US (United States) Code. Title 42. Chapter 41: Expedited funds availability

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Banks and banking

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12 USC CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

.

-HEAD-

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-MISC1-

Sec.

4001. Definitions.

4002. Expedited funds availability schedules.

(a) Next business day availability for certain

deposits.

(b) Permanent schedule.

(c) Temporary schedule.

(d) Time period adjustments.

(e) Deposits at ATM.

(f) Check return; notice of nonpayment.

4003. Safeguard exceptions.

(a) New accounts.

(b) Large or redeposited checks; repeated overdrafts.

(c) Reasonable cause exception.

(d) Emergency conditions.

(e) Prevention of fraud losses.

(f) Notice of exception; availability within

reasonable time.

4004. Disclosure of funds availability policies.

(a) Notice for new accounts.

(b) Preprinted deposit slips.

(c) Mailing of notice.

(d) Posting of notice.

(e) Notice of interest payment policy.

(f) Model disclosure forms.

4005. Payment of interest.

(a) In general.

(b) Special rule for credit unions.

(c) Exception for checks returned unpaid.

4006. Miscellaneous provisions.

(a) After-hours deposits.

(b) Availability at start of business day.

(c) Effect on policies of depository institutions.

(d) Prohibition on freezing certain funds in an

account.

(e) Employee training on and compliance with

requirements of this chapter.

4007. Effect on State law.

(a) In general.

(b) Override on certain State laws.

4008. Regulations and reports by Board.

(a) In general.

(b) Regulations relating to improvement of check

processing system.

(c) Regulatory responsibility of Board for payment

system.

(d) Reports.

(e) Consultation.

(f) Electronic clearinghouse study.

4009. Administrative enforcement.

(a) Administrative enforcement.

(b) Additional powers.

(c) Enforcement by Board.

(d) Procedural rules.

4010. Civil liability.

(a) Civil liability.

(b) Class action awards.

(c) Bona fide errors.

(d) Jurisdiction.

(e) Reliance on Board rulings.

(f) Authority to establish rules regarding losses and

liability among depository institutions.

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12 USC Sec. 4001 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4001. Definitions

-STATUTE-

For purposes of this chapter -

(1) Account

The term ''account'' means a demand deposit account or other

similar transaction account at a depository institution.

(2) Board

The term ''Board'' means the Board of Governors of the Federal

Reserve System.

(3) Business day

The term ''business day'' means any day other than a Saturday,

Sunday, or legal holiday.

(4) Cash

The term ''cash'' means United States coins and currency,

including Federal Reserve notes.

(5) Cashier's check

The term ''cashier's check'' means any check which -

(A) is drawn on a depository institution;

(B) is signed by an officer or employee of such depository

institution; and

(C) is a direct obligation of such depository institution.

(6) Certified check

The term ''certified check'' means any check with respect to

which a depository institution certifies that -

(A) the signature on the check is genuine; and

(B) such depository institution has set aside funds which -

(i) are equal to the amount of the check; and

(ii) will be used only to pay such check.

(7) Check

The term ''check'' means any negotiable demand draft drawn on

or payable through an office of a depository institution located

in the United States. Such term does not include noncash items.

(8) Check clearinghouse association

The term ''check clearinghouse association'' means any

arrangement by which participant depository institutions exchange

deposited checks on a local basis, including an entire

metropolitan area, without using the check processing facilities

of the Federal Reserve System.

(9) Check processing region

The term ''check processing region'' means the geographical

area served by a Federal Reserve bank check processing center or

such larger area as the Board may prescribe by regulations.

(10) Consumer account

The term ''consumer account'' means any account used primarily

for personal, family, or household purposes.

(11) Depository check

The term ''depository check'' means any cashier's check,

certified check, teller's check, and any other functionally

equivalent instrument as determined by the Board.

(12) Depository institution

The term ''depository institution'' has the meaning given such

term in clauses (i) through (vi) of section 461(b)(1)(A) of this

title. Such term also includes an office, branch, or agency of a

foreign bank located in the United States.

(13) Local originating depository institution

The term ''local originating depository institution'' means any

originating depository institution which is located in the same

check processing region as the receiving depository institution.

(14) Noncash item

The term ''noncash item'' means -

(A) a check or other demand item to which a passbook,

certificate, or other document is attached;

(B) a check or other demand item which is accompanied by

special instructions, such as a request for special advise of

payment or dishonor; or

(C) any similar item which is otherwise classified as a

noncash item in regulations of the Board.

