FRCC_20221227_omb

Supporting Statement for the
Recordkeeping and Disclosure Requirements Associated with Regulation CC
(FR CC; OMB No. 7100-0235)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Recordkeeping and Disclosure Requirements Associated with
Regulation CC (FR CC; OMB No. 7100-0235). Regulation CC - Availability of Funds and
Collection of Checks (12 CFR Part 229), which implements the Expedited Funds Availability
Act of 1987 (EFA Act)1 and the Check Clearing for the 21 st Century Act of 2003 (Check 21
Act),2 requires banks3 to make funds deposited in transaction accounts available within specified
time periods, disclose their availability policies to customers, and begin accruing interest on such
deposits promptly. The disclosures are intended to alert customers that their ability to use
deposited funds may be delayed, prevent unintentional (and potentially costly) overdrafts, and
allow customers to compare the policies of different banks before deciding at which bank to
deposit funds. Regulation CC also requires notice to the depositary bank and to a customer of
nonpayment of a check. Model disclosure forms, clauses, and notices are appended to the
regulation to ease compliance. Although Regulation CC applies to all banks, the Board accounts
for only the burden imposed on the 686 state member banks and uninsured state branches and
agencies of foreign banks that it supervises.
The estimated total annual burden for the FR CC is 137,840 hours.
Background and Justification
The EFA Act requires banks to provide customers and potential customers specific
written notices and disclosures on the occurrence of specific events, such as opening an account,
delaying availability of the proceeds of a deposited check beyond the usual availability date,
changing the bank’s funds availability policies, or in response to a customer’s request. The
Check 21 Act requires banks to provide a consumer awareness disclosure regarding substitute
checks in certain circumstances. 4 In addition, if a consumer uses the special procedure that the
Check 21 Act provides to resolve errors associated with substitute checks, the Check 21 Act
requires the consumer’s bank to provide a notice to the consumer regarding disposition of the
consumer’s claim. All of the notice and disclosure requirements of Regulation CC, which are
discussed in more detail below, are found expressly in the EFA Act or the Check 21 Act, except
for the notice of a delay under a case-by-case hold policy and the notice of a returned check.
1

See 12 U.S.C. § 4001 et seq.
See 12 U.S.C. § 5001 et seq.
3
For purposes of Regulation CC, banks are commercial banks, savings associations, credit unions, and U.S.
branches and agencies of foreign banks.
4
To facilitate check truncation and electronic check exchange, the Check 21 Act authorizes a new negotiable
instrument called a substitute check and provides that a properly prepared substitute check is the legal equivalent of
the original check for all purposes. A substitute check is a paper reproduction of the original check that can be
processed just like the original check. The Check 21 Act does not require any bank to create substitute checks or to
accept checks electronically.
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As required by the EFA Act, the Board has published model disclosure forms and clauses
to facilitate compliance with the disclosure requirements of that law. The EFA Act specifically
provides that banks are not required to use these model forms and clauses. However, a bank that
uses one of the model forms appropriately is deemed to be in compliance with the EFA Act
disclosure requirements. As required by the Check 21 Act, the Board published a model
disclosure that a bank may, at its option, use as a safe harbor to satisfy the general consumer
awareness disclosure requirements of that law. The Board also published model notices that
banks may use to satisfy their notice obligations regarding substitute check error resolution
claims, but neither the Check 21 Act nor Regulation CC provide a safe harbor for using these
notices.
Description of Information Collection
Recordkeeping Requirements
Section 229.21(g) Record retention
Section 229.21(g) requires banks to retain evidence of compliance for no less than two
years but does not specify the kind of records that must be retained for this purpose. The Board
estimates no additional burden for this requirement because banks are anticipated to retain
records for at least this duration in their usual course of business.
Disclosure Requirements
Section 229.16 Specific availability policy disclosure and Section 229.17 Initial
disclosures
Before accepting a deposit to open a new transaction account, banks must provide written
disclosures stating when deposited funds generally will be available for withdrawal, referred to
as a specific availability-policy disclosure. The disclosure must reflect the availability policy
followed by the bank in most cases, that is, as to most transaction accounts and most deposits
into those accounts. The disclosure must include, to the extent applicable, a desc ription of:
• the categories of deposits or checks the bank uses when it delays availability, how to
determine into which category a check or deposit falls, and when each category of check
or deposit is available for withdrawal,
• any of the exceptions permitted by Regulation CC to the availability requirements of the
regulation that may be invoked by the bank,
• any case-by-case policy of delaying availability longer than the time periods stated in the
specific availability policy, if the specific availability policy makes funds available for
withdrawal sooner than required by Regulation CC, and
• a description of how to differentiate between proprietary and nonproprietary automatic
teller machines (ATMs) if the bank’s availability policy differs between the two.
When a bank receives a written request from someone not in person to open an account
and the request includes a deposit, or a request to transfer funds from another account to make

