The Expedited Funds Availability Act: The Law Behind Reg CC

10/1/2026

Most bankers know Regulation CC by its hold chart. Fewer have read the statute underneath it, and that gap shows up in the wrong places: in a policy that cites the regulation for something only the statute says, in a training session that treats a Board interpretation as if Congress wrote it, or in a compliance file that cannot explain why the dollar amounts changed on July 1, 2025.

The Expedited Funds Availability Act is short. It runs from 12 U.S.C. 4001 to 4010, ten sections in all, and most of what a deposit operations team does every day traces back to one of them. This post walks through what the Act itself requires, which parts the Federal Reserve and the CFPB filled in by regulation, and what that division means for a bank writing procedures or answering an examiner. For the practical availability schedule and the hold categories, our Regulation CC funds availability guide covers the rule itself; this page is about the law that created it.

Why Congress Passed the Act

Before 1987, federal law did not set a maximum period a bank could hold a deposited check. Banks set their own holds, and those holds were often long, especially for checks drawn on distant banks. The reasoning was understandable: the check collection system was slow and paper-based, and a bank that released funds before learning whether a check would be paid took the loss if it bounced. Depositors, however, had no way to know how long a hold would last and no recourse when it ran far beyond the time the bank actually needed.

Congress answered with the Expedited Funds Availability Act, enacted on August 10, 1987, as Title VI of the Competitive Equality Banking Act of 1987 (Pub. L. 100-86). The Act did two things at once. It set maximum hold periods that depository institutions must honor, and it gave the Federal Reserve Board broad authority to speed up the check collection and return system so that shorter holds would be safe for banks. Those two halves still define Regulation CC today: the consumer-facing availability rules on one side, and the bank-to-bank collection and return rules on the other.

The Act took effect on September 1, 1988, with a temporary schedule. A permanent schedule followed on September 1, 1990, and that permanent schedule is the one Regulation CC section 229.12 still carries.

What the Statute Itself Requires

The Act is organized into numbered sections, 602 through 611 in the public law, codified at 12 U.S.C. 4001 through 4010. Reading them in order gives a clear picture of how the obligations fit together.

Definitions (section 602, 12 U.S.C. 4001)

The Act defines the vocabulary the rest of the law relies on: account, business day, depository institution, local and nonlocal checks, and the other terms that determine whether a deposit is covered and how the clock runs. Regulation CC adopts and expands these definitions in section 229.2.

Availability schedules (section 603, 12 U.S.C. 4002)

This is the heart of the Act. It requires next-business-day availability for certain deposits that carry little risk, including cash deposited at a staffed teller station, funds received by wire transfer, U.S. Treasury checks, and, under specified conditions, state and local government checks, cashier's, certified and teller's checks, and checks drawn on the same institution. It also requires that a minimum amount of other check deposits be available the next business day. For everything else, it set the permanent schedule for local and nonlocal checks and allowed an extra day for withdrawals by cash.

The statute's conditions matter. Several of the next-day categories apply only when the check is deposited at a staffed facility, with a special deposit slip where the bank requires one, and endorsed only by the person to whom it was issued. Regulation CC carries those conditions forward, which is why a cashier's check handed to a teller and the same check dropped into an ATM can receive different availability.

Safeguard exceptions (section 604, 12 U.S.C. 4003)

Congress recognized that fixed schedules would sometimes force a bank to release funds it had good reason to doubt. Section 604 provides exceptions for new accounts and for checks the institution has reasonable cause to believe are uncollectible, and it authorizes the regulators to set exceptions for large deposits, redeposited checks, and accounts that have been repeatedly overdrawn. It also gives the regulators authority to suspend the schedules for any classification of checks if the schedules produce an unacceptable level of fraud losses.

This split is worth remembering when you train staff. The new-account and reasonable-cause exceptions come straight from Congress. The large-deposit, redeposited-check and repeated-overdraft exceptions exist because the regulators chose to create them under the authority Congress gave them. The repeated-overdraft dollar threshold in Regulation CC, for example, does not appear in the Act at all; the agencies set it under section 604(b)(3).

Disclosure of availability policies (section 605, 12 U.S.C. 4004)

The Act requires institutions to tell customers how long deposits will be held: before an account is opened, upon request, in notices posted where consumer deposits are accepted, on preprinted deposit slips, and at ATMs. It also requires advance notice of changes to the policy. Regulation CC sections 229.15 through 229.18 set out the content, form and timing of those disclosures, and Appendix C supplies model forms.