(15) Nonlocal originating depository institution

The term ''nonlocal originating depository institution'' means

any originating depository institution which is not a local

depository institution.

(16) Proprietary ATM

The term ''proprietary ATM'' means an automated teller machine

which is -

(A) located -

(i) at or adjacent to a branch of the receiving depository

institution; or

(ii) in close proximity, as defined by the Board, to a

branch of the receiving depository institution; or

(B) owned by, operated exclusively for, or operated by the

receiving depository institution.

(17) Originating depository institution

The term ''originating depository institution'' means the

branch of a depository institution on which a check is drawn.

(18) Nonproprietary ATM

The term ''nonproprietary ATM'' means an automated teller

machine which is not a proprietary ATM.

(19) Participant

The term ''participant'' means a depository institution which -

(A) is located in the same geographic area as that served by

a check clearinghouse association; and

(B) exchanges checks through the check clearinghouse

association, either directly or through an intermediary.

(20) Receiving depository institution

The term ''receiving depository institution'' means the branch

of a depository institution or the proprietary ATM in which a

check is first deposited.

(21) State

The term ''State'' means any State, the District of Columbia,

the Commonwealth of Puerto Rico, or the Virgin Islands.

(22) Teller's check

The term ''teller's check'' means any check issued by a

depository institution and drawn on another depository

institution.

(23) United States

The term ''United States'' means the several States, the

District of Columbia, the Commonwealth of Puerto Rico, and the

Virgin Islands.

(24) Unit of general local government

The term ''unit of general local government'' means any city,

county, town, township, parish, village, or other general purpose

political subdivision of a State.

(25) Wire transfer

The term ''wire transfer'' has such meaning as the Board shall

prescribe by regulations.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 602, Aug. 10, 1987, 101 Stat. 635.)

-REFTEXT-

REFERENCES IN TEXT

This chapter, referred to in text, was in the original ''this

title'', meaning title VI of Pub. L. 100-86, Aug. 10, 1987, 101

Stat. 635, known as the Expedited Funds Availability Act, which

enacted this chapter, amended section 248a of this title, and

enacted provisions set out as notes under sections 248a and 4001 of

this title. For complete classification of this Act to the Code,

see Short Title note below and Tables.

-MISC2-

EFFECTIVE DATE

Section 613 of title VI of Pub. L. 100-86 provided that:

''(a) Date of Enactment. - Except as provided in subsection (b),

this title (enacting this chapter, amending section 248a of this

title, and enacting provisions set out as notes under sections 248a

and 4001 of this title) shall take effect on the date of the

enactment of this title (Aug. 10, 1987).

''(b) 1 Year After Date of Enactment. - Sections 603, 604, 605,

606, 610, and 611 (enacting sections 4002 to 4005, 4009, and 4010

of this title) shall take effect on September 1, 1988.''

SHORT TITLE

Section 601 of title VI of Pub. L. 100-86 provided that: ''This

title (enacting this chapter, amending section 248a of this title,

and enacting provisions set out as notes under sections 248a and

4001 of this title) may be cited as the 'Expedited Funds

Availability Act'.''

SEPARABILITY

If any provision of Pub. L. 100-86 or the application thereof to

any person or circumstances is held invalid, the remainder of Pub.

L. 100-86 and the application of the provision to other persons not

similarly situated or to other circumstances not to be affected

thereby, see section 1205 of Pub. L. 100-86, set out as a note

under section 226 of this title.

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12 USC Sec. 4002 01/06/03

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TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4002. Expedited funds availability schedules

-STATUTE-

(a) Next business day availability for certain deposits

(1) Cash deposits; wire transfers

Except as provided in subsection (e) of this section and in

section 4003 of this title, in any case in which -

(A) any cash is deposited in an account at a receiving

depository institution staffed by individuals employed by such

institution, or

(B) funds are received by a depository institution by wire

transfer for deposit in an account at such institution,

such cash or funds shall be available for withdrawal not later

than the business day after the business day on which such cash

is deposited or such funds are received for deposit.