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the initial deposit, the initial disclosures must be mailed or delivered no later than the next
business day following the banking day on which the request was made.
Sections 229.16 and 229.18(d) Disclosure of specific availability policy to any person
upon request
Section 229.18(d) provides that a bank must provide the specific availability-policy
disclosure described in section 229.16, to any person who makes an oral or written request
regarding the policy.
Section 229.16(c) Longer delays on a case-by-case basis - Notice in specific policy
disclosure
If a bank has a policy of generally making funds available for withdrawal sooner than
required under Regulation CC, but delaying availability on a case-by-case basis, the customer
must receive not only advance notice of the policy (as described above), bu t also notice each
time a delay is imposed. The notice must include the date of deposit, the amount being delayed,
and the date funds will be available for withdrawal. If the notice is not provided at the time of
deposit, it must be mailed or delivered no later than the first business day following the banking
day of the deposit.
Section 229.13(g) Notice of exceptions
Regulation CC permits banks to invoke certain exceptions to the availability schedules
required by the regulation. Whenever a bank invokes such an exception, it must notify the
customer in writing (special rules apply to exceptions pertaining to large dollar deposits and
redeposited checks into non-consumer accounts, as well as an exception pertaining to repeated
overdrafts). The notice must include the date of deposit, the amount being delayed, the reason the
exception was invoked, and when funds will be available for withdrawal. If the notice is not
provided at the time of deposit, it must be mailed or delivered by the later of the first business
day following the banking day of the deposit or the first business day following the day the bank
becomes aware of the facts upon which the exception hold is based.
Section 229.18(a) Notice on preprinted deposit slips
The preprinted deposit slip notice must inform the customer, on the face of the deposit
slip, that deposits may not be available for immediate withdrawal. This notice is a standardized,
machine-generated message on forms the Bank would be using in its normal course of business
and does not change from one individual account to another; thus, the burden for this
requirement is negligible.
Section 229.18(b) Locations where employees accept consumer deposits and Section
229.18(c) Automated teller machines (ATMs)
A bank must post conspicuously in each location where consumers may make deposits a
notice of its funds availability policy for consumer accounts. The notice must be posted so that