Payment of interest (section 606, 12 U.S.C. 4005)

Interest on interest-bearing transaction accounts must begin to accrue no later than the business day on which the institution receives credit for the deposited funds. The Act carves out a special rule for credit unions that delay interest accrual on all deposits, provided they disclose that policy, and it does not require interest on a check returned unpaid. Regulation CC implements this in section 229.14.

Miscellaneous provisions (section 607, 12 U.S.C. 4006)

Section 607 contains several rules that every deposit operations manager should know by heart:

• After-hours deposits. A deposit made on a Saturday, Sunday, legal holiday, or after the close of business is treated as made on the next business day.
• Availability at the start of the business day. Funds that must be available on a given day must be available when that day begins, subject to the cash-withdrawal adjustment. Regulation CC sets this as the later of 9:00 a.m. local time or the time the bank's teller facilities, including ATMs, are available for withdrawals.
• Faster is always allowed. Nothing in the Act prohibits making funds available sooner, and nothing affects a bank's right to accept or reject a check for deposit, revoke a provisional settlement, or charge back the account when a check is returned.
• No freezing other funds. A bank may not freeze other, already-available funds in the account solely because a newly deposited check is not yet available.
• Employee training. Each institution must take the actions necessary to fully inform every employee who performs duties subject to the Act of its requirements, and must maintain procedures reasonably designed to assure and monitor employee compliance.
• Inflation adjustment. Added by the Dodd-Frank Act, this provision requires the Act's dollar amounts to be adjusted every five years by the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), rounded to the nearest multiple of $25.

The training requirement is the one most often overlooked. It is a statutory obligation, not an examiner's preference, and Regulation CC section 229.19(f) repeats it: each bank must establish procedures to ensure compliance and give each employee who performs duties subject to the rule a statement of the procedures that apply to that employee.

Effect on state law (section 608, 12 U.S.C. 4007)

The Act preempts inconsistent state law, including the Uniform Commercial Code as adopted in a state, with one important exception. A state law in effect on September 1, 1989, that required funds to be made available in a shorter period than federal law supersedes the federal schedule to the extent of that shorter period, and applies to all federally insured depository institutions in that state. Appendix F to Regulation CC records the Board's preemption determinations. If your bank operates in a state with its own availability statute, the compliance answer may be faster than the federal maximum.

Regulations and the payment system (section 609, 12 U.S.C. 4008)

Section 609 directs the Board, now jointly with the Director of the CFPB, to prescribe regulations to carry out the Act, prevent its evasion, and facilitate compliance. It also gives the Board responsibility to regulate any aspect of the payment system involving the receipt, payment, collection, or clearing of checks. That second grant is the legal foundation for Regulation CC's Subpart C, which governs check collection and return, and it explains why the Fed alone writes those rules.

Enforcement (section 610, 12 U.S.C. 4009)

Compliance is enforced by each institution's federal regulator under section 8 of the Federal Deposit Insurance Act for banks and savings associations, and by the NCUA for federally insured credit unions. A violation of the Act is treated as a violation of the regulator's own enabling statute, so the full range of supervisory tools applies.

Civil liability (section 611, 12 U.S.C. 4010)

A depository institution that fails to comply is liable to the injured person for actual damages, an additional amount the court may allow, and costs and attorney's fees in a successful action. The statute originally set the individual additional amount at not less than $100 nor more than $1,000, and capped class recoveries at the lesser of $500,000 or 1 percent of the institution's net worth. Because those figures are dollar amounts under the Act, they are subject to the five-year inflation adjustment; Regulation CC section 229.21 currently sets the individual range at $125 to $1,350 and the class cap at the lesser of $672,950 or 1 percent of net worth.

Two defenses are built into the statute. A bank is not liable for a bona fide error, such as a clerical, calculation, computer malfunction, programming, or printing error, if it maintained procedures reasonably adapted to avoid it; an error of legal judgment does not qualify. And a bank is not liable for anything done in good faith in conformity with a Board rule, regulation, or interpretation, even if that interpretation is later changed. Actions must be brought within one year of the violation.