(2) Government checks; certain other checks

Funds deposited in an account at a depository institution by

check shall be available for withdrawal not later than the

business day after the business day on which such funds are

deposited in the case of -

(A) a check which -

(i) is drawn on the Treasury of the United States; and

(ii) is endorsed only by the person to whom it was issued;

(B) a check which -

(i) is drawn by a State;

(ii) is deposited in a receiving depository institution

which is located in such State and is staffed by individuals

employed by such institution;

(iii) is deposited with a special deposit slip which

indicates it is a check drawn by a State; and

(iv) is endorsed only by the person to whom it was issued;

(C) a check which -

(i) is drawn by a unit of general local government;

(ii) is deposited in a receiving depository institution

which is located in the same State as such unit of general

local government and is staffed by individuals employed by

such institution;

(iii) is deposited with a special deposit slip which

indicates it is a check drawn by a unit of general local

government; and

(iv) is endorsed only by the person to whom it was issued;

(D) the first $100 deposited by check or checks on any one

business day;

(E) a check deposited in a branch of a depository institution

and drawn on the same or another branch of the same depository

institution if both such branches are located in the same State

or the same check processing region;

(F) a cashier's check, certified check, teller's check, or

depository check which -

(i) is deposited in a receiving depository institution

which is staffed by individuals employed by such institution;

(ii) is deposited with a special deposit slip which

indicates it is a cashier's check, certified check, teller's

check, or depository check, as the case may be; and

(iii) is endorsed only by the person to whom it was issued.

(b) Permanent schedule

(1) Availability of funds deposited by local checks

Subject to paragraph (3) of this subsection, subsections

(a)(2), (d), and (e) of this section, and section 4003 of this

title, not more than 1 business day shall intervene between the

business day on which funds are deposited in an account at a

depository institution by a check drawn on a local originating

depository institution and the business day on which the funds

involved are available for withdrawal.

(2) Availability of funds deposited by nonlocal checks

Subject to paragraph (3) of this subsection, subsections

(a)(2), (d), and (e) of this section, and section 4003 of this

title, not more than 4 business days shall intervene between the

business day on which funds are deposited in an account at a

depository institution by a check drawn on a nonlocal originating

depository institution and the business day on which such funds

are available for withdrawal.

(3) Time period adjustments for cash withdrawal of certain checks

(A) In general

Except as provided in subparagraph (B), funds deposited in an

account in a depository institution by check (other than a

check described in subsection (a)(2) of this section) shall be

available for cash withdrawal not later than the business day

after the business day on which such funds otherwise are

available under paragraph (1) or (2).

(B) 5 p.m. cash availability

Not more than $400 (or the maximum amount allowable in the

case of a withdrawal from an automated teller machine but not

more than $400) of funds deposited by one or more checks to

which this paragraph applies shall be available for cash

withdrawal not later than 5 o'clock post meridian of the

business day on which such funds are available under paragraph

(1) or (2). If funds deposited by checks described in both

paragraph (1) and paragraph (2) become available for cash

withdrawal under this paragraph on the same business day, the

limitation contained in this subparagraph shall apply to the

aggregate amount of such funds.

(C) $100 availability

Any amount available for withdrawal under this paragraph

shall be in addition to the amount available under subsection

(a)(2)(D) of this section.

(4) Applicability

This subsection shall apply with respect to funds deposited by

check in an account at a depository institution on or after

September 1, 1990, except that the Board may, by regulation, make

this subsection or any part of this subsection applicable earlier

than September 1, 1990.

(c) Temporary schedule

(1) Availability of local checks

(A) In general

Subject to subparagraph (B) of this paragraph, subsections

(a)(2), (d), and (e) of this section, and section 4003 of this

title, not more than 2 business days shall intervene between

the business day on which funds are deposited in an account at

a depository institution by a check drawn on a local

originating depository institution and the business day on

which such funds are available for withdrawal.

(B) Time period adjustment for cash withdrawal of certain

checks

(i) In general

Except as provided in clause (ii), funds deposited in an

account in a depository institution by check drawn on a local

depository institution that is not a participant in the same

check clearinghouse association as the receiving depository

institution (other than a check described in subsection

(a)(2) of this section) shall be available for cash

withdrawal not later than the business day after the business

day on which such funds otherwise are available under

subparagraph (A).

(ii) 5 p.m. cash availability

Not more than $400 (or the maximum amount allowable in the

case of a withdrawal from an automated teller machine but not

more than $400) of funds deposited by one or more checks to

which this subparagraph applies shall be available for cash

withdrawal not later than 5 o'clock post meridian of the

business day on which such funds are available under

subparagraph (A).

(iii) $100 availability

Any amount available for withdrawal under this subparagraph

shall be in addition to the amount available under subsection

(a)(2)(D) of this section.