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consumers are likely to see it prior to making a deposit. A bank must also ensure that a notice is
posted at all ATMs accepting deposits for the bank that ATM deposits may not be available for
immediate withdrawal. Such notice may be posted on a sign, on the screen of the ATM, or
included on the deposit envelopes provided at the ATM.
Section 229.18(e) Notice of changes in policy
A bank is required to send consumer account holders notice of changes in its availability
policy at least thirty days before the change becomes effective. However, where a change in
policy results in faster availability, the notice may be sent no later than thirty days after the
change.
If a bank provides its customers with a list of ATMs in its availability policy (to fulfill the
requirement that it explain its availability policy for proprietary and nonproprietary ATMs), it
must update the list annually if any changes occurred during the year.
Sections 229.11(c) and 229.18(e) Notices of quinquennial inflation adjustment
The dollar amount adjustments, “inflation adjustment,” are prescribed in a several parts
of section 229. The dollar amounts are indexed to the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. Given the
change in policy caused by the periodic inflation adjustment, Banks will need to update their
disclosures to match the new information.
Sections 229.31(c) and 229.33(h) Notices of nonpayment
Notification to banks - If a bank on which a check is drawn in an amount of $5,000 or
more determines not to pay the check, the bank must notify the depositary bank by 2:00 p.m. on
the second business day after the day of presentment.
Notification to customer - If the depositary bank receives a returned check or notice of
nonpayment, regardless of the amount, it must send notice to its customer generally by midnight
of the banking day following the banking day on which it received the returned check or notice
(a longer time than may be deemed reasonable in some cases). The Board estimates no additional
burden for this requirement because, were the requirement not to exist, banks presumably would
nonetheless provide a similar notification to customers in the usual and customary course of their
business. While a specific time period is required, such notice is anticipated to be largely
automated.
Sections 229.54(a) and (b)(2) Expedited recredit for consumers
This section of the rule provides that a consumer may make an expedited recredit claim
with respect to a substitute check if the consumer asserts in good faith that (1) the bank holding
the consumer’s account charged that account for a substitute check that was provided to the
consumer (although the consumer need not be in possession of the substitute check at the time he
or she submits a claim), (2) the substitute check was not properly charged to the consumer

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account or the consumer has a “warranty claim”5 with respect to the substitute check, (3) the
consumer suffered a resulting loss, and (4) production of the original check or a sufficient copy
of the original check is necessary to determine whether or not the substitute check in fact was
improperly charged or whether the consumer’s warranty claim is valid.
The consumer’s claim must include certain information described in the Check 21 Act
and section 229.54 of Regulation CC.
Section 229.54(e) Notices relating to consumer expedited recredit claims (validation,
denial, or reversal)
This notice is required when a bank validates, denies, or reverses a consumer’s recredit
claim. Although the statute does not explicitly discuss providing a notice when a bank validates a
claim, the bank’s ability to respond to a claim by determining that the claim is valid is implicit in
the “timing of the recredit” section of the statute (section 7(c)(2)(A)), which requires the bank to
provide a recredit the day after it determines that the consumer’s claim is valid.
If a bank determines that the consumer’s claim is invalid, the bank must provide the
consumer with the original check or a copy of the original check sufficient to determine the
validity of the claim and must demonstrate why the substitute check was properly charged to the
consumer account. The bank must either demonstrate that a charge was proper or ex plain why
the warranty claim is not valid, as appropriate in light of the consumer’s claim.
Section 229.55 Expedited recredit claim for banks
This section of the EFA Act provides that a bank may make a claim against an
indemnifying bank if (1) the claimant bank or a bank that the claimant bank has indemnified has
received a claim for expedited recredit from a consumer or would have been subject to such a
claim if the consumer account had been charged for the substitute check , (2) the claimant bank is
obligated to provide a consumer expedited recredit with respect to such substitute check or
otherwise has suffered a resulting loss, and (3) the production of the original check or a sufficient
copy of the original check is necessary to determine the validity of the charge to the consumer
account or the validity of any warranty claim connected with such substitute check.
The content requirements for an interbank expedited recredit claim essentially parallel
those for a consumer expedited recredit claim but also state that a bank that provides a copy of a
substitute check with its claim must take steps to ensure that such copy is not mistaken for a
legally equivalent substitute check or handled for forward collection or return. An indemnifying
bank may require the claim to be in writing and may permit the claimant bank to submit it
electronically. In addition, section 229.60 provides that banks involved in an interbank expedited
recredit claim under section 229.55 may vary the terms of that section by agreement, but
otherwise no person may vary the terms of subpart D by agreement.
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When a bank transfers, presents, or returns a substitute check for consideration (or any paper or electronic
representation of a substitute check), the bank makes two warranties (1) that the substitute check meets the
requirements for legal equivalence and (2) that no depository bank, drawee, drawer, or indorser will be asked for
payment based on a check that it already has paid. See 69 FR 1476 published on January 8, 2004.

