17.1 Regulation CC Scope, Deposit Days and Next-Day Items

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Statutory Authority and Account Coverage

Regulation CC is organized into four distinct subparts, each addressing specific dimensions of payments law:

• Subpart A (General): Sets forth statutory definitions, administrative authorities, and general provisions (12 CFR §§ 229.1–229.3).
• Subpart B (Availability of Funds and Disclosure of Funds Availability Policies): Implements statutory availability schedules, initial disclosures, change-in-terms rules, exception holds, and hold notices (§§ 229.10–229.21).
• Subpart C (Collection of Checks): Regulates the interbank check collection and return ecosystem, imposing expedited return requirements and warranties on paying and returning banks (§§ 229.30–229.43).
• Subpart D (Substitute Checks): Implements the Check Clearing for the 21st Century Act (Check 21 Act), establishing legal equivalence for paper substitute checks meeting the Check 21 requirements and governing consumer expedited recredit procedures (§§ 229.51–229.60).

Transaction Account Scope: Consumer and Commercial Inclusions

A critical compliance distinction lies in the institutional scope of Subpart B. Under 12 CFR § 229.2(a), the availability schedules and disclosure mandates apply exclusively to transaction accounts as defined in Federal Reserve Regulation D (12 CFR § 204.2(e)). Covered transaction accounts include:

• Demand Deposit Accounts (DDAs): Traditional non-interest-bearing or interest-bearing checking accounts payable on demand.
• Negotiable Order of Withdrawal (NOW) Accounts: Interest-bearing transaction accounts eligible for individuals, non-profit organizations, and governmental entities.
• Automatic Transfer Service (ATS) Accounts: Savings accounts linked to transaction accounts for automatic overdraft protection or fund reallocations.
• Share Draft Accounts: Credit union transaction accounts accessed via draft instruments.

Non-Transaction Account Exclusions

Non-transaction deposit accounts are expressly exempt from Regulation CC Subpart B availability schedules:

• Pure Savings Accounts: Deposit accounts that are not transaction accounts under Regulation D.
• Money Market Deposit Accounts (MMDAs): Savings deposit accounts subject to statutory transfer limitations.
• Time Deposits and Certificates of Deposit (CDs): Accounts with fixed maturity dates or contractual early withdrawal penalties.

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Temporal Definitions: Business Days, Banking Days & Cut-Off Hours

Precise calculation of funds availability deadlines requires a rigorous understanding of the statutory interplay between business days, banking days, and operational cut-off hours.

Business Day Definition (12 CFR § 229.2(g))

A business day is defined as any calendar day other than a Saturday, a Sunday, or a legal federal holiday. Legal federal holidays recognized under federal statute include New Year's Day, Martin Luther King Jr. Day, Washington's Birthday (Presidents' Day), Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Columbus Day (Indigenous Peoples' Day), Veterans Day, Thanksgiving Day, and Christmas Day.

Banking Day Definition (12 CFR § 229.2(f))

A banking day is that portion of any business day on which an office of a bank is open to the public for carrying on substantially all of its banking functions. Banking functions encompass teller services, accepting deposits, paying cash withdrawals, opening accounts, and processing loan transactions.

Operational Interplay and Weekend Branch Hours

While a bank may open its branch lobbies or drive-through teller windows on Saturdays or Sundays, a Saturday or Sunday can never be a business day under Regulation CC:

• If a bank branch is open on a Saturday from 9:00 AM to 1:00 PM for all teller and retail banking operations, Saturday is neither a business day nor a Regulation CC banking day, because a banking day is part of a business day on which the relevant office is open for substantially all banking functions.
• Consequently, deposits accepted by the bank on Saturday are deemed received on the bank's next banking day, which is Monday (or Tuesday if Monday is a federal holiday).
• The statutory availability clock begins on that subsequent banking day (Monday), making funds available according to the schedule computed from Monday as the banking day of deposit.

Cut-Off Hours (12 CFR § 229.19(a))

Financial institutions are permitted to establish operational cut-off hours to divide one banking day from the next:

• Branch Teller Deposits: The bank may establish a cut-off hour of 2:00 PM or later for deposits made in person at a staffed branch teller counter.
• ATM, Night Depository, and Remote Deposits: The bank may establish a cut-off hour of 12:00 PM (noon) or later for deposits received at automated teller machines, night deposit boxes, lockboxes, or through remote deposit capture (RDC).
• Post-Cut-Off Rule: Any deposit received after the bank's established cut-off hour (or on a weekend or legal holiday) is treated as received at the opening of the bank's next banking day.

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Statutory Funds Availability Schedules

Regulation CC establishes strict schedules dictating the maximum time a bank may hold funds deposited into a transaction account before granting the customer unrestricted withdrawal access.

Next-Business-Day Availability Items (12 CFR § 229.10)

Under 12 CFR § 229.10, certain deposit types carry minimal collection risk and must be made available for withdrawal no later than the first business day following the banking day of deposit:

1. Electronic Payments (§ 229.10(b)): Preauthorized automated clearing house (ACH) credit transfers and wholesale wire transfers (e.g., Fedwire) must be made available for cash withdrawal and transaction clearing on the business day following the banking day on which the bank receives the electronic transfer.
2. Cash Deposits (§ 229.10(a)): U.S. currency deposited in person to an employee of the depositary bank must be available on the next business day. Cash deposited at a proprietary ATM or night depository must be available no later than the second business day following the banking day of deposit.
3. U.S. Treasury Checks (§ 229.10(c)(1)(i)): Checks drawn on the United States Treasury and deposited into an account held by the named payee must be available on the next business day, regardless of whether deposited in person or at a proprietary ATM.
4. U.S. Postal Service Money Orders (§ 229.10(c)(1)(ii)): Postal money orders deposited in person into an account of the named payee must be available on the next business day (second business day if deposited at a proprietary ATM).
5. Federal Reserve and Federal Home Loan Bank Checks (§ 229.10(c)(1)(iii)): Checks drawn on a Federal Reserve Bank or Federal Home Loan Bank deposited in person into an account of the named payee require next-day availability.
6. State and Local Government Checks (§ 229.10(c)(1)(iv)): Checks drawn by a state, county, municipality, or political subdivision qualify for next-business-day availability only if:
   • Deposited in person to an employee of the depositary bank;
   • Deposited into an account held by the named payee;
   • Drawn on an entity located in the same state as the depositary bank; and
   • The bank may require the use of a special deposit slip indicating government status, provided the bank provides such slips or notifies customers of this requirement.
7. Cashier's, Certified, and Teller's Checks (§ 229.10(c)(1)(v)): Official bank checks deposited in person into an account held by the named payee must be available on the next business day. The bank may require special deposit slips if disclosed in its funds availability policy.
8. On-Us Checks (§ 229.10(c)(1)(vi)): Checks drawn on the same bank or a branch of the same depositary bank (on-us items) deposited at a qualifying branch of the same bank are generally available next day; the on-us rule has distinct conditions and is not limited to named-payee accounts.