(2) Availability of nonlocal checks

Subject to subsections (a)(2), (d), and (e) of this section and

section 4003 of this title, not more than 6 business days shall

intervene between the business day on which funds are deposited

in an account at a depository institution by a check drawn on a

nonlocal originating depository institution and the business day

on which such funds are available for withdrawal.

(3) Applicability

This subsection shall apply with respect to funds deposited by

check in an account at a depository institution after August 31,

1988, and before September 1, 1990, except as may be otherwise

provided under subsection (b)(4) of this section.

(d) Time period adjustments

(1) Reduction generally

Notwithstanding any other provision of law, the Board shall, by

regulation, reduce the time periods established under subsections

(b), (c), and (e) of this section to as short a time as possible

and equal to the period of time achievable under the improved

check clearing system for a receiving depository institution to

reasonably expect to learn of the nonpayment of most items for

each category of checks.

(2) Extension for certain deposits in noncontiguous States or

territories

Notwithstanding any other provision of law, any time period

established under subsection (b), (c), or (e) of this section

shall be extended by 1 business day in the case of any deposit

which is both -

(A) deposited in an account at a depository institution which

is located in Alaska, Hawaii, Puerto Rico, or the Virgin

Islands; and

(B) deposited by a check drawn on an originating depository

institution which is not located in the same State,

commonwealth, or territory as the receiving depository

institution.

(e) Deposits at ATM

(1) Nonproprietary ATM

(A) In general

Not more than 4 business days shall intervene between the

business day a deposit described in subparagraph (B) is made at

a nonproprietary automated teller machine (for deposit in an

account at a depository institution) and the business day on

which funds from such deposit are available for withdrawal.

(B) Deposits described in this paragraph (FOOTNOTE 1)

(FOOTNOTE 1) So in original. Probably should be

''subparagraph''.

A deposit is described in this subparagraph if it is -

(i) a cash deposit;

(ii) a deposit made by a check described in subsection

(a)(2) of this section;

(iii) a deposit made by a check drawn on a local

originating depository institution (other than a check

described in subsection (a)(2) of this section); or

(iv) a deposit made by a check drawn on a nonlocal

originating depository institution (other than a check

described in subsection (a)(2) of this section).

(2) Proprietary ATM - temporary and permanent schedules

The provisions of subsections (a), (b), and (c) of this section

shall apply with respect to any funds deposited at a proprietary

automated teller machine for deposit in an account at a

depository institution.

(3) Study and report on ATM's

The Board shall, either directly or through the Consumer

Advisory Council, establish and maintain a dialogue with

depository institutions and their suppliers on the computer

software and hardware available for use by automated teller

machines, and shall, not later than September 1 of each of the

first 3 calendar years beginning after August 10, 1987, report to

the Congress regarding such software and hardware and regarding

the potential for improving the processing of automated teller

machine deposits.

(f) Check return; notice of nonpayment

No provision of this section shall be construed as requiring

that, with respect to all checks deposited in a receiving

depository institution -

(1) such checks be physically returned to such depository

institution; or

(2) any notice of nonpayment of any such check be given to such

depository institution within the times set forth in subsection

(a), (b), (c), or (e) of this section or in the regulations

issued under any such subsection.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 603, Aug. 10, 1987, 101 Stat. 637;

Pub. L. 101-625, title X, Sec. 1001, Nov. 28, 1990, 104 Stat. 4424;

Pub. L. 102-242, title II, Sec. 227(a), (b)(1), Dec. 19, 1991, 105

Stat. 2307.)

-MISC1-

AMENDMENTS

1991 - Subsec. (e)(1). Pub. L. 102-242, Sec. 227(b)(1)(A), struck

out '' - temporary schedule'' after ''ATM'' in heading.

Subsec. (e)(1)(C). Pub. L. 102-242, Sec. 227(a), struck out

subpar. (C) which read as follows: ''This paragraph shall apply

with respect to funds deposited at a nonproprietary automated

teller machine after August 31, 1988, and prior to the expiration

of the 2-year period beginning on November 28, 1990.''

Subsec. (e)(2) to (4). Pub. L. 102-242, Sec. 227(a), (b)(1)(B),

redesignated pars. (3) and (4) as (2) and (3), respectively, and

struck out former par. (2) which related to permanent schedule for

funds deposited at nonproprietary automated teller machines.