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Section 229.57 Consumer awareness
This section of the EFA Act provides a description of the disclosure that banks must
provide to consumers to promote awareness of substitute checks. Banks are required to provide a
one-time consumer awareness disclosure at the time the customer relationship is initiated to
consumers who will routinely receive paid checks with their periodic account statements in
accordance with their deposit agreements. Banks also must provide the substitute check
consumer awareness disclosure (1) any time a consumer receives a substitute check in re sponse
to a consumer’s request for a check or check copy or (2) any time a check that the consumer
deposited is later returned unpaid to the consumer in the form of a substitute check. Section 12(c)
of the Check 21 Act requires the Board to publish model disclosures that banks can use to satisfy
the content requirements of the consumer awareness disclosure required by that section. The
statute provides that a bank that uses the model disclosure published by the Board to comply
with section 229.57 of the EFA Act shall be treated as complying with that section if it
accurately describes the bank’s policies and practices. The model disclosure explains in very
simple terms what a substitute check is, when the consumer expedited recredit right applies, and
what a consumer must do to exercise that right.
Respondent Panel
Although Regulation CC applies to all banks, the Board accounts for only the burden
imposed on the 686 state member banks and uninsured state branches and agencies of foreign
banks that it supervises.
Time Schedule for Information Collection
The disclosure requirements for Regulation CC are triggered by specific events and must
be provided to consumers within the time periods established by the law and regulation. There is
no reporting form associated with the requirements of Regulation CC; disclosures or
notifications, pertaining to a particular transaction or consumer account, are not publicly
available. Model disclosure forms, clauses, and notices are appended to the regulation to ease
compliance.
Public Availability of Data
There is no data related to this information collection available to the public.
Legal Status
Section 609 of the EFA Act (12 U.S.C. § 4008), as amended by section 1086 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, states that, “the Board, jointly
with the Director of the Bureau of Consumer Financial Protection, shall prescribe regulations
(1) to carry out the provisions of this chapter, (2) to prevent the circumvention or evasion of such
provisions, and (3) to facilitate compliance with such provisions.” Additionally, section 15 of the
Check 21 Act (12 U.S.C. § 5014) authorizes the Board to “prescribe such regulations as the
Board determines to be necessary to implement, prevent circumvention or evasion of, or

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facilitate compliance with the provisions of this chapter.” The Board is therefore authorized by
these statutory provisions to promulgate the recordkeeping and disclosure requirements
contained in Regulation CC. The recordkeeping and disclosure requirements in Regulation CC
are mandatory. The information that Regulation CC requires of consumers who are making an
expedited recredit claim is required to obtain a benefit.
Because records required by Regulation CC are maintained at each banking organization,
the Freedom of Information Act (FOIA) would only be implicated if the Board obtained such
records as part of the examination or supervision of a banking organization. In the event the
records are obtained by the Board as part of an examination or supervision of a financial
institution, this information would be considered confidential pursuant to exemption 8 of the
FOIA, which protects information contained in “examination, operating, or condition reports”
obtained in the bank supervisory process (5 U.S.C. § 552(b)(8)).
Consultation Outside the Agency
Pursuant to sections 1086 and 1100H of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, effective July 21, 2011, the Board and the Consumer Financial
Protection Bureau (CFPB) assumed joint rulemaking authority with respect to subpart B of
Regulation CC. Given this joint authority, the Board has communicated with the CFPB regarding
this information collection.
Public Comments
On May 24, 2022, the Board published an initial notice in the Federal Register (87 FR
31560) requesting public comment for 60 days on the extension, without revision, of the FR CC.
The comment period for this notice expired on July 25, 2022. The Board did not receive any
comments. The Board adopted the extension, without revision, of the FR CC as originally
proposed. On October 13, 2022, the Board published a final notice in the Federal Register (87
FR 62101).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR CC is 137,840
hours. The estimated average hours per response caused by a particular notice or disclosure
requirement depends on several factors, including whether the notice is machine-generated and
whether it is customer-specific. The notices given at account opening and upon request and the
notices posted where consumers make deposits are disclosures concerning the bank’s policy.
They are machine-generated and are not customer-specific; thus the burden per response is
minimal. The notice of changes in policy (including the annual notice updating the ATM list, if
necessary) is not customer-specific, but likely requires more time to prepare. Also, the timing for
these is more uncertain because they are event-triggered and not given a standard schedule;
therefore, the burden per response is greater than for other notices. Notices given when a bank
invokes a case-by-case hold or an exception permitted by the regulation are customer-specific;
therefore, the burden per response associated with these notices is slightly greater. The notice of
nonpayment is also customer-specific; however, it is machine-generated. Therefore, the burden

