institution which is located in the same State as such unit of general local government and is staffed by individuals employed by such institution;
(iii) is deposited with a special deposit slip which indicates it is a check drawn by a unit of general local government; and
(iv) is endorsed only by the person to whom it was issued;
(D) the first $200 deposited by check or checks on any one business day;
(E) a check deposited in a branch of a depository institution and drawn on the same or another branch of the same depository institution if both such branches are located in the same State or the same check processing region;
(F) a cashier’s check, certified check, teller’s check, or depository check which—
(i) is deposited in a receiving depository institution which is staffed by individuals employed by such institution;
(ii) is deposited with a special deposit slip which indicates it is a cashier’s check, certified check, teller’s check, or depository check, as the case may be; and
(iii) is endorsed only by the person to whom it was issued.
(b) Permanent schedule
(1) Availability of funds deposited by local checks
(2) Availability of funds deposited by nonlocal checks
(3) Time period adjustments for cash withdrawal of certain checks
(A) In general
(B) 5 p.m. cash availability
(C) $200 availability
(4) Applicability
(c) Temporary schedule
(1) Availability of local checks
(A) In general
(B) Time period adjustment for cash withdrawal of certain checks
(i) In general
(ii) 5 p.m. cash availability
(iii) $200 availability
(2) Availability of nonlocal checks
(3) Applicability
(d) Time period adjustments
(1) Reduction generally
(2) Extension for certain deposits in noncontiguous States or territoriesNotwithstanding any other provision of law, any time period established under subsection (b), (c), or (e) shall be extended by 1 business day in the case of any deposit which is both—
(A) deposited in an account at a depository institution which is located in Alaska, Hawaii, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, or the Virgin Islands; and
(B) deposited by a check drawn on an originating depository institution which is not located in the same State, commonwealth, or territory as the receiving depository institution.
(e) Deposits at ATM
(1) Nonproprietary ATM
(A) In general
(B) Deposits described in this paragraph 1
1 So in original. Probably should be “subparagraph”.
A deposit is described in this subparagraph if it is—(i) a cash deposit;
(ii) a deposit made by a check described in subsection (a)(2);
(iii) a deposit made by a check drawn on a local originating depository institution (other than a check described in subsection (a)(2)); or
(iv) a deposit made by a check drawn on a nonlocal originating depository institution (other than a check described in subsection (a)(2)).
(2) Proprietary ATM—temporary and permanent schedules
(3) Study and report on ATM’s
(f) Check return; notice of nonpaymentNo provision of this section shall be construed as requiring that, with respect to all checks deposited in a receiving depository institution—
(1) such checks be physically returned to such depository institution; or
(2) any notice of nonpayment of any such check be given to such depository institution within the times set forth in subsection (a), (b), (c), or (e) or in the regulations issued under any such subsection.
(Pub. L. 100–86, title VI, § 603, Aug. 10, 1987, 101 Stat. 637; Pub. L. 101–625, title X, § 1001, Nov. 28, 1990, 104 Stat. 4424; Pub. L. 102–242, title II, § 227(a), (b)(1), Dec. 19, 1991, 105 Stat. 2307; Pub. L. 111–203, title X, § 1086(a), (e), July 21, 2010, 124 Stat. 2085, 2086; Pub. L. 115–174, title II, § 208(a)(2), May 24, 2018, 132 Stat. 1312.)
§ 4003. Safeguard exceptions
(a) New accountsNotwithstanding section 4002 of this title, in the case of any account established at a depository institution by a new depositor, the following provisions shall apply with respect to any deposit in such account during the 30-day period (or such shorter period as the Board, jointly with the Director of the Bureau of Consumer Financial Protection, may establish) beginning on the date such account is established—
(1) Next business day availability of cash and certain itemsExcept as provided in paragraph (3), in the case of—
(A) any cash deposited in such account;
(B) any funds received by such depository institution by wire transfer for deposit in such account;
(C) any funds deposited in such account by cashier’s check, certified check, teller’s check, depository check, or traveler’s check; and
(D) any funds deposited by a government check which is described in subparagraph (A), (B), or (C) of section 4002(a)(2) of this title,
such cash or funds shall be available for withdrawal on the business day after the business day on which such cash or funds are deposited or, in the case of a wire transfer, on the business day after the business day on which such funds are received for deposit.
(2) Availability of other items
(3) Limitation relating to certain checks in excess of $5,000In the case of funds deposited in such account during such period by checks described in subparagraph (C) or (D) of paragraph (1) the aggregate amount of which exceeds $5,000—
(A) paragraph (1) shall apply only with respect to the first $5,000 of such aggregate amount; and
(B) not more than 8 business days shall intervene between the business day on which any such funds are deposited and the business day on which such excess amount shall be available for withdrawal.
