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Final Rule Technical Amendments to Availability of Funds and Collection of Checks (Regulation CC)1

REGULATORY ALERT

NATIONAL CREDIT UNION ADMINISTRATION
1775 Duke Street, Alexandria, VA 22314

DATE: November 2009 LETTER No.: 09-RA-14
TO: All Federally-Insured Credit Unions
SUBJ: Final Rule Technical Amendments to Availability of Funds and Collection of Checks (Regulation CC)1
Dear Board of Directors:
 
The purpose of this Regulatory Alert is to notify credit unions the Board of Governors of the Federal Reserve System (Board) recently issued a final rule amending Regulation CC. Credit unions should assess the final rule’s impact on their funds availability policies and schedules, and provide any required notice of changes to members.2 The Board believes no additional burden is imposed on a depository institution by amendments in the final rule. Depository institutions are already required to have procedures in place to notify members when a change in funds availability occurs.
 
The final rule amends Regulation CC’s routing number guide to next-day availability checks and local checks. The routing number changes are a result of the Board restructuring check-processing operations within the Federal Reserve System. The final rule also includes advanced notice the Federal Reserve’s check-processing infrastructure will become a single check-processing region in early 2010. A single check-processing region will result in checks no longer being considered nonlocal for purposes of Regulation CC. A single check-processing region will subject some checks to faster funds availability schedules.
 
In November 2008, the Board initially announced decreases in check volume necessitated transition to a single check-processing site. The Board’s check-processing operations restructuring responds to:
 
  • Continued nationwide decline in check usage;
  • Rapidly increasing use of electronic check clearing methods; and, 
  • Cost recovery provisions of the Monetary Control Act of 1980.
 
 
The following chart summarizes changes to check-processing operation locations included in the final rule.  
 
Federal Reserve Bank Check-Processing
Operations Restructuring Changes**
 
Action
Transfer from Federal Reserve Bank Location
Transfer to Federal Reserve Bank Location
Effective
Date
Check-processing operations location transfer
From:
Head Office of the Federal Reserve Bank of Dallas
To:
Head Office of Federal Reserve Bank of Cleveland3
October 17, 2009
Check-processing operations location transfer
From:
Los Angeles Branch Office of the Federal Reserve Bank of San Francisco
To:
Head Office of Federal Reserve Bank of Cleveland
November 14, 2009
**Note: Restructuring changes in the table above will result in some checks drawn on and deposited at banks4 located in Dallas, Los Angeles, and Cleveland check-processing regions becoming local checks subject to faster availability schedules. The final rule includes routing number guide changes to determine next-day availability checks and local checks.
 
If you have questions concerning these Regulation CC amendments, please do not hesitate to contact your NCUA regional office or state supervisory authority.
Sincerely,
 
/s/
 
Debbie Matz
Chairman

 

 1  12 CFR Part 229 –Availability of Funds and Collection of Checks (Regulation CC) is available at: http://www.federalreserve.gov/bankinforeg/reglisting.htm
 2  Section 229.18(e) of Regulation CC requires banks notify account holders who are consumers within 30 days after implementing a change improving the availability of funds.
 3  On August 14, 2009, the Federal Reserve Banks, by letter, informed depository institutions within Dallas’s check-processing region of the October 17, 2009 transfer of check-processing operations from Dallas to the Cleveland check-processing operation.
 4  For purposes of Regulation CC, the term “bank” includes credit unions.