1990 - Subsec. (e)(1)(A). Pub. L. 101-625, Sec. 1001(1),

substituted ''4'' for ''6''.

Subsec. (e)(1)(C). Pub. L. 101-625, Sec. 1001(2), substituted

''prior to the expiration of the 2-year period beginning on

November 28, 1990'' for ''before September 1, 1990''.

Subsec. (e)(2)(D). Pub. L. 101-625, Sec. 1001(3), substituted

''the expiration of the 2-year period beginning on November 28,

1990'' for ''September 1, 1990''.

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4003, 4006, 4008 of this

title.

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12 USC Sec. 4003 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4003. Safeguard exceptions

-STATUTE-

(a) New accounts

Notwithstanding section 4002 of this title, in the case of any

account established at a depository institution by a new depositor,

the following provisions shall apply with respect to any deposit in

such account during the 30-day period (or such shorter period as

the Board may establish) beginning on the date such account is

established -

(1) Next business day availability of cash and certain items

Except as provided in paragraph (3), in the case of -

(A) any cash deposited in such account;

(B) any funds received by such depository institution by wire

transfer for deposit in such account;

(C) any funds deposited in such account by cashier's check,

certified check, teller's check, depository check, or

traveler's check; and

(D) any funds deposited by a government check which is

described in subparagraph (A), (B), or (C) of section

4002(a)(2) of this title,

such cash or funds shall be available for withdrawal on the

business day after the business day on which such cash or funds

are deposited or, in the case of a wire transfer, on the business

day after the business day on which such funds are received for

deposit.

(2) Availability of other items

In the case of any funds deposited in such account by a check

(other than a check described in subparagraph (C) or (D) of

paragraph (1)), the availability for withdrawal of such funds

shall not be subject to the provisions of section 4002(b),

4002(c), or paragraphs (FOOTNOTE 1) (1) of section 4002(e) of

this title.

(FOOTNOTE 1) So in original. Probably should be ''paragraph''.

(3) Limitation relating to certain checks in excess of $5,000

In the case of funds deposited in such account during such

period by checks described in subparagraph (C) or (D) of

paragraph (1) the aggregate amount of which exceeds $5,000 -

(A) paragraph (1) shall apply only with respect to the first

$5,000 of such aggregate amount; and

(B) not more than 8 business days shall intervene between the

business day on which any such funds are deposited and the

business day on which such excess amount shall be available for

withdrawal.

(b) Large or redeposited checks; repeated overdrafts

The Board may, by regulation, establish reasonable exceptions to

any time limitation established under subsection (a)(2), (b), (c),

or (e) of section 4002 of this title for -

(1) the amount of deposits by one or more checks that exceeds

the amount of $5,000 in any one day;

(2) checks that have been returned unpaid and redeposited; and

(3) deposit accounts which have been overdrawn repeatedly.

(c) Reasonable cause exception

(1) In general

In accordance with regulations which the Board shall prescribe,

subsections (a)(2), (b), (c), and (e) of section 4002 of this

title shall not apply with respect to any check deposited in an

account at a depository institution if the receiving depository

institution has reasonable cause to believe that the check is

uncollectible from the originating depository institution. For

purposes of the preceding sentence, reasonable cause to believe

requires the existence of facts which would cause a well-grounded

belief in the mind of a reasonable person. Such reasons shall be

included in the notice required under subsection (f) of this

section.

(2) Basis for determination

No determination under this subsection may be based on any

class of checks or persons.

(3) Overdraft fees

If the receiving depository institution determines that a check

deposited in an account is a check described in paragraph (1),

the receiving depository institution shall not assess any fee for

any subsequent overdraft with respect to such account, if -

(A) the depositor was not provided with the written notice

required under subsection (f) of this section (with respect to

such determination) at the time the deposit was made;

(B) the overdraft would not have occurred but for the fact

that the funds so deposited are not available; and

(C) the amount of the check is collected from the originating

depository institution.

(4) Compliance

Each agency referred to in section 4009(a) of this title shall

monitor compliance with the requirements of this subsection in

each regular examination of a depository institution and shall

describe in each report to the Congress the extent to which this

subsection is being complied with. For the purpose of this

paragraph, each depository institution shall retain a record of

each notice provided under subsection (f) of this section as a

result of the application of this subsection.

