Banking Regulations for Check Cashing

Bank check cashing regulations necessitate that financial services companies provide customers with a printed overview of the types of features and limitations associated with their account. Regulations also require that financial institutions strictly adhere to established policies and procedures around individual and business transactions like making deposits and withdrawals, paying fees and interests and cashing checks.

Compliance and Employee Training

The U.S. Federal Reserve Board stipulates that banking institutions are to create procedures that comply with "Regulation CC, Availability of Funds and Collection of Checks." Banks must ensure that all of their employees who perform work in relation to the regulation have and review a copy of the procedures. These employees must also be trained on disclosures related to the bank's procedures and review the disclosures with customers when they open checking and other accounts at the bank. Prior to adjusting or changing terms on a customer's existing checking account, banks must communicate the change to the customer 30 days before the change takes effect. If the change positively impacts the customer's available funds to cash checks, the bank must inform the customer of the change within 30 days of making the change.

Policy Posting

Banking institutions are required to post or advertise account policies and procedures in a conspicuous area so all employees who accept customer deposits and cash checks readily have access to the posting. The posting is to be in an area of the bank that customers can easily see as well. The notice is to clearly define the dates that deposits are available for customers to cash checks against. The notice does not have to be posted at drive-through teller windows but must be posted at all automated teller machines.

Notices on Deposit Slips

Bank deposit slips must include a notice about the availability of deposits for check cashing and automatic withdrawals. Notices must be printed on the front of customer preprinted deposit slips and state that all deposits might not be immediately available for check cashing. On some preprinted deposit slips, this notice is directly beneath the date line. Banking institutions are not required to print the notice on general deposit slips made available to all customers at the bank. Banking institutions also are not required to print the notice on deposit slips that customers get from a source outside the institution.

Availability of Funds

Regulation CC requires that banking institutions communicate to customers when money deposited into their accounts will be available for check cashing or automatic withdrawal. Availability dates must be on a weekday, Monday through Friday, and not on a federal holiday. Cash, electronic, United States Treasury checks, post office money orders, Federal Reserve Bank checks, in-state government checks and cashier's, teller or certified check in-person deposits shall be made available to the customer for check cashing and other withdrawal types on the first business day following the banking day the deposit was made on. Additionally, checks drawn against an account held by the banking institution and the first $100 of checks deposited in person by the customer must be available for the customer to cash checks against or to make other withdrawals from on the next banking business day. Funds from deposits made at an ATM that the banking institution holding the customer's checking account does not own do not have to be available for check cashing until the fifth banking business day.

Delayed Fund Availability

The Federal Reserve Board allows banking institutions to delay the availability of some deposit types before you can cash checks against the deposits. Generally, the delay can be up to as much as 10 additional banking business days or for 11 total banking business days. Delays can be made for on-us checks and nonlocal checks. Before banking institutions can delay the availability of deposited monies over an extended period of time, the institution must communicate to customers when the funds will be available for check cashing and the reason the availability of the funds is being delayed.
Cash and electronic payments that can be delayed for availability are deposits of more than $5,000, redeposited checks, accounts that the customer has repeatedly overdrawn, postdated checks or other checks the bank has reasonable doubt might have sufficient funds to be covered and checks deposited at the time of emergency situations like earthquakes and tornadoes. Banking institutions can also delay fund availability for check cashing on newly opened bank accounts or accounts that have not been opened for 30 days yet.