How Regulation CC Implements the Act

Regulation CC, 12 CFR Part 229, is the regulation that turns the statute into operating rules. Section 229.1 states that it implements both the Expedited Funds Availability Act and the Check Clearing for the 21st Century Act (Check 21), and it is organized into four subparts:

Subpart	Covers	Statutory source
A	Definitions and administrative enforcement	EFA Act and Check 21 Act
B	Availability schedules, exceptions, disclosures, interest, civil liability	EFA Act sections 603-607, 611
C	Collection and return of checks and electronic checks	EFA Act section 609
D	Substitute checks, warranties, expedited recredit	Check 21 Act

 

The appendices matter almost as much as the text. Appendix A is the routing number guide for next-day items such as Treasury checks and Federal Reserve Bank checks. Appendix C contains model availability disclosures, clauses and notices. Appendix E is the Board's official commentary, which the statute itself makes an official interpretation, and which supplies most of the worked examples examiners use.

Where the regulation goes further than the statute

The Board used its authority to extend and refine the Act in several places that matter at the teller line:

• Electronic payments. The Act requires next-day availability for wire transfers. Regulation CC defines "electronic payment" as a wire transfer or an ACH credit transfer, so ACH credits receive the same next-day treatment.
• Additional next-day items. The regulation adds U.S. Postal Service money orders and checks drawn on Federal Reserve Banks and Federal Home Loan Banks to the next-day list, under conditions.
• The payee requirement. Where the Act speaks of a check "endorsed only by the person to whom it was issued," the regulation requires deposit into an account held by a payee, closing off third-party deposits from next-day treatment.
• Specific exceptions and notices. The detailed exception triggers, the "reasonable period" extensions, and the content and timing of exception notices are regulatory, not statutory.

Who writes which part

The Dodd-Frank Act, effective July 21, 2011, gave the CFPB joint authority with the Board to prescribe regulations under the Act's availability, exception, disclosure, and regulation-writing sections. Regulation CC section 229.1(a)(2) lists those joint provisions. The Board alone continues to regulate the payment system aspects under section 609(b) and (c), which is why the collection and return rules in Subpart C remain a Federal Reserve matter.

What Has Changed Since 1987

The statute has been remarkably stable. The landscape around it has not.

Check processing consolidation. The local/nonlocal distinction in the Act depended on Federal Reserve check processing regions. As the Reserve Banks consolidated their check operations, the number of regions fell, and on February 27, 2010, a single check processing region remained. From that point every check drawn on a U.S. depository institution became a local check for Regulation CC purposes, so the nonlocal schedule, while still in the regulation text, no longer has practical effect.

Check 21. The Check Clearing for the 21st Century Act, effective in 2004, created the substitute check and accelerated the move to electronic collection. Regulation CC Subpart D implements it.

Electronic checks and remote deposit. A 2017 final rule updated Subpart C for electronic checks and added indemnities, including one aimed at remote deposit capture, where a customer deposits an image and keeps the paper original. The availability side of remote deposit is a separate and less settled question.

Inflation adjustments. Dodd-Frank's five-year adjustment requirement produced the first adjusted amounts effective July 1, 2020, and a second set effective July 1, 2025. The regulation schedules further adjustments on July 1 of every fifth year after 2025.

The Dollar Amounts Today

These are the amounts in effect since July 1, 2025, under the joint Board and CFPB final rule published May 20, 2024. They reflect a 21.8 percent increase in the CPI-W between July 2018 and July 2023.

Amount	Regulation CC section	Current figure	Prior figure
Next-day minimum of other check deposits	229.10(c)(1)(vii)	$275	$225
Cash withdrawal amount	229.12(d)	$550	$450
New-account amount	229.13(a)(1)(ii)	$6,725	$5,525
Large-deposit threshold	229.13(b)	$6,725	$5,525
Repeatedly overdrawn threshold	229.13(d)(2)	$6,725	$5,525
Civil liability, individual action	229.21(a)(2)(i)	$125 to $1,350	$100 to $1,100
Civil liability, class action cap	229.21(a)(2)(ii)(B)	Lesser of $672,950 or 1% of net worth	Lesser of $552,500 or 1% of net worth

 

The next scheduled adjustment date is July 1, 2030. The practical lesson is the one the regulators built into the rule: any printed hold chart, teller job aid, or core system parameter that hard-codes these figures needs a review date attached to it.

Why the Statute Still Matters to a Compliance Officer

It is possible to run a compliant deposit operation without ever opening Title 12 of the U.S. Code. But knowing the statute pays off in three situations.

When you write policy. The Act's training mandate, its no-freeze rule, and its "faster is always allowed" principle should appear in your funds availability policy with their statutory basis, because they explain to the board and to staff why certain shortcuts are off limits. If your bank is evaluating its broader compliance program, the compliance management systems framework shows where a regulation like this sits in the oversight structure.

