Pub. 9 2019 Issue 4

12 www.azbankers.org T HE CONSUMER FINANCIAL PROTECTION BUREAU AND FEDERAL RESERVE BOARD (COLLECTIVELY, THE AGENCIES) ISSUED A FINAL RULE REGARDING INFLATION-BASED ADJUSTMENTS TO THE DOLLAR AMOUNTS REQUIRED BY THE EXPEDITED FUNDS AVAILABILITY ACT (EFA ACT), WHICH IS IMPLEMENTED BY REGULATION CC. THE AGENCIES ALSO AMENDED REGULATION CC TO INCORPORATE THE ECONOMIC GROWTH, REGULATORY RELIEF, AND CONSUMER PROTECTION ACT AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT, WHICH INCLUDE EXTENDING COVERAGE TO AMERICAN SAMOA, THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS AND GUAM, AND CERTAIN OTHER TECHNICAL AMENDMENTS. There have been many questions as to what actually went into effect on September 3, 2019. The final rule states that this rule is effective September 3, 2019, except for the amendments to 12 CFR 229.1, 229.10, 229.11, 229.12(d), 229.21, and appendix E to part 229, which are effective July 1, 2020. To put it another way, all of the amendments go into effect on September 3, 2019, except for the newly adjusted dollar amounts, which are effective July 1, 2020. So, the amendments related to the extension of the EFA Act to Amer- ican Samoa, the Commonwealth of the Northern Mariana Islands, and Guam found in 229.12(e) and 229.43, the definitions of Auto - matic Teller Machine, States, and United States, and the technical amendments to Regulation DD all went into effect on September 3, 2019. The major part of the rule regarding the newly adjusted dollar amounts goes into effect on July 1, 2020. The amendments institute a Dodd-Frank Act statutory requirement to adjust for inflation the amount of funds depository institutions must make available to their customers. The Dodd-Frank Act amendments require the EFA Act dollar amounts to be adjusted ev- ery five years based on the annual percentage increase of Consumer Price Index for Urban Wage Earners, or CPI-W, rounded to the nearest multiple of $25. As implemented through this final rule, the first adjustments will change the: • $100 amount (amended to $200 in the EFA Act by the Dodd- Frank Act in 2011) in § 229.10, 229.12, and 229.13 to $225; • $400 amount in § 229.12(d) to $450; • $5,000 amount in § 229.13(a), (b), and (d) to $5,525; and • $1,000 and $500,000 amounts in § 229.21(a) to $1,100 and $552,500. The newly adjusted amounts are effective on July 1, 2020. The second set of adjustments will be effective July 1, 2025, and will be based on underlying inflation from July 2018 through July 2023. The third and final set of adjustments will be effective July 1, 2030, and will be based on inflation from July 2023 through July 2028. The amendments that went into effect on September 3, 2019, were technical. It’s the July 1, 2020, changes that you need to think about. With systems to update, disclosures to change and staff to train, this deadline will be here before you know it! First, you will have to work with vendors to update software that determines availabil- ity. Also, banks should consider necessary changes to their Funds Availability Policy disclosures prior to implementation. It is also important to note, changes to a bank’s funds availability policy to reflect the inflation adjustments will trigger the Regulation CC Regulation CC Updates — Action Plan and Q&As By Jennifer Kirby