§4003 Safeguard exceptions

Summary

For new bank accounts, money you deposit gets special timing rules for the first 30 days (or a shorter time if the regulators set one). Cash, wire transfers, and certain bank or traveler’s checks and some government checks must be made available faster. Other checks follow the normal hold rules. If those bank-type checks total more than $5,000 in one deposit, only the first $5,000 gets the faster treatment and any extra must be available within 8 business days. The Federal Reserve Board and the Director of the Consumer Financial Protection Bureau can make exceptions to these timing rules for things like one-day deposits over $5,000, checks that bounced and then were redeposited, and accounts that are often overdrawn. They can also suspend the rules for a whole class of checks for up to 45 days (weekends, holidays, and days Congress is out are not counted). If they suspend the rules, they must report to the House and Senate banking committees within 10 days with reasons, evidence, and examples. A bank may delay funds if it has good reason to think a check won’t clear, but it must give written notice, keep records, and examiners must check that banks follow these rules. If the bank failed to give the required notice and an overdraft happened only because the funds were held, the bank can’t charge an overdraft fee once the check is collected. Notices must be given right away in person or mailed by the next business day, with special timing for emergencies or other exceptions.