Compliance Journal May 2025
Special Focus July Effective Date for Inflation Adjustments to Regulation CC and Other Reminders Recently, Regulation CC was amended to adjust certain dollar amounts of what must be made available to customers from a deposit to account for inflation. While this was a regular and anticipated update, the update provides an opportunity to discuss the changes and how they may apply to a bank’s funds availability policy and check hold procedures. This is also an opportunity to discuss Regulation CC change in policy notification requirements, as well as a separate topic, being that of ensuring that bank’s funds availability policy reflects its actual practice. In some circumstances, banks may have a practice that do not match their funds availability policy. This article will discuss Regulation CC from the perspective of inflation adjustments, change in policy notifications, and accuracy of funds availability policies. Inflation Adjustments Every five years, the agencies amend Regulation CC to adjust for inflation dollar amounts relating to availability of funds. In May of 2024, the Board of Governors of the Federal Reserve System (FRB) and the Bureau of Consumer Financial Protection (CFPB) (collectively, the agencies) issued a final rule to amend Regulation CC with inflation adjustments. The effective date for the adjustments is July 1, 2025. However, banks are permitted to implement the changes sooner if so desired. The inflation adjustments for 2025 are as follows: •
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The first $225 becomes $275. • Regulation CC requires the first $100 of a deposit made by check be made available on the next business day. This requirement, often referred to as the “first $100” rule, was adjusted to $200 in 2011, then again to $225 in 2020, and will now become $275 in 2025. • Note that while the amount to be made available has been updated over the years, when reviewing Regulation CC, particularly the commentary to the regulation, this amount may still be referred to as “$100” despite the adjustments made for inflation as discussed. The $450 for non-next day items becomes $550. • Regulation CC provides that cash withdrawals from local and non-local checks need not be available for cash withdrawal until 5:00 p.m. on the day specified in the schedule, but currently, at least $450 of the deposit must be made available for cash withdrawal before 5:00 p.m. This amount increases to $550 in 2025. • Note that this $550 is in addition to the $275 available pursuant to the requirements above. The $5,525 of the “large deposit” exception hold, “new account” exception hold, and the “repeated overdraft” exception hold becomes $6,725. • Regulation CC currently permits an exception hold on large deposits in excess of $5,525, which becomes $6,725 in 2025. • Regulation CC currently permits funds to be held for new accounts in excess of $5,525, which becomes $6,725 in 2025. • Regulation CC currently permits when an account is repeatedly overdrawn, as defined by Regulation CC, for funds to be held in excess of $5,525, which becomes $6,725 in 2025. As of July 1, 2025, the amounts for civil liability in an individual action shall not be greater than $1,350 and $672,950 for class action.