On February 26th the concept of non-local checks goes away as the Federal Reserve centralizes all paper check processing in Cleveland. That means that the reference to non-local checks as referenced in the Fed’s Reg CC becomes irrelevant. So, if your credit union has a delayed funds availability policy it will no longer be able to delay the availability of a non-local check for 5 days. The longest delay you’ll be able to have will be 2-day availability, which is what has been allowed for local checks. Many credit unions also have policy providing for the holding of checks on a case-by-case basis or by special exception hold. Since all checks will now be local, disclosures need to be updated, along with disclosures, lobby posters and change notices. Initial funds availability disclosures need to be updated no later than February 26, 2010. A change notice needs to be sent to members within 30 days, or no later March 28th.
For credit unions still needing to make changes, here are a few resources:
- CUNA Mutual sent a detailed Compliance Alert to LoanLiner credit unions on 1/12/10
- LOANLINER credit unions also have access to sample case-by-case and blanket hold change-in-terms notices for guidance in creating communications to members or developing amendments to use with existing disclosures.
- AVCU’s Compliance InfoSight has a Sample Reg CC Policy which was last updated in January to reflect the above referenced changes.
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