Regulation CC governs when banks must make deposited funds available for withdrawal, and it generates a steady stream of examination findings at community banks. The rules are deceptively technical: different hold periods for different deposit types, specific notice requirements for each exception, and disclosure obligations that must be precisely worded. Examiners test Reg CC by pulling deposit hold samples and checking every element, the hold period, the reason, the notice, and the timing. This guide covers the availability rules, the exceptions banks rely on most, and the violations that show up in exam reports.
Key Takeaways:
- Regulation CC (12 CFR Part 229) sets maximum hold periods that vary by deposit type, method, and account age
- Next-day availability is required for specific deposit types including cash, electronic payments, and the first $275 of aggregate check deposits on a banking day, unless an applicable exception suspends the rule
- Case-by-case delays and applicable exception holds require specific notices; a new account's availability schedule must instead be disclosed at account opening
- The most common violations are missing hold notices, incorrect hold periods, and failure to make the first $275 available by the next business day when required
What Regulation CC Requires
Regulation CC (12 CFR Part 229), issued by the Federal Reserve Board, implements the Expedited Funds Availability Act (EFAA). The regulation has two core components:
Subpart B: Availability of Funds: Sets the maximum hold periods banks can impose on different types of deposits. These are maximum periods, banks can make funds available sooner, but cannot hold longer.
Subpart C: Collection of Checks: Governs the check collection process, including return deadlines and interbank responsibilities. For most community banks, Subpart B generates the examination findings.
The fundamental principle: depositors need predictable access to their funds, and banks have limited rights to delay availability. Every delay must fit the regulation and the bank's disclosed policy, and the required notice or disclosure must be provided.
Funds Availability Schedules
Regulation CC divides deposits into categories with different maximum hold periods. These periods run from the banking day of deposit (the business day on which the deposit is received before the bank's cutoff time).
Next-Day Availability Items (§ 229.10)
When the applicable conditions in § 229.10 are met, the following deposits must be available for withdrawal by the start of the next business day after the banking day of deposit. Those conditions include payee-account, in-person, and special-deposit-slip requirements for certain checks:
- Cash deposits made in person to a bank employee
- Electronic payments (ACH credits, wire transfers, direct deposits)
- U.S. Treasury checks deposited into an account held by a payee of the check
- Checks drawn on the same bank (on-us checks) deposited in a branch of that bank
- State and local government checks deposited in person (if the bank is in the same state as the payer)
- Cashier's, certified, and teller's checks deposited in person, subject to properly invoked exception holds
- Federal Reserve Bank and Federal Home Loan Bank checks
- USPS money orders deposited in person
- The first $275 of aggregate check deposits on a banking day that is not already available the next day
The $275 threshold is critical. When § 229.10(c)(1)(vii) applies, the first $275 of aggregate check deposits on a banking day must be available by the next business day. Some exception holds, including redeposited-check, repeated-overdraft, and reasonable-cause holds, can suspend that requirement. Examiners test whether the amount was made available whenever the rule applies.
Local and Non-Local Check Holds
Under the Check Clearing for the 21st Century Act (Check 21) and amendments to Reg CC, the distinction between local and non-local checks has been largely eliminated for availability purposes. The current rule provides:
- Most check deposits: Funds must be available by the second business day after the banking day of deposit under § 229.12(b), unless the bank properly invokes an exception
- Large deposits: The $6,725 threshold does not create a separate standard fifth-day schedule. If aggregate check deposits exceed $6,725 on one banking day, the bank may apply the large-deposit exception only to the excess and extend availability for a reasonable period
The standard schedules are maximum periods unless an exception applies. Many community banks provide faster availability as a competitive practice or based on customer relationship.
ATM Deposits
Cash and check deposits made at proprietary ATMs (owned by the depositor's bank) follow the same schedules as in-person deposits, with one exception: cash deposited at a proprietary ATM must be available by the second business day (not next day).
Deposits at non-proprietary ATMs (owned by another bank) may be held up to five business days.
Exception Holds
Regulation CC permits banks to extend hold periods beyond the standard schedules in specific circumstances. These are exceptions, not general authority; each must be properly applied and accompanied by the notice or disclosure that governs it.
Large Deposit Exception (§ 229.13(b))
A bank may extend the hold period for the portion of aggregate check deposits that exceeds $6,725 (adjusted periodically) on any single banking day. The exception applies only to the amount above $6,725, and the excess may be held for a reasonable period.