(b) Large or redeposited checks; repeated overdraftsThe Board, jointly with the Director of the Bureau of Consumer Financial Protection, may, by regulation, establish reasonable exceptions to any time limitation established under subsection (a)(2), (b), (c), or (e) of section 4002 of this title for—
(1) the amount of deposits by one or more checks that exceeds the amount of $5,000 in any one day;
(2) checks that have been returned unpaid and redeposited; and
(3) deposit accounts which have been overdrawn repeatedly.
(c) Reasonable cause exception
(1) In general
(2) Basis for determination
(3) Overdraft feesIf the receiving depository institution determines that a check deposited in an account is a check described in paragraph (1), the receiving depository institution shall not assess any fee for any subsequent overdraft with respect to such account, if—
(A) the depositor was not provided with the written notice required under subsection (f) (with respect to such determination) at the time the deposit was made;
(B) the overdraft would not have occurred but for the fact that the funds so deposited are not available; and
(C) the amount of the check is collected from the originating depository institution.
(4) Compliance
(d) Emergency conditionsSubject to such regulations as the Board, jointly with the Director of the Bureau of Consumer Financial Protection, may prescribe, subsections (a)(2), (b), (c), and (e) of section 4002 of this title shall not apply to funds deposited by check in any receiving depository institution in the case of—
(1) any interruption of communication facilities;
(2) suspension of payments by another depository institution;
(3) any war; or
(4) any emergency condition beyond the control of the receiving depository institution,
if the receiving depository institution exercises such diligence as the circumstances require.
(e) Prevention of fraud losses
(1) In generalThe Board, jointly with the Director of the Bureau of Consumer Financial Protection, may, by regulation or order, suspend the applicability of this chapter, or any portion thereof, to any classification of checks if the Board, jointly with the Director of the Bureau of Consumer Financial Protection, determines that—
(A) depository institutions are experiencing an unacceptable level of losses due to check-related fraud, and
(B) suspension of this chapter, or such portion of this chapter, with regard to the classification of checks involved in such fraud is necessary to diminish the volume of such fraud.
(2) Sunset provision
(3) Report to Congress
(A) Notice of each suspension
(B) Contents of reportEach report under subparagraph (A) shall contain—
(i) the specific reason for prescribing the regulation or issuing the order;
(ii) evidence considered by the Board, jointly with the Director of the Bureau of Consumer Financial Protection, in making the determination under paragraph (1) with respect to such regulation or order; and
(iii) specific examples of the check-related fraud giving rise to such regulation or order.
(f) Notice of exception; availability within reasonable time
(1) In generalIf any exception contained in this section (other than subsection (a)) applies with respect to funds deposited in an account at a depository institution—
(A) the depository institution shall provide notice in the manner provided in paragraph (2) of—
(i) the time period within which the funds shall be made available for withdrawal; and
(ii) the reason the exception was invoked; and
(B) except where other time periods are specifically provided in this chapter, the availability of the funds deposited shall be governed by the policy of the receiving depository institution, but shall not exceed a reasonable period of time as determined by the Board, jointly with the Director of the Bureau of Consumer Financial Protection.
(2) Time for noticeThe notice required under paragraph (1)(A) with respect to a deposit to which an exception contained in this section applies shall be made by the time provided in the following subparagraphs:
(A) In the case of a deposit made in person by the depositor at the receiving depository institution, the depository institution shall immediately provide such notice in writing to the depositor.
(B) In the case of any other deposit (other than a deposit described in subparagraph (C)), the receiving depository institution shall mail the notice to the depositor not later than the close of the next business day following the business day on which the deposit is received.
(C) In the case of a deposit to which subsection (d) or (e) applies, notice shall be provided by the depository institution in accordance with regulations of the Board, jointly with the Director of the Bureau of Consumer Financial Protection.
(D) In the case of a deposit to which subsection (b)(1) or (b)(2) applies, the depository institution may, for nonconsumer accounts and other classes of accounts, as defined by the Board, that generally have a large number of such deposits, provide notice at or before the time it first determines that the subsection applies.
(E) In the case of a deposit to which subsection (b)(3) applies, the depository institution may, subject to regulations of the Board, provide notice at the beginning of each time period it determines that the subsection applies. In addition to the requirements contained in paragraph (1)(A), the notice shall specify the time period for which the exception will apply.
