Compliance Blog

Posted by Anthony Demangone

One of the most common compliance mistakes is found within Regulation CC.  It is the dreaded "first $100."   Again, there's wonderful information with in the staff commentary to Regulation CC regarding this requirement.  As always, this is what Regulation CC allows.  You'll always want to look at your own policy and procedures.

• Regulation CC requires that up to $100 of the aggregate deposit by checks not subject to next-day availability on any one banking day be made available on the next business day. The Commentary gives the following examples: If your member deposits $70 in an account by check(s) on a Monday, the entire $70 must be available for withdrawal at the start of business on Tuesday. If $200 were deposited by check(s) on a Monday, this section requires that $100 of the funds be available for withdrawal at the start of business on Tuesday. The portion of the members deposit to which the $100 must be applied is at your discretion, as long as you do not apply it to any checks subject to next-day availability. The $100 next-day availability rule does not apply to deposits at non-proprietary ATMs.

• The $100 that must be made available under this rule is in addition to the amount that must be made available for withdrawal on the business day after deposit under other provisions of Reg CC. For example, if a member deposits a $1,000 Treasury check, and a $1,000 local check in an account on Monday, $1,100 must be made available for withdrawal on Tuesday—the proceeds of the $1,000 Treasury check, as well as the first $100 of the local check.

• Here's one thing that some forget.  You can aggregate all local check deposits made by a member on a given banking day for the purpose of the $100 next-day availability rule. Therefore, if a member has two accounts at your credit union, and on a particular banking day makes deposits to each account, $100 of the total deposited to the two accounts must be made available on the business day after deposit. Credit unions can aggregate deposits to individual and joint accounts for the purposes of this requirement.

• If the member deposits a $500 local check, and gets $100 cash back at the time of deposit, you don't have to make an additional $100 available for withdrawal on the following day. Similarly, if the member depositing the local check has a negative book balance, or negative available balance in its account at the time of deposit, the $100 that must be available on the next business day may be made available by applying the $100 to the negative balance, rather than making the $100 available for withdrawal by cash or check on the following day.

• The first $100 and exception holds.  The "first $100" requirement does not apply during the new account period, nor for the repeated overdraft, reasonable doubt as to collectibility, emergency condition, redeposited checks exception holds.

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NAFCU members: The March 2010 Newsletter is now available.

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NAFCU's Compliance Team is getting ready for our 2010 Regulatory Compliance School, which takes place March 22-26 at the Gaylord National on the Potomac - just outside DC in Maryland.  Steve, Sarah and I will all speak, as will a number of other credit union compliance peeps.  The school is a solid event that can really get a new compliance person up to speed.  And if you sit for exams, you could become an NCCO. If you haven't checked out our NCCO program, take a look at this.  I hope to see many of you there!