10-Step Implementation Plan for Reg CC Changes
As of July 1, 2020, all financial institutions will have to make changes to comply with the June 2019 amendments to Regulation CC. While these amendments may appear minor upon first review, the impact to financial institutions could be quite significant for two reasons. First, training front line employees (i.e. tellers) will be challenging as the new rules aren’t nearly as intuitive as they were before. Secondly, there are quite a few steps that need to be taken to ensure compliance with the Reg CC amendments.
Therefore, this video provides a simple 10-step implementation plan that financial institutions can use to assist with the change process.
In addition to this video, we have written an article that provides both a summary of the new rules as well as the ten steps that should be considered when implementing changes to comply with the Regulation CC amendments. You can view that article here.
Furthermore, we have created a training program to assist managers and compliance officers in training their front line. Our Regulation CC Training for Tellers is a quick and easy way to ensure your tellers know everything related to funds availability as of July 1, 2020. You can view our Regulation CC Training for Tellers program by clicking here.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to give you a quick 10-step implementation plan to implement the new changes for Regulation CC. Of course, these changes are required by July 1, 2020 and include threshold changes where there's changes in the dollar amounts to some of the thresholds used for holds like the $200 amount, the $5,000 amount, and the $400 amount, which are all changing. We actually have in our store a very comprehensive program, we actually have a couple programs that talk about these changes. One of those is our Reg CC Training for Tellers, where we go through in detail all of the changes that took place. Plus, we actually talk about Reg CC in general. It's a great time now to do retraining for all of your tellers so they understand the rules for Regulation CC. And in that program, we actually have a whole bunch of resources. We've got a test, we've got a manual you can download, videos that you can download that you can pass on to your tellers so they can watch at their station. A lot of different things for you to check out there. But while training I believe is gonna be the hardest part of this, in order for you as a compliance professional to implement this, you need to figure out what steps need to be taken for you to comply by the deadline of July 1, 2020. This video is gonna talk, quickly, about some steps that you can consider and I've put together 10 of those.
The first step for you to consider is, number one, create a timeline for implementation. You really wanna make sure that you're gonna meet that July first date. So you wanna back up everything with that July first date as your implementation. You'll see steps two through nine are the things you really need to put down in that timeline. So you can start with a separate piece of paper, kind of map out a timeline and do that, if you want after this video is over.
Step two is really the first thing you need to do to take action. This includes updating your policies and procedures. When July 1, 2020 comes around and you implement this change, you really want your board-approved policy to align with your practices. So it'll be a good idea, for between now and July 1, 2020, to have your board approve the changes in your policy. It will be approved possibly before you implement those changes, so just write a little provision in your policy that says these changes will be effective on July 1, 2020, or sooner, depending on when management chooses to implement these changes, something like that. So update your policy, take it to the Board, and that's really the first thing you need to do to take action, but that's step two of our 10 step plan.
Step three is to update your new account disclosures. The disclosures you give to your customers reference the old threshold amounts of $200 and $5,000. You need to update those so that customers, as of the time you implement this, get those updated changes.
Step four is to update your hold notices. Yes, some of your hold notices reference these dollar thresholds. Specifically, if some of you are using the model form found in Regulation CC for your whole notices, you'll see that there's a reference to the $5,000 threshold. So take a look at your notices. See if there's dollar references in there and update those as needed.
Step five relates to our lobby disclosures. Most of you are gonna have to make any changes, but some of you do have references to these dollar amounts of the threshold amounts that you have for holding either case-by-case holds or special exception holds, and you will have to update your lobby notices, your lobby disclosures, so take a look at those and see if they need updated.
Step six, then, is to send change notices out to your customers. This is very important. You need to do this because Regulation CCC says that anytime you make a change, you have to let your customers know. Fortunately, this change benefits customers since we're giving them more funds available in a sooner amount of time, that means that this change must be disclosed to customers no later than 30 days after the date we implement the change. Your last possible option to implement this change is gonna be July 31, 2020 assuming that you implement the change on July 1, 2020. So you're gonna have to send notices to your customers. There’s a couple different ways to do that, but you're gonna want to plan for that.
Step seven is you're going to want to update your IT systems and your review procedures when a hold is placed on the system. You're going to want to make sure your IT system can do what it needs to do as of July 1, 2020, and anybody who's reviewing holds to make sure they're put on properly needs to be aware of these changes. You'll need to update those procedures as well.
Step eight then is to conduct training. I will tell you from experience, and I said before we put together this Reg CC Training for Tellers program, that this is actually a little more challenging than what you're going to expect because the dollar thresholds don't line up as easily as they used to. 225 just isn't a round number 5,525 is not round, and I can bet that this is going to create a lot of confusion and a lot of errors for your tellers when they're placing holds. So the best thing you can do is to give examples, example after example, after example, that's exactly what we've done in our Reg CC Training for Tellers. And like I said, this is a great time to train your tellers on all of Reg CC. Again, a lot of your tellers haven't been trained for years and frankly, they might be missing something. They might not know exactly what they can and can't do when it comes to certain situations. So it's a great time to revisit Regulation CC As it will be as of July 1, 2020, and our Reg CC training for tellers program does exactly that. If you're interested, it's in our store compliancecohort.com/store.
Step nine for implementing these Regulation CC changes by July 1, 2020 is to update your board and senior management. Once you have made these changes, of course, you're gonna have the policy pre approved, but once you've made these changes, you want to update your board and let them know what has been done. This is just a good practice as part of your compliance management system. And your CMS is something your examiners are looking at, and by updating your board of these changes, this is just another way you're going to prove that you have a strong CMS and you're doing what you need to do in your compliance function.
Finally, step 10, what do you think it is? Guess? Step 10 is to plan for testing. You wanna make sure that your upcoming audits and reviews include these new threshold amounts. So you wanna plan to test this, to make sure the change sticks. I would not wait more than just a month or two, beyond that your auditors and examiners will start to come in and test this. I would test this as soon as you have a decent sample size and start testing this right away. For some of you it could be just a couple of weeks. So plan for testing.
Those are your 10 steps. I hope that makes your life easier when it comes to implementing these new Regulation CC changes. And again, if you need assistance in training your tellers, we've got a simple solution. It will save you hours upon hours upon hours, and that is found in our store at compliancecohort.com/store. And it's called Reg CC Training for Tellers.
That's all we have for you today in this Compliance Clip.