When you answer an examiner. Findings are written against Regulation CC, but the severity of a finding often turns on whether the problem touches a statutory requirement. A missing exception notice is a regulatory violation; a missing employee training program is a failure of a duty Congress imposed directly.

When you handle a complaint or a claim. The civil liability section, the bona fide error defense, the reliance-on-Board-rulings defense, and the one-year limitations period all live in the statute. A bank that understands them handles customer disputes with more confidence and documents its procedures with those defenses in mind.

Training on the Act and the Regulation

Because section 607(e) of the Act requires every employee who performs duties subject to the Act to be informed of its requirements, training is not optional for tellers, new-accounts staff, deposit operations, or anyone who sets availability parameters. Our Expedited Funds Availability (Reg CC) course is dedicated to this regulation. Front-line staff can pair it with the broader teller training catalog, and compliance staff can find related courses in deposit compliance training. For a view of where funds availability fits among the other rules a teller applies, see our bank teller training guide.

Frequently Asked Questions

What is the Expedited Funds Availability Act?

The Expedited Funds Availability Act is a 1987 federal law, codified at 12 U.S.C. 4001 to 4010, that sets the maximum time a depository institution may hold deposited funds before making them available for withdrawal. It also requires banks to disclose their availability policies, sets rules for when interest begins to accrue, gives customers a private right of action, and authorizes the Federal Reserve to improve the check collection and return system. It was enacted as Title VI of the Competitive Equality Banking Act of 1987 and is implemented by Regulation CC.

What is the difference between the Expedited Funds Availability Act and Regulation CC?

The Act is the statute Congress passed; Regulation CC (12 CFR Part 229) is the regulation the Federal Reserve Board and the CFPB issued to carry it out. The Act sets the framework: the next-day categories, the permanent schedule, the new-account and reasonable-cause exceptions, disclosure, interest, enforcement and liability. The regulation fills in operating detail, such as ACH credits as electronic payments, the large-deposit and repeated-overdraft exceptions, exception notice content and timing, and model forms. Regulation CC also implements the separate Check 21 Act.

When did the Expedited Funds Availability Act take effect?

The Act was signed on August 10, 1987. Its availability requirements took effect on September 1, 1988, under a temporary schedule, and the permanent availability schedule took effect on September 1, 1990. Regulation CC section 229.12 still states that the schedule it contains is effective September 1, 1990. Later amendments, including the Dodd-Frank changes effective July 21, 2011, added joint CFPB rulemaking authority and the five-year inflation adjustment of the Act's dollar amounts.

Who enforces the Expedited Funds Availability Act?

Each institution's federal regulator enforces the Act under section 8 of the Federal Deposit Insurance Act: the OCC for national banks and federal savings associations, the Federal Reserve for state member banks, and the FDIC for state nonmember banks, with the NCUA enforcing it for federally insured credit unions. The Board enforces it for any institution not committed to another agency. Customers can also sue under the Act's civil liability section for actual damages, statutory damages within the adjusted range, costs, and attorney's fees.

How often do the Reg CC dollar amounts change?

Every five years. The Dodd-Frank Act added a requirement that the Act's dollar amounts be adjusted every five years by the increase in the CPI-W, rounded to the nearest $25. Regulation CC section 229.11 sets the method and schedules adjustments on July 1, 2020, July 1, 2025, and July 1 of every fifth year after 2025. The amounts in effect now took effect on July 1, 2025, including a $275 next-day minimum and a $6,725 large-deposit threshold. If the CPI-W change does not round to a new $25 step, an amount stays the same.

Does the Expedited Funds Availability Act require bank employee training?

Yes. Section 607(e) of the Act, at 12 U.S.C. 4006(e), requires each depository institution to take the actions necessary to fully inform each employee who performs duties subject to the Act of its requirements, and to establish and maintain procedures reasonably designed to assure and monitor employee compliance. Regulation CC section 229.19(f) implements this by requiring written procedures and a statement of the applicable procedures for each such employee. Tellers, new-accounts staff, and deposit operations personnel are the usual audience.

Build Reg CC Knowledge on a Solid Foundation

The statute explains why the hold chart looks the way it does, and the regulation tells your staff what to do at the counter. The Expedited Funds Availability (Reg CC) course is our dedicated course on this regulation, and it is a practical way to meet the Act's employee training requirement for the people who place and explain holds every day.