(d) Emergency conditions

Subject to such regulations as the Board may prescribe,

subsections (a)(2), (b), (c), and (e) of section 4002 of this title

shall not apply to funds deposited by check in any receiving

depository institution in the case of -

(1) any interruption of communication facilities;

(2) suspension of payments by another depository institution;

(3) any war; or

(4) any emergency condition beyond the control of the receiving

depository institution,

if the receiving depository institution exercises such diligence as

the circumstances require.

(e) Prevention of fraud losses

(1) In general

The Board may, by regulation or order, suspend the

applicability of this chapter, or any portion thereof, to any

classification of checks if the Board determines that -

(A) depository institutions are experiencing an unacceptable

level of losses due to check-related fraud, and

(B) suspension of this chapter, or such portion of this

chapter, with regard to the classification of checks involved

in such fraud is necessary to diminish the volume of such

fraud.

(2) Sunset provision

No regulation prescribed or order issued under paragraph (1)

shall remain in effect for more than 45 days (excluding

Saturdays, Sundays, legal holidays, or any day either House of

Congress is not in session).

(3) Report to Congress

(A) Notice of each suspension

Within 10 days of prescribing any regulation or issuing any

order under paragraph (1), the Board shall transmit a report of

such action to the Committee on Banking, Finance and Urban

Affairs of the House of Representatives and the Committee on

Banking, Housing, and Urban Affairs of the Senate.

(B) Contents of report

Each report under subparagraph (A) shall contain -

(i) the specific reason for prescribing the regulation or

issuing the order;

(ii) evidence considered by the Board in making the

determination under paragraph (1) with respect to such

regulation or order; and

(iii) specific examples of the check-related fraud giving

rise to such regulation or order.

(f) Notice of exception; availability within reasonable time

(1) In general

If any exception contained in this section (other than

subsection (a) of this section) applies with respect to funds

deposited in an account at a depository institution -

(A) the depository institution shall provide notice in the

manner provided in paragraph (2) of -

(i) the time period within which the funds shall be made

available for withdrawal; and

(ii) the reason the exception was invoked; and

(B) except where other time periods are specifically provided

in this chapter, the availability of the funds deposited shall

be governed by the policy of the receiving depository

institution, but shall not exceed a reasonable period of time

as determined by the Board.

(2) Time for notice

The notice required under paragraph (1)(A) with respect to a

deposit to which an exception contained in this section applies

shall be made by the time provided in the following

subparagraphs:

(A) In the case of a deposit made in person by the depositor

at the receiving depository institution, the depository

institution shall immediately provide such notice in writing to

the depositor.

(B) In the case of any other deposit (other than a deposit

described in subparagraph (C)), the receiving depository

institution shall mail the notice to the depositor not later

than the close of the next business day following the business

day on which the deposit is received.

(C) In the case of a deposit to which subsection (d) or (e)

of this section applies, notice shall be provided by the

depository institution in accordance with regulations of the

Board.

(D) In the case of a deposit to which subsection (b)(1) or

(b)(2) of this section applies, the depository institution may,

for nonconsumer accounts and other classes of accounts, as

defined by the Board, that generally have a large number of

such deposits, provide notice at or before the time it first

determines that the subsection applies.

(E) In the case of a deposit to which subsection (b)(3) of

this section applies, the depository institution may, subject

to regulations of the Board, provide notice at the beginning of

each time period it determines that the subsection applies. In

addition to the requirements contained in paragraph (1)(A), the

notice shall specify the time period for which the exception

will apply.

(3) Subsequent determinations

If the facts upon which the determination of the applicability

of an exception contained in subsection (b) or (c) of this

section to any deposit only become known to the receiving

depository institution after the time notice is required under

paragraph (2) with respect to such deposit, the depository

institution shall mail such notice to the depositor as soon as

practicable, but not later than the first business day following

the day such facts become known to the depository institution.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 604, Aug. 10, 1987, 101 Stat. 642;

Pub. L. 102-242, title II, Sec. 225, 227(b)(2), Dec. 19, 1991, 105

Stat. 2307, 2308.)

-MISC1-

AMENDMENTS

1991 - Subsec. (a)(2). Pub. L. 102-242, Sec. 227(b)(2), struck

out ''and (2)'' after ''paragraphs (1)''.

Subsec. (b). Pub. L. 102-242, Sec. 225(1), inserted ''(a)(2),''

after ''subsection''.

Subsec. (c)(1). Pub. L. 102-242, Sec. 225(2), substituted

''(a)(2)'' for ''(a)(2)(F)''.