The official commentary treats one additional business day for on-us checks and five additional business days for checks otherwise governed by § 229.12(b) as presumptively reasonable. A longer extension may be reasonable, but the bank needs a supportable basis for it.
Absent another valid exception, the first $6,725 must still be available within the standard schedule. The bank must provide written notice of the extended hold.
New Account Exception (§ 229.13(a))
The new-account period covers the first 30 calendar days after the account is established. An account is not considered new only if each customer on the new account had, within the preceding 30 calendar days, another account at the bank for at least 30 calendar days. During the new-account period:
- Cash and electronic payments retain their applicable availability rules
- The first $6,725 of U.S. Treasury checks, USPS money orders, Federal Reserve Bank and Federal Home Loan Bank checks, state/local government checks, cashier's, certified, teller's, and qualifying traveler's checks receives the availability required by § 229.10(c), subject to its deposit conditions
- Amounts above $6,725 from those specified checks must be available no later than the ninth business day after deposit
- Ordinary check deposits are not subject to the § 229.12 availability schedule during the new-account period; the bank's disclosed new-account policy governs their availability
The bank must disclose its new-account availability policy before opening the account. A transaction-specific exception notice is not required solely because the account is new, although another exception or a case-by-case delay can create a separate notice obligation.
Reasonable Cause Hold (§ 229.13(e))
A bank may extend the hold period if it has reasonable cause to believe the check will not be paid. Reasonable cause must be based on specific, articulable facts, not a general suspicion or a hunch.
Specific facts that can support reasonable cause include:
- Notice from the paying bank that the deposited check is being returned
- Information from the paying bank that payment was stopped or the drawer lacks sufficient funds
- A stale-dated or postdated check
- Confidential, check-specific information indicating kiting, insolvency, or another collectibility problem
Crucially, the bank must document the specific facts supporting the reasonable cause determination. A hold notice that says only "reasonable cause" without explaining the basis is a violation. Examiners pull reasonable cause holds specifically because of the documentation requirement.
Other Exceptions
Additional exceptions exist for:
- Redeposited checks (checks previously returned unpaid and redeposited)
- Repeated-overdraft accounts that meet the frequency or $6,725 substantial-overdraft tests in § 229.13(d)
- Emergency conditions (communications interruptions, war, natural disasters)
Notice Requirements
Case-by-case delays under § 229.16(c) and exceptions in § 229.13(b)-(e) generally require written notice, subject to the one-time alternatives in § 229.13(g)(2)-(3). The new-account exception is handled through the bank's initial availability-policy disclosure rather than a transaction-specific hold notice solely because the account is new. Emergency-condition notices follow § 229.13(g)(4)'s separate reasonable-form and reasonable-time rule.
Timing: When an applicable exception is invoked at deposit, the bank generally provides notice at that time. For a non-in-person deposit, the notice must be mailed or delivered no later than the first business day after the banking day of deposit. If the facts supporting an exception become known later, notice must be mailed or delivered as soon as practicable, but no later than the first business day after those facts become known.
Required content of a § 229.13(g)(1) exception notice:
- A number or code identifying the customer's account that need not exceed four digits
- The date of the deposit
- The amount of the deposit being delayed
- The reason the exception was invoked
- The time period within which the funds will be available
For reasonable cause holds, the notice must state that the bank has reason to believe the check may not be paid and include the specific reason, such as information from the paying bank or facts showing that the check is stale-dated or postdated.
Case-by-case vs. general notices: A general availability-policy disclosure does not replace a transaction-specific notice when a case-by-case delay or applicable exception requires one. Case-by-case notices under § 229.16(c)(2) have a distinct required-content list: the account-identifying code, deposit date, delayed amount, and day the funds will be available. They do not require a hold reason. The new-account schedule is different: it must appear in the bank's initial policy disclosure, and a transaction-specific exception notice is not required solely because the account is new.
The Most Common Regulation CC Violations
Based on examination findings and enforcement actions, these violations appear most frequently:
1. Missing hold notices
The bank places a hold but doesn't provide the required specific written notice. This is the single most common Reg CC violation. It typically occurs when:
- The teller system places an automatic hold but doesn't generate a notice
- The notice is generated but not delivered to the customer
- The bank relies on the general availability policy disclosure instead of a transaction-specific notice
2. Incomplete hold notices
For a § 229.13(g)(1) exception notice, missing required elements include the account-identifying code, deposit date, delayed amount, reason the exception was invoked, or availability time period. A notice that says only "hold placed per bank policy" does not supply the required reason for an exception under § 229.13(b)-(e). For a case-by-case delay under § 229.16(c)(2), apply that section's separate content requirements rather than importing the exception-notice list.