(3) Subsequent determinations
(Pub. L. 100–86, title VI, § 604,
§ 4004. Disclosure of funds availability policies
(a) Notice for new accounts
(b) Preprinted deposit slips
(c) Mailing of notice
(1) First mailing after enactment
(2) Subsequent changes
(3) Upon request
(d) Posting of notice
(1) Specific notice at manned teller stations
(2) General notice at automated teller machines
(e) Notice of interest payment policy
(f) Model disclosure forms
(1) Prepared by Board and Bureau
(2) Use of forms to achieve complianceA depository institution shall be deemed to be in compliance with the requirements of this section if such institution—
(A) uses any appropriate model form or clause as published by the Board, jointly with the Director of the Bureau of Consumer Financial Protection,,1
1 So in original.
or(B) uses any such model form or clause and changes such form or clause by—
(i) deleting any information which is not required by this chapter; or
(ii) rearranging the format.
(3) Voluntary use
(4) Notice and comment
(Pub. L. 100–86, title VI, § 605, Aug. 10, 1987, 101 Stat. 644; Pub. L. 111–203, title X, § 1086(c), July 21, 2010, 124 Stat. 2086.)
§ 4005. Payment of interest
(a) In general
(b) Special rule for credit unions
Subsection (a) shall not apply to an account at a depository institution described in section 461(b)(1)(A)(iv) of this title if the depository institution—
(1) begins the accrual of interest or dividends at a later date than the date described in subsection (a) with respect to all funds, including cash, deposited in such account; and
(2) provides notice of the interest payment policy in the manner required under section 4004(e) of this title.
(c) Exception for checks returned unpaid
(Pub. L. 100–86, title VI, § 606, Aug. 10, 1987, 101 Stat. 646.)
§ 4006. Miscellaneous provisions
(a) After-hours deposits
(b) Availability at start of business day
(c) Effect on policies of depository institutionsNo provision of this chapter shall be construed as—
(1) prohibiting a depository institution from making funds available for withdrawal in a shorter period of time than the period of time required by this chapter; or
(2) affecting a depository institution’s right—
(A) to accept or reject a check for deposit;
(B) to revoke any provisional settlement made by the depository institution with respect to a check accepted by such institution for deposit;
(C) to charge back the depositor’s account for the amount of such check; or
(D) to claim a refund of such provisional credit.
(d) Prohibition on freezing certain funds in an account
(e) Employee training on and compliance with requirements of this chapterEach depository institution shall—
(1) take such actions as may be necessary fully to inform each employee (who performs duties subject to the requirements of this chapter) of the requirements of this chapter; and
(2) establish and maintain procedures reasonably designed to assure and monitor employee compliance with such requirements.
(f) Adjustments to dollar amounts for inflation
(Pub. L. 100–86, title VI, § 607, Aug. 10, 1987, 101 Stat. 646; Pub. L. 111–203, title X, § 1086(f), July 21, 2010, 124 Stat. 2086.)
§ 4007. Effect on State law
(a) In general
Any law or regulation of any State in effect on September 1, 1989, which requires that funds deposited or received for deposit in an account at a depository institution chartered by such State be made available for withdrawal in a shorter period of time than the period of time provided in this chapter or in regulations prescribed by the Board under this chapter (as in effect on September 1, 1989) shall—
(1) supersede the provisions of this chapter and any regulations by the Board to the extent such provisions relate to the time by which funds deposited or received for deposit in an account shall be available for withdrawal; and
(2) apply to all federally insured depository institutions located within such State.
(b) Override of certain State laws
(Pub. L. 100–86, title VI, § 608, Aug. 10, 1987, 101 Stat. 647.)
§ 4008. Regulations and reports by Board
(a) In generalAfter notice and opportunity to submit comment in accordance with section 553(c) of title 5
(1) to carry out the provisions of this chapter;
(2) to prevent the circumvention or evasion of such provisions; and
(3) to facilitate compliance with such provisions.
(b) Regulations relating to improvement of check processing systemIn order to improve the check processing system, the Board shall consider (among other proposals) requiring, by regulation, that—
(1) depository institutions be charged based upon notification that a check or similar instrument will be presented for payment;
(2) the Federal Reserve banks and depository institutions provide for check truncation;
(3) depository institutions be provided incentives to return items promptly to the depository institution of first deposit;
(4) the Federal Reserve banks and depository institutions take such actions as are necessary to automate the process of returning unpaid checks;
(5) each depository institution and Federal Reserve bank—
(A) place its endorsement, and other notations specified in regulations of the Board, on checks in the positions specified in such regulations; and
(B) take such actions as are necessary to—
(i) automate the process of reading endorsements; and
(ii) eliminate unnecessary endorsements;
(6) within one business day after an originating depository institution is presented a check (for more than such minimum amount as the Board may prescribe)—
(A) such originating depository institution determines whether it will pay such check; and
(B) if such originating depository institution determines that it will not pay such check, such originating depository institution directly notify the receiving depository institution of such determination;
(7) regardless of where a check is cleared initially, all returned checks be eligible to be returned through the Federal Reserve System;
(8) Federal Reserve banks and depository institutions participate in the development and implementation of an electronic clearinghouse process to the extent the Board determines, pursuant to the study under subsection (f), that such a process is feasible; and
(9) originating depository institutions be permitted to return unpaid checks directly to, and obtain reimbursement for such checks directly from, the receiving depository institution.