Subsec. (d). Pub. L. 102-242, Sec. 225(3), inserted ''(a)(2),''

after ''subsections''.

Subsec. (f)(1)(A)(i). Pub. L. 102-242, Sec. 225(4), substituted

''time period within which'' for ''day''.

Subsec. (f)(2)(D), (E). Pub. L. 102-242, Sec. 225(5), added

subpars. (D) and (E).

-CHANGE-

CHANGE OF NAME

Committee on Banking, Finance and Urban Affairs of House of

Representatives treated as referring to Committee on Banking and

Financial Services of House of Representatives by section 1(a) of

Pub. L. 104-14, set out as a note preceding section 21 of Title 2,

The Congress. Committee on Banking and Financial Services of House

of Representatives abolished and replaced by Committee on Financial

Services of House of Representatives, and jurisdiction over matters

relating to securities and exchanges and insurance generally

transferred from Committee on Energy and Commerce of House of

Representatives by House Resolution No. 5, One Hundred Seventh

Congress, Jan. 3, 2001.

-MISC4-

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 4002 of this title.

-CITE-

12 USC Sec. 4004 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4004. Disclosure of funds availability policies

-STATUTE-

(a) Notice for new accounts

Before an account is opened at a depository institution, the

depository institution shall provide written notice to the

potential customer of the specific policy of such depository

institution with respect to when a customer may withdraw funds

deposited into the customer's account.

(b) Preprinted deposit slips

All preprinted deposit slips that a depository institution

furnishes to its customers shall contain a summary notice, as

prescribed by the Board in regulations, that deposited items may

not be available for immediate withdrawal.

(c) Mailing of notice

(1) First mailing after enactment

In the first regularly scheduled mailing to customers occurring

after September 1, 1988, but not more than 60 days after

September 1, 1988, each depository institution shall send a

written notice containing the specific policy of such depository

institution with respect to when a customer may withdraw funds

deposited into such customer's account, unless the depository

institution has provided a disclosure which meets the

requirements of this section before September 1, 1988.

(2) Subsequent changes

A depository institution shall send a written notice to

customers at least 30 days before implementing any change to the

depository institution's policy with respect to when customers

may withdraw funds deposited into consumer accounts, except that

any change which expedites the availability of such funds shall

be disclosed not later than 30 days after implementation.

(3) Upon request

Upon the request of any person, a depository institution shall

provide or send such person a written notice containing the

specific policy of such depository institution with respect to

when a customer may withdraw funds deposited into a customer's

account.

(d) Posting of notice

(1) Specific notice at manned teller stations

Each depository institution shall post, in a conspicuous place

in each location where deposits are accepted by individuals

employed by such depository institution, a specific notice which

describes the time periods applicable to the availability of

funds deposited in a consumer account.

(2) General notice at automated teller machines

In the case of any automated teller machine at which any funds

are received for deposit in an account at any depository

institution, the Board shall prescribe, by regulations, that the

owner or operator of such automated teller machine shall post or

provide a general notice that funds deposited in such machine may

not be immediately available for withdrawal.

(e) Notice of interest payment policy

If a depository institution described in section 4005(b) of this

title begins the accrual of interest or dividends at a later date

than the date described in section 4005(a) of this title with

respect to all funds, including cash, deposited in an

interest-bearing account at such depository institution, any notice

required to be provided under subsections (a) and (c) of this

section shall contain a written description of the time at which

such depository institution begins to accrue interest or dividends

on such funds.

(f) Model disclosure forms

(1) Prepared by Board

The Board shall publish model disclosure forms and clauses for

common transactions to facilitate compliance with the disclosure

requirements of this section and to aid customers by utilizing

readily understandable language.

(2) Use of forms to achieve compliance

A depository institution shall be deemed to be in compliance

with the requirements of this section if such institution -

(A) uses any appropriate model form or clause as published by

the Board, or

(B) uses any such model form or clause and changes such form

or clause by -

(i) deleting any information which is not required by this

chapter; or

(ii) rearranging the format.

(3) Voluntary use

Nothing in this chapter requires the use of any such model form

or clause prescribed by the Board under this subsection.

(4) Notice and comment

Model disclosure forms and clauses shall be adopted by the

Board only after notice duly given in the Federal Register and an

opportunity for public comment in accordance with section 553 of

title 5.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 605, Aug. 10, 1987, 101 Stat. 644.)