3. Holds exceeding permitted periods
The bank holds funds longer than Reg CC permits for the deposit type and exception invoked. This can occur when:
- Hold periods are calculated incorrectly (counting calendar days instead of business days)
- The bank applies a large-deposit exception to the entire deposit rather than only the amount exceeding $6,725
- Holds are not released on the required date due to system errors
4. Failure to make the required $275 next-day amount available
When § 229.10(c)(1)(vii) applies, the first $275 of aggregate check deposits on a banking day must be available by the next business day. A bank violates this requirement when it withholds that amount without a valid exception that suspends the rule. Examiners specifically test this.
5. Reasonable cause holds without documentation
The bank invokes the reasonable cause exception without documenting the specific facts supporting the hold. An undocumented reasonable cause hold is treated as an impermissible hold.
6. Disclosure deficiencies
The bank's general funds availability policy (required at account opening under § 229.17) is outdated, incomplete, or doesn't match actual hold practices. Examiners compare the disclosure to actual hold samples.
Examination Procedures
Examiners test Reg CC compliance through a structured process:
- Review the bank's funds availability policy and disclosures for completeness and accuracy
- Pull a sample of held deposits from the review period
- For each held-deposit sample, verify: the hold period was within permitted limits, the correct exception was applied, proper written notice was provided with all required elements, and the required next-day amount was made available on time
- Review reasonable cause holds for documented factual basis
- Check system settings to verify automated holds comply with maximum permitted periods
- Compare disclosures to practice, does the bank's actual hold behavior match what the availability policy says?
How Canarie Helps Banks Track Reg CC Compliance
Reg CC compliance depends on consistent execution: every delay must have a valid basis, every required notice must contain the right elements, and every availability period must comply with the applicable schedule, exception, and disclosed policy. At community banks where tellers process hundreds of deposits weekly, the risk of missing a notice or miscalculating a hold period is real.
Canarie tracks Reg CC obligations as part of your deposit operations compliance program. Hold notice procedures are mapped to tasks with completion evidence, and periodic self-testing of hold practices is scheduled and documented. When your examiner pulls a deposit hold sample, your compliance team can produce documentation showing systematic adherence to notice and availability requirements.
See how Canarie helps banks document deposit operations compliance →
Frequently Asked Questions
Does Regulation CC apply to mobile deposit capture?
An electronic image submitted through mobile or remote deposit capture is not itself a "check" under Subpart B's funds-availability definition. Its standard availability schedules, including the $275 next-day rule, therefore do not automatically govern every mobile image. Availability generally follows the bank's mobile-deposit or remote-deposit-capture agreement and disclosures. If the bank accepts a paper check or legally equivalent substitute check, Subpart B may apply; Subpart C warranties and indemnities may separately apply to electronic checks and remote deposit capture.
Can a bank place a hold on a direct deposit or ACH credit?
Electronic payments, including ACH credits, wire transfers, and direct deposits, are next-day availability items under § 229.10(b). The bank must make these funds available for withdrawal by the start of the next business day after the banking day of receipt. The check-based exception hold provisions discussed above do not authorize a bank to delay those electronic payments.
What is the difference between Regulation CC and the bank's individual hold policy?
For deposits covered by the standard schedules, Regulation CC sets maximum availability periods unless a valid exception applies. A bank may make funds available sooner, but it cannot delay availability beyond the governing schedule without a permitted basis. New-account ordinary checks and valid exceptions require separate treatment under the regulation and the bank's disclosures. The disclosed policy must accurately reflect actual practice.
How does the $6,725 threshold work for multiple deposits on the same day?
The $6,725 threshold for the large-deposit exception applies to aggregate check deposits made for the customer on one banking day, potentially across the customer's accounts. Cash and electronic payments are not included in that aggregation. If a customer makes three check deposits of $2,500 each on the same day ($7,500 total), the large-deposit exception applies to the $775 above $6,725. The first $6,725 must be available under the standard schedule, and the bank may extend the hold on the $775 excess. Each check deposit individually is below $6,725, but the aggregate check deposits trigger the exception.