Regulation CC was amended by the Board of Governors of the Federal Reserve System (Board) releasing a finalized rule to formally adopt a methodology for inflation adjustments. The finalized rule takes effect July 1, 2025. Banking institutions will need to understand both the updated thresholds and the considerations that surround them to remain in compliance.
What is Regulation CC?
Regulation CC implements the Expedited Funds Availability Act (EFA Act) and adjusts various dollar amounts for inflation every five years.
Key Definitions under Regulation CC
Account – Essentially any account that meets the definition of a transaction account under Regulation D, including the following:
- Demand deposit account
- Negotiable order of withdrawal account
- Share draft account
- Automatic transfer account
Check – The following are examples taken directly from the rules:
- Negotiable demand draft drawn on or payable through a bank
- Negotiable demand draft drawn on a Federal Bank or Federal Home Loan Bank
- US Treasury check
- Demand draft drawn on a state government or unit of local government not payable through a bank
- USPS money order
- Traveler’s check drawn on a bank
- Includes original or substitute check
Banking Day vs. Business Day – The difference between a banking day and a business day is vital. A banking day is a business day in which an office of a bank is open to the public for carrying out substantially all banking functions. A business day is any calendar day other than a Saturday, Sunday or federal holiday.
Regulation CC Threshold Changes
The Consumer Price Index for Urban Wage Earners and Clerical Workers increased by 21.8% between July 2018 and July 2023, so the following thresholds are effective as of July 1, 2025, with the next adjustment expected in five years:
- Minimum Amount, 12 CFR 229.10(c)(1)(vii). – $275 (increased from $225)
- Cash Withdrawal Amount, 12 CFR 229.12(d). – $550 (increased from $450)
- New-Account Amount, 12 CFR 229.13(a)(1)(ii). – $6,725 (increased from $5,525)
- Large-Deposit Threshold, 12 CFR 229.13(b). – $6,725 (increased from $5,525)
- Repeatedly Overdrawn Threshold, 12 CFR 229.13(d)(2). – $6,725 (increased from $5,525)
- Civil Liability Minimum and Maximum for Individual Action, 12 CFR 229.21(a)(2)(i). – $125 to $1,350 (increased from $100 to $1,100)
- Civil Liability Maximum for Class Action, 12 CFR 229.21(a)(2)(ii)(B). – $672,950 (increased from $552,500)
Regulation CC Threshold Considerations
There are several considerations that banks and other financial institutions should bear in mind as the updated thresholds approach.
New Account Disclosures
First is your new account disclosures. Review these to ensure all applicable dollar amounts have been updated. No other requirements regarding timing, content or who should receive the disclosure are changing.
Consider everywhere you may have a Regulation CC disclosure or a reference to funds availability. This could be online, in your lobby, on your deposit-taking ATMs, on deposit slips or perhaps on marketing brochures. Discuss this issue at your next compliance committee meeting so everyone can brainstorm on where information that needs to be updated might be.
Change-in-Terms Notice
How do you plan to notify your existing customers of this change? Timing is important: it must be done within 30 days after implementation since it’s expediting the availability of funds. The regulation doesn’t distinguish here between business or banking days, so use calendar days. No specific form is required for the disclosure as long as it’s “clear and conspicuous.” If you choose to send a completely new disclosure, you must draw attention to the changed terms.
Note: The language in Section 229.18(e) states that a subsequent notice regarding a change in policy must be sent to consumer accounts but sending it to all customers with affected accounts is probably not a bad idea.
Policies, Procedures and Systems
Review the hold notices provided to customers: if there are any preprinted dollar amounts, be sure that they’re updated. You’ll also want to examine your systems that generate hold notices and make sure they’re updated correctly. A dry run on all types of holds that you place can help ensure that the system updates are comprehensive. Review any of your policies, and particularly your procedures, to make sure dollar amounts are updated there as well.
Staff Training
Have you appropriately updated training material? While there’s no specific requirement for staff training on this change, Regulation CC does include a general requirement for employee training. So, if examiners find issues with your updated thresholds, it may not just be a comment about your CMS. It could be written up as a violation of Regulation CC as well.
Take this opportunity to review everything about Regulation CC, from policies to procedures and disclosures. Your goal should be to make sure everything is consistent, compliant and reflects what you’re actually doing. This may even be a good time to implement any changes or updates to these practices that you’ve been thinking about.
Anders Banking and Financial Institutions advisors closely monitor new and updated regulations to keep clients informed and in full compliance with federal requirements. To learn more about our services, and the associated costs, request a meeting below.
