The Expedited Funds Availability Act (EFA or EFAA) was enacted in 1987 by the United States Congress

United States Congress

The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....

 for the purpose of standardizing hold periods on deposits made to commercial bank

Commercial bank

After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

s and to regulate institutions' use of deposit holds. It is also referred to as Regulation CC or Reg CC, after the Federal Reserve regulation that implements the act. The law is codified in Title 12, Chapter 41 of the US Code

United States Code

The Code of Laws of the United States of America is a compilation and codification of the general and permanent federal laws of the United States...

 and Title 12, Part 229 of the Code of Federal Regulations

Code of Federal Regulations

The Code of Federal Regulations is the codification of the general and permanent rules and regulations published in the Federal Register by the executive departments and agencies of the Federal Government of the United States.The CFR is published by the Office of the Federal Register, an agency...

.

Disclosure

Financial institutions must disclose their hold policies to all account holders, and make the policy available in written form upon request by any customer. It must also be provided at the time of opening of all new accounts.

Additional disclosures are required on deposit slips, at automated teller machine

Automated teller machine

An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...

s, and when the policy is changed in any way.

Types of hold

Regulation CC stipulates four types of holds that a bank may place on a check deposit

Cheque

A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...

 at its discretion. Each has its own qualifications and it is legal for the bank to place any type where the requirements are met, although bank policy may instruct that the type of hold placed be the one that holds the most funds the longest that can be applied legally.

As of February 27, 2010, there is only one check processing region for the entire United States. Therefore, all checks are now local.

Hold Type	Necessary Requirements	Local Availability
Statutory	No other hold applies, can be placed almost anytime.	$200 1st Business Day Following Deposit, Remainder 2nd Business Day
Large Deposit	Aggregate total of checks deposited into one account on one business day is greater than $5000.00.	$5000 2nd Business Day Following Deposit, Remainder 7th Business Day
New Account	The account being deposited into has been open for less than 30 days.	9th Business Day
Exception	Account has been overdrawn for six or more business days of the previous six months. (NSF Hold) Account has been overdrawn for two or more business days in excess of $5000 in the previous six months. (NSF Hold) The depository bank has reason to doubt the check is good. (The paying bank indicates the check will not clear Clearing (finance) In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction.... , is suspected to be fraudulent, or is either postdated or staledated.) The item being deposited is a legal copy of an item previously returned for NSF (an IRD). Item is accepted for deposit during a power outage or computer failure. (Extremely Rare)	7th Business Day

There are a few exceptions to these guidelines that are important to note. If an account owner is depositing into an account that does not qualify for the exception hold but also owns another account that does qualify, then the Exception NSF Hold can be placed. In the same manner, if an account owner is depositing into an account that has been open for less than 30 days but owns another account that has been open greater than 30 days, the New Account Hold cannot be legally placed.

There are certain items that present less risk to financial institutions and thus are subject to expedited availability under the stipulations of Regulation CC. The following items must have the first $5000 available for the Statutory, Large Deposit and New Account Hold by the first business day following the deposit:

• Cashier's checks, certified checks, or teller's checks*;
• Postal money orders;
• U.S. Treasury checks;
• Checks drawn on a Federal Reserve Bank or Federal Home Loan Bank;
• Any check issued by a state, city, county, or other municipality;
• Any check drawn from another account at the depository institution.

For each of these items, the item must be presented for deposit into the payee's account for it to receive expedited fund availability; when one of these checks is presented for deposit into a third party account, it loses its preferential treatment. Also, the bank may require use of a special deposit slip or envelope for next-day availability of cashier's checks, certified checks, teller's checks, or state & local government checks; if it does so, it must notify customers and tell them how to obtain the special slip or envelope.

*Regulation CC defines a "cashier's check" as a check that is issued by a bank, drawn on that same bank, is a direct liability of the bank, and signed by one or more officers of that bank. Though the term "teller's check" is commonly used only by Federal credit unions, under Regulation CC any check "drawn by the bank, and drawn on another bank or payable through or at a bank" is a "teller's check" if issued "for remittance purposes". "Official Checks" or "Bank Checks" may not qualify as "cashier's checks" under Regulation CC, but they usually qualify for next-day availability as "teller's checks".

Payment of interest

According to the regulation, interest-bearing accounts shall receive earnings from funds from the time they are collected by the depository institution, regardless of hold lengths.

Enforcement

Under the act, enforcement is divided by the type of institution, respective to each type's mandated oversight authority:

• For national banks, and federal branches and agencies of foreign banks, the act is enforced by the Office of the Comptroller of the Currency
  Office of the Comptroller of the Currency
  The Office of the Comptroller of the Currency is a US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States...
  
  ;
• For members of the Federal Reserve System
  Federal Reserve System
  The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
  
   who are not national banks, and for offices, branches, and agencies of foreign banks located in the United States (who are not federal branches and agencies of foreign banks), the provisions are enforced by the Board of Governors of the Federal Reserve;
• In the case of banks insured by the Federal Deposit Insurance Corporation
  Federal Deposit Insurance Corporation
  The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
  
   who are not members of the Federal Reserve System, and insured state branches of foreign banks, enforcement falls to the Board of Directors of the Federal Deposit Insurance Corporation
  Federal Deposit Insurance Corporation
  The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
  
   (FDIC);
• The Director of the Office of Thrift Supervision
  Office of Thrift Supervision
  The Office of Thrift Supervision was a United States federal agency under the Department of the Treasury that charters, supervises, and regulates all federally- and state-chartered savings banks and savings and loans associations. It was created in 1989 as a renamed version of another federal agency...
  
   is responsible for enforcing the provisions of the act in the case of savings associations whose deposits are insured by the FDIC;
• Federal credit unions or credit union
  Credit union
  A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
  
  s insured by the National Credit Union Share Insurance Fund
  National Credit Union Share Insurance Fund
  The National Credit Union Share Insurance Fund is administered by the National Credit Union Administration for the purpose of providing deposit insurance to protect deposits of credit union members at insured institutions in the United States. It was created in 1970 shortly after the creation of...
  
   are subject to enforcement of the act by the National Credit Union Administration Board.

Awards for damages are limited under the regulation, including not more than $1000 in addition to actual damages for individual actions, and not more than the lesser of $500,000 or 1% of the net worth of the bank, in addition to actual damages, for class actions.