VIDEO: Requirements for Reg CC Lobby Disclosures
In this Compliance Clip (video), Adam talks about the requirements for lobby disclosures under Regulation CC. In other words, Adam discusses and gives examples of how the notice that tells customers about a bank’s hold practices should be displayed in a bank’s lobby area, based on the requirements of Regulation CC.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about the requirements for lobby disclosures under Regulation CC. We're talking about check holds, and the question we have is this: What are the lobby disclosure requirements for Regulation CC? These are the disclosure requirements that tell customers what our hold practices are and, of course, there are some requirements. So where do those come from? Those, of course, come from Regulation CC which is 229.18 since that regulation is still owned by the Federal Reserve. That's the numbering for that rule.
What the requirement says is this. It says, “A bank shall post in a conspicuous place in each location where its employees receive deposits to a consumer account a notice that sets forth the time periods applicable to the availability of funds deposited into a consumer account.” That is the requirement under 229.18. It doesn't give us a lot of guidance as to specifics, so what we can do is look at the commentary to 229.18 that tells us a number of things.
First of all, it says that the requirement is for a disclosure to be at each location where its employees accept consumer deposits - so each location. Now what does that mean? Specifically, they give us some guidance that we'll talk about in another bullet point in just a minute. It goes on. It says it must specifically state the availability periods in the disclosure, which we're going to use a model form and we'll see that on the next slide so it's not a big deal. But what the commentary then tells us is that the disclosure does not need to be posted at each teller window, but in a central location that's likely to be seen.
As an auditor over the years, I've been into many branches looking for the Reg CC lobby disclosure, and typically, what you see is you'll see it somewhere on the teller window. Sometimes it's at every single teller station. Sometimes it's actually glued onto the wall in front of the teller windows, so you have it at each teller station. Other times it's a document that's kind of printed out and set on top of the windows by the teller station, so it could be removed. And sometimes over the Christmas period when there's Christmas decorations, it disappears. But what I've seen before is I've seen sometimes you have the disclosure on the far end of the teller line. Well, that's not “at each location” that's likely to be seen. If you've got ten teller windows, it shouldn't be at the far end. You should probably have one in the middle and a couple more dispersed throughout. What I like to do as a rule of thumb is if you have two teller stations, you could put one in the middle. So then you basically have a teller station, one, a teller station, and then a teller station, one, a teller station. So wherever your customer is, they can see the disclosure pretty easily and that’s something that would appease an examiner. Now, it is subjective as to what’s “likely to be seen” but if it's’ at the far end and all the stations are closed down there and the line forms this way, that’s going to be a problem.
The other thing they tell us what we can do is instead of putting at the teller windows, we can actually put it somewhere else, like put it at the point where the line forms for teller service in the lobby. So if you have a line, you can stick it on the very end of the line and create a disclosure form that stands right by the starting place to your line and that would be appropriate as well. So that's what the commentary tells us as far as the lobby disclosures for Regulation CC.
The commentary also explains that we do not have to have the Reg CC notice in our drive-through or night drop locations. It is not required in the night drop and is also not required in drive-throughs. So that is something that is not required.
Now as far as the model notice, the regulation itself gives us a sample notice that sort of provides this safe harbor for us. It is found in Appendix C where all the model notices are for Regulation CC. Specifically, there are two notices for us to choose from. The first notice is Model Form C=17 which provides the maximum statutory limits. A few banks may provide a blanket hold policy where they provide holds on all deposits, and in that case you'll be using this C-17 form. But most financial institutions don't do that. What they do is use C-18 which is for financial institutions that use case by case holds. And that's the model form that you would use.
I hope that answers any questions you have relating to the Regulation CC notices that are required to be placed in the lobby.
That's all I have for you for this Compliance Clip.