Reg. CC – Will You Be Ready?
You may recall late last year Reg. CC surfaced again with proposals to implement Dodd Frank requirements and the reopening of the comment period for previous proposals dating back to 2011. This past summer the final rule was issued accommodating provisions from the Dodd-Frank Act, the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), along with a couple of related housekeeping changes to Reg. DD - Truth In Savings.
The changes seem reasonable and minor. However, just as a pebble hitting the surface of a still pond creates never ending ripples, these changes have a ripple effect that will require a good bit of effort and planning to implement.
Let’s look at the first change, inflation adjustment. We all recall The Dodd-Frank Wall Street Reform and Consumer Protection Act. Within that Act was a provision to amend the Expedited Funds Availability Act (aka Reg. CC) to adjust the dollar amount that must be made available for withdrawal with certain deposit transactions. The adjustment is based on inflation and adjusted every five (5) years. It will correspond with the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The annual adjustments will be rounded to the nearest multiple of $25 and will increase, but not decrease the amount that must be made available.
Here is where the ripple comes into play. The mandatory compliance date is July 1, 2020. That seems like plenty of time, right? Consider the impact to account opening documents, Funds Availability Disclosures, Lobby Notices, Funds Availability Policy (will require Board approval), and procedure changes. Don’t forget upgrades to your teller and possibly core systems for holds, autogenerated notices and any manual forms and notices your tellers may complete. Also, you will need to provide notice to your customers regarding the change, as required. In addition, training will be key and any cheat sheets your frontline personnel use to calculate the correct amount to make available will need to be updated. Suddenly July 1st seems way too soon.
Definition – Expands to Additional Territories
The agencies also included changes to accommodate the EGRRCPA with regard to extending the coverage in the definition of “ATM”, “State” and “United States” to include American Samoa, the Commonwealth of the Northern Mariana Islands and Guam. Be sure to check your policy and disclosures to ensure any definitions referencing these terms are updated.
Reg. CC – Affects Reg. DD
The ripple continues with technical updates necessary to other regulations. Reg. DD contains references to Reg. CC. Technical changes are necessary to reflect the joint authority between the Bureau and the Board to issue regulations under certain provisions of Reg. CC- Expedited Funds Availability Act. The Bureau also took this as an opportunity to correct typographical errors in the APY and APYE calculations in Appendix A to Reg. DD.
While the changes certainly aren’t anywhere near TRID on the compliance shock scale, they will require implementation planning and time. So, don’t wait around, go ahead and get a plan together to implement these changes. Trust me July 1, 2020 is just around the corner.