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per response associated with this notice is less than the burden per response associated with other
customer-specific notices. These recordkeeping and disclosure requirements represent
approximately 2.0 percent of the Board’s total paperwork burden.

FR CC
Bank burden
Sections 229.16 and 229.17
Specific availability policy
disclosure and Initial disclosures
Section 229.16(c)
Longer delays on a case-by-case
basis - Notice in specific policy
disclosure
Section 229.13(g)
Notice of exceptions
Sections 229.18(b) and 229.18(c)
Locations where employees
accept consumer deposits and
ATMs
Section 229.11(c)
Quinquennial inflation
adjustments for disclosures
(annualized)
Section 229.18(e)
Annual notice of new ATMs
Section 229.18(e)
Changes in policy
Section 229.18(e)
Notification of quinquennial
inflation adjustments (annualized)
Section 229.31(c)
Notice of nonpayment on paying
bank
Section 229.33(h)
Notification to customer
Section 229.54
Expedited recredit for consumers
Section 229.55
Expedited recredit for banks

Estimated
number of
respondents6

Estimated
annual
frequency

Estimated
Estimated
average hours annual burden
per response
hours

686

500

0.02

6,860

686

700

0.05

24,010

686

2,000

0.05

68,600

686

1

0.25

172

686

1

8

5,488

686

1

5

3,430

100

2

20

4,000

686

1

4

2,744

686

35

0.02

480

686

370

0.02

5,076

686

35

0.25

6,003

686

15

0.25

2,573

6

Of these respondents, 438 of the 686 respondents and 63 of the 100 respondents are considered small entities as
defined by the Small Business Administration (i.e., entities with less than $ 750 million in total assets),
https://www.sba.gov/document/support-table-size-standards. There are no special accommodations given to mitigate
the burden on small institutions.

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Section 229.57
Consumer awareness
Consumer burden
Section 229.54(b)(2)
Expedited recredit claim notice
Total

686

300

0.02

4,116

17,150

1

0.25

4,288
137,840

The estimated total annual cost to the public for the FR CC is $8,193,282.7
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for this information collection is
negligible.

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For bank burden, the cost to the public was estimated using the following formula: percent of staff time, multiplied
by annual burden hours, multiplied by hourly rates (30% Office & Administrative Support at $21, 45% Financial
Managers at $74, 15% Lawyers at $71, and 10% Chief Executives at $102). Hourly rates for each occupational
group are the (rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment
and Wages, May 2021, published March 31, 2022, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations
are defined using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.
For consumer burden, the average consumer cost of $28 is estimated using data from the BLS, Occupational
Employment and Wages, May 2021, published March 31, 2022, https://www.bls.gov/news.release/ocwage.t01.htm.

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