Match up the timelines associated with mandated funds availabilty schedule with the timelines provided by the reg for returning items and you see the issue very clearly.
Could a system be built to clear and validate checks faster? Yes - doesnt sound so difficult ....... but if Reg CC doesn't change it wouldnt close the loophole ......
Banks would love to plug this loophole ....... the issue is that current regulations do not provide them with a method to do so while complying with applicable law. Under current regs banks must make funds available more quickly (with some acceptions) than the windows allotted for items to be returned to them. Shortening the windows for returned items or increasing hold times on deposits would effectively plug the loophole - but in each case their may be a group negatively impacted (ie: small banks and CU's might not be able to meet the tighter timelines or consumers + businesses would have to deal with longer hold times on deposits).
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Re: Re: current Regs are the issue
That is certainly not what i said above ...... banks do provide full disclosure ....... what i was describing was this:
read Reg CC section on funds availability:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f71a7c1a2eb297503a09ecb82b4a3909&rgn=div8&view=text&node=12:3.0.1.1.10.2.8.3&idno=12
then read the following sections of Reg CC related to timelines and responsabilities for returning checks:
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f71a7c1a2eb297503a09ecb82b4a3909&rgn=div8&view=text&node=12:3.0.1.1.10.3.8.1&idno=12
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f71a7c1a2eb297503a09ecb82b4a3909&rgn=div8&view=text&node=12:3.0.1.1.10.3.8.2&idno=12
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f71a7c1a2eb297503a09ecb82b4a3909&rgn=div8&view=text&node=12:3.0.1.1.10.3.8.3&idno=12
Match up the timelines associated with mandated funds availabilty schedule with the timelines provided by the reg for returning items and you see the issue very clearly.
Could a system be built to clear and validate checks faster? Yes - doesnt sound so difficult ....... but if Reg CC doesn't change it wouldnt close the loophole ......
current Regs are the issue
Banks would love to plug this loophole ....... the issue is that current regulations do not provide them with a method to do so while complying with applicable law. Under current regs banks must make funds available more quickly (with some acceptions) than the windows allotted for items to be returned to them. Shortening the windows for returned items or increasing hold times on deposits would effectively plug the loophole - but in each case their may be a group negatively impacted (ie: small banks and CU's might not be able to meet the tighter timelines or consumers + businesses would have to deal with longer hold times on deposits).