17.2 Initial-Dollar Availability, Ordinary Checks and Policy Disclosures

The Statutory Initial Dollar Amount Rule (§ 229.10(c)(1)(vii))

For all check deposits that do not otherwise qualify for next-day availability under § 229.10, the bank must make up to $275 of the aggregate check deposits available on the next business day following the banking day of deposit.

• Inflation Indexing: Originally established at $100 by the EFAA, the statutory amount was increased to $200 by the Dodd-Frank Act and is indexed for inflation every five years under Regulation CC joint rules, currently standing at $275.
• Aggregate Daily Limit: The $275 rule applies in the aggregate across all non-next-day checks deposited by a customer on a single banking day, not on a per-check basis.

Second-Business-Day Availability for Local Checks (12 CFR § 229.12)

All check deposits not qualifying for next-business-day availability are subject to the second-business-day availability schedule under 12 CFR § 229.12:

• Unified Local Check Rule: Historically, Regulation CC distinguished between "local checks" (drawn on banks in the same Federal Reserve check processing region, subject to a 2-day schedule) and "non-local checks" (drawn across regions, subject to a 5-day schedule). With check imaging modernization under Check 21 and the consolidation of Federal Reserve check processing into a single national facility in Cleveland, all checks clearing within the United States are now classified as local checks.
• Standard Availability: The remainder of funds deposited by check (after releasing the initial $275) must be made available for withdrawal no later than the second business day following the banking day of deposit.

Cash Withdrawal Availability Rules (12 CFR § 229.12(d))

For checks subject to second-business-day availability, Regulation CC provides a specialized sub-schedule for physical cash withdrawals:

• On the next business day following deposit, the initial $275 must be available for all withdrawal purposes, including cash.
• On the second business day following deposit, the bank must make up to $550 available for cash withdrawals at teller counters or ATMs by 5:00 PM (or the bank's close of business), while the entire remaining balance of the check must be available for non-cash transactions (such as check writing, ACH debits, and bill payments).
• The remainder of the deposit must be available for cash withdrawal on the third business day following the banking day of deposit.

---

Mandatory Disclosures and Policy Notifications

Depository institutions must maintain an active compliance program to ensure accurate, timely disclosure of funds availability policies to all transaction account holders.

Initial Disclosures (12 CFR § 229.17, § 229.18)

• Timing: A financial institution must provide a written disclosure describing its specific funds availability policy prior to opening a transaction account.
• Remote Openings: If an account is opened by telephone or the permitted written-request process, the disclosure must be mailed or delivered electronically no later than the first business day following the day the account is opened.
• Content: Disclosures must clearly detail the bank's availability schedules, cut-off hours, exception hold practices, case-by-case hold policies, and procedures for obtaining immediate credit.

Branch Lobby, ATM & Deposit Slip Notices (12 CFR § 229.18)

• Posted Lobby Notices (§ 229.18(b)): The bank must post a conspicuous notice at all locations where retail deposits are accepted (including teller counters, customer service desks, and drive-through lanes) stating the bank's general availability policy.
• ATM Notices (§ 229.18(c)): The bank must post or display a conspicuous notice on all proprietary automated teller machines stating that funds deposited at the ATM may not be available for immediate withdrawal.
• Preprinted Deposit Slips (§ 229.18(a)): All preprinted deposit slips provided by the bank must incorporate a clear notice stating: "Deposits may not be available for immediate withdrawal."

Change-in-Terms Advance Notification (12 CFR § 229.18(e))

Institutions must implement strict change-management procedures when altering funds availability policies:

• Adverse Changes: If the bank modifies its policy to make funds availability more restrictive (e.g., lengthening hold periods, advancing cut-off hours, or transitioning from immediate availability to statutory limits), the bank must provide written notice to all affected account holders at least 30 calendar days prior to the effective date of the change.
• Expedited Availability: If the change expedites availability (e.g., eliminating holds or increasing next-day availability thresholds), notice may be provided no later than 30 calendar days after the change is implemented.

---

Summary of Statutory Availability Schedules