Pub. 14 2019-2020 Issue 4

NEBRASKA BANKERS ASSOCIATION 23 First, you will have to work with vendors to update software that determines availability. Also, banks should consider necessary changes to their Funds Availability Policy disclosures before implementation. Jennifer Kirby, CRCM, Virtual Compliance Officer. Jennifer has over 15 years’ experience in the financial services industry. She began her career with a national bank in San Antonio, Texas, while receiving her bachelor of business administration degree in finance. She continued her interest in finance through law school and focused her course work on creditor and transactional issues. While in law school, Jennifer worked at a commercial litigation law firm with a specific focus on creditor's rights and collection litigation matters. Since 2011, Jennifer has been part of the team of attorneys and compliance experts who develop all of C/A's wide range of products and tools for bank personnel. As implemented through this final rule, the first adjustments will change the: • $100 amount (amended to $200 in the EFA Act by the DoddFrankAct in2011) 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. The newly adjusted amounts are effective on July 1, 2020. The second set of adjustmentswill be effective July 1, 2025, andwill be based on underlying inflation fromJuly 2018 through July 2023. The third andfinal set of adjustmentswill be effective July 1, 2030, andwill be based on inflation fromJuly 2023 through July 2028. The amendments that went into effect Sept. 3, 2019, were tech- nical. It’s the July 1, 2020, changes that you need to think about. With systems to update, disclosures to change and staff to train, this deadline will be here before you know it! First, you will have to work with vendors to update software that determines avail- ability. Also, banks should consider necessary changes to their Funds Availability Policy disclosures before implementation. It is also important tonote, changes to abank’s funds availabilitypolicy to reflect the inflation adjustments will trigger the Regulation CC change-in-terms notice requirements. Regulation CC § 229.18(e) requires adepository institution to sendcustomers anotice regard- ing a change to the bank’s funds-availability policy at least 30days 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 senda change-in-terms notice.”Achange-in-terms noticemay be provided electronically in compliancewith theElec- tronic Signatures in Global and National Commerce Act (E-Sign Act) and may be sent on or with a monthly account statement. Furthermore, staff will need to be trained. Now, let’s go over some questions that we have received on the hotline. Q1: I received the Compliance Alliance email concerning the inflation adjustment amendments issued to Reg CC. We understand that these changes will not be effective until July 1, 2020, but are wondering if we can make these changes early? We are in the process of changing our fee schedule and plan on doing a special mailing to notify our customers of the changes. We were thinking if we could also include the new funds avail- ability schedule as well, we could save on postage rather than doing a second special mailing next year. Would this be allowed? A1: Although early compliance is not addressed in the final rule, the bank is always welcome to make more funds available than what is required by Reg CC. The bank would want to be sure to give notice within 30 days of changing its policy. Q2: Are case-by-case holds included in the July 1, 2020, Reg CC changes? A2: If your bank has adopted an availability policymore favor- able than that requiredunderRegulationCC, itmay delay availabil- ity, but only up to themaximumtime frame allowed by Regulation CC. This means that if your bank offers next day availability, but it decides to delay availability, it must still make $200 available on the next business day. On July 1, 2020, the $200 amount will increase to $225. So, your policy regarding longer delays will need tobe updated to reflect this new$225 amount. This alsomeans that your funds availability policy disclosure will need to be updated, and a change in terms notice will need to be provided. Q3: Can our Funds Availability Policy Disclosure include the phrase “minimum amount required by regulation” rather than setting forth an actual dollar figure? A3: Banks should not provide funds availability policy dis- closure that includes such a phrase. The Agencies believe that it would result in consumer customer confusion. Specifically, the Agencies believe that one of the purposes of the statute is that consumers be informed of the specific amount of deposits available to themunder an institution's funds-availability policy. If you have any questions related to the upcoming Reg. CC changes, don’t hesitate to contact us on the C/A hotline at hot- line@compliancealliance.com or (888) 353-3933. 