(c) Regulatory responsibility of Board for payment system
(1) Responsibility for payment systemIn order to carry out the provisions of this chapter, the Board of Governors of the Federal Reserve System shall have the responsibility to regulate—
(A) any aspect of the payment system, including the receipt, payment, collection, or clearing of checks; and
(B) any related function of the payment system with respect to checks.
(2) Regulations
(d) Reports
(1) Implementation progress reports
(A) Required reports
(B) Contents of reportEach such report shall describe—
(i) the actions taken and progress made by the Board to implement the schedules established in section 4002 of this title, and
(ii) the impact of this chapter on consumers and depository institutions.
(2) Evaluation of temporary schedule report
(A) Report required
(B) Contents of report
(3) Comptroller General evaluation report
(e) Consultations
(f) Electronic clearinghouse study
(1) Study required
(2) Consultation; factors to be studiedIn connection with the study required under paragraph (1), the Board shall—
(A) consult with appropriate experts in telecommunications technology; and
(B) consider all practical and legal impediments to the development of an electronic clearinghouse process.
(3) Report required
(Pub. L. 100–86, title VI, § 609, Aug. 10, 1987, 101 Stat. 647; Pub. L. 111–203, title X, § 1086(d), July 21, 2010, 124 Stat. 2086.)
§ 4009. Administrative enforcement
(a) Administrative enforcementCompliance with the requirements imposed under this chapter, including regulations prescribed by and orders issued by the Board of Governors of the Federal Reserve System under this chapter, shall be enforced under—
(1) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818] in the case of—
(A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national banks), and offices, branches, and agencies of foreign banks located in the United States (other than Federal branches, Federal agencies, and insured State branches of foreign banks), by the Board of Governors of the Federal Reserve System; and
(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;
(2) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818], by the Director of the Office of Thrift Supervision in the case of savings associations the deposits of which are insured by the Federal Deposit Insurance Corporation; and
(3) the Federal Credit Union Act [12 U.S.C. 1751 et seq.], by the National Credit Union Administration Board with respect to any Federal credit union or insured credit union.
The terms used in paragraph (1) that are not defined in this chapter or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).
(b) Additional powers
(1) Violation of this chapter treated as violation of other Acts
(2) Enforcement authority under other Acts
(c) Enforcement by Board
(1) In general
(2) Additional remedyIf the Board determines that—
(A) any depository institution which is not a depository institution described in subsection (a), or
(B) any other person subject to the authority of the Board under this chapter, including any person subject to the authority of the Board under section 4004(d)(2) or 4008(c) of this title,
has failed to comply with any requirement imposed by this chapter or by the Board under this chapter, the Board may issue an order prohibiting any depository institution, any Federal Reserve bank, or any other person subject to the authority of the Board from engaging in any activity or transaction which directly or indirectly involves such noncomplying depository institution or person (including any activity or transaction involving the receipt, payment, collection, and clearing of checks and any related function of the payment system with respect to checks).
(d) Procedural rules
(Pub. L. 100–86, title VI, § 610, Aug. 10, 1987, 101 Stat. 649; Pub. L. 101–73, title VII, § 744(d), Aug. 9, 1989, 103 Stat. 438; Pub. L. 102–242, title II, § 212(h), Dec. 19, 1991, 105 Stat. 2303.)
§ 4010. Civil liability
(a) Civil liabilityExcept as otherwise provided in this section, any depository institution which fails to comply with any requirement imposed under this chapter or any regulation prescribed under this chapter with respect to any person other than another depository institution is liable to such person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a result of the failure;
(2)
(A) in the case of an individual action, such additional amount as the court may allow, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000; or
(B) in the case of a class action, such amount as the court may allow, except that—
(i) as to each member of the class, no minimum recovery shall be applicable; and
(ii) the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same depository institution shall not be more than the lesser of $500,000 or 1 percent of the net worth of the depository institution involved; and
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.
(b) Class action awardsIn determining the amount of any award in any class action, the court shall consider, among other relevant factors—
(1) the amount of any actual damages awarded;
(2) the frequency and persistence of failures of compliance;
(3) the resources of the depository institution;
(4) the number of persons adversely affected; and
(5) the extent to which the failure of compliance was intentional.
(c) Bona fide errors
(1) General rule
(2) Examples
(d) Jurisdiction
(e) Reliance on Board rulings
(f) Authority to establish rules regarding losses and liability among depository institutions
(Pub. L. 100–86, title VI, § 611, Aug. 10, 1987, 101 Stat. 650.)