Representative Carolyn B. Maloney (D-N.Y.), a member of the House Financial Services Committee, has sponsored H.R. 5410, the Consumer Checking Account Fairness Act (CCAF), to "redress imbalances" between the speed of withdrawals under Check 21 and the slower speed of crediting deposits. "Constituents are asking me, 'Why is it taking so long?'," says Rep. Maloney.
The CCAF Act would instruct the Federal Reserve to reduce the time period that banks can hold checks, taking into account the increased speed of clearing checks as a result of Check 21. "Our institutions can now process the checks that we write electronically, and deduct that money from consumers' accounts immediately," says Rep. Maloney. "Why are some of these banks allowed to hold the checks we deposit for days?"
Since many banks have yet to take advantage of the provisions of Check 21, the Federal Reserve would have the latitude to craft regulations that take into account the status of the bank's back office.
Other provisions would:
- Require banks to clear state-issued checks at the ATM by the following business day;
- Prevent banks from assessing overdraft fees when there are offsetting uncleared deposits that have been provisionally settled. (To illustrate, if a check is deposited on Monday, the customer should be able to write a check against that amount on Tuesday, if not the same day, without incurring overdraft fees.)
- Require that credits be posted before debits during end-of-day processing for personal or household checking accounts.
- Count Saturday as a business day in calculating the date of funds availability for a deposit, at institutions that also debit checking accounts on Saturday.
- Make funds available on the second day after deposit for a non-local check.
- Adjust the limit for additional hold times from $5,000 to $7,500.
- Make available the first $500 of deposits on any given business day.
- Prevent banks from imposing fees for 'bounce protection' unless a customer affirmatively requests it.
- Establish a national minimum basis of consumer protection.