-REFTEXT-

REFERENCES IN TEXT

After enactment, referred to in the heading of subsec. (c)(1),

probably means after the effective date of this section, which is

Sept. 1, 1988.

-MISC2-

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4005, 4009 of this title.

-CITE-

12 USC Sec. 4005 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4005. Payment of interest

-STATUTE-

(a) In general

Except as provided in subsection (b) or (c) of this section and

notwithstanding any other provision of law, interest shall accrue

on funds deposited in an interest-bearing account at a depository

institution beginning not later than the business day on which the

depository institution receives provisional credit for such funds.

(b) Special rule for credit unions

Subsection (a) of this section shall not apply to an account at a

depository institution described in section 461(b)(1)(A)(iv) of

this title if the depository institution -

(1) begins the accrual of interest or dividends at a later date

than the date described in subsection (a) of this section with

respect to all funds, including cash, deposited in such account;

and

(2) provides notice of the interest payment policy in the

manner required under section 4004(e) of this title.

(c) Exception for checks returned unpaid

No provision of this chapter shall be construed as requiring the

payment of interest or dividends on funds deposited by a check

which is returned unpaid.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 606, Aug. 10, 1987, 101 Stat. 646.)

-MISC1-

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4004, 4306 of this title.

-CITE-

12 USC Sec. 4006 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4006. Miscellaneous provisions

-STATUTE-

(a) After-hours deposits

For purposes of this chapter, any deposit which is made on a

Saturday, Sunday, legal holiday, or after the close of business on

any business day shall be deemed to have been made on the next

business day.

(b) Availability at start of business day

Except as provided in subsections (b)(3) and (c)(1)(B) of section

4002 of this title, if any provision of this chapter requires that

funds be available for withdrawal on any business day, such funds

shall be available for withdrawal at the start of such business

day.

(c) Effect on policies of depository institutions

No provision of this chapter shall be construed as -

(1) prohibiting a depository institution from making funds

available for withdrawal in a shorter period of time than the

period of time required by this chapter; or

(2) affecting a depository institution's right -

(A) to accept or reject a check for deposit;

(B) to revoke any provisional settlement made by the

depository institution with respect to a check accepted by such

institution for deposit;

(C) to charge back the depositor's account for the amount of

such check; or

(D) to claim a refund of such provisional credit.

(d) Prohibition on freezing certain funds in an account

In any case in which a check is deposited in an account at a

depository institution and the funds represented by such check are

not yet available for withdrawal pursuant to this chapter, the

depository institution may not freeze any other funds in such

account (which are otherwise available for withdrawal pursuant to

this chapter) solely because the funds so deposited are not yet

available for withdrawal.

(e) Employee training on and compliance with requirements of this

chapter

Each depository institution shall -

(1) take such actions as may be necessary fully to inform each

employee (who performs duties subject to the requirements of this

chapter) of the requirements of this chapter; and

(2) establish and maintain procedures reasonably designed to

assure and monitor employee compliance with such requirements.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 607, Aug. 10, 1987, 101 Stat. 646.)

-CITE-

12 USC Sec. 4007 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4007. Effect on State law

-STATUTE-

(a) In general

Any law or regulation of any State in effect on September 1,

1989, which requires that funds deposited or received for deposit

in an account at a depository institution chartered by such State

be made available for withdrawal in a shorter period of time than

the period of time provided in this chapter or in regulations

prescribed by the Board under this chapter (as in effect on

September 1, 1989) shall -

(1) supersede the provisions of this chapter and any

regulations by the Board to the extent such provisions relate to

the time by which funds deposited or received for deposit in an

account shall be available for withdrawal; and

(2) apply to all federally insured depository institutions

located within such State.

(b) Override of certain State laws

Except as provided in subsection (a) of this section, this

chapter and regulations prescribed under this chapter shall

supersede any provision of the law of any State, including the

Uniform Commercial Code as in effect in such State, which is

inconsistent with this chapter or such regulations.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 608, Aug. 10, 1987, 101 Stat. 647.)

-CITE-

12 USC Sec. 4008 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4008. Regulations and reports by Board

-STATUTE-

(a) In general

After notice and opportunity to submit comment in accordance with

section 553(c) of title 5, the Board shall prescribe regulations -

(1) to carry out the provisions of this chapter;

(2) to prevent the circumvention or evasion of such provisions;

and

(3) to facilitate compliance with such provisions.

(b) Regulations relating to improvement of check processing system

In order to improve the check processing system, the Board shall

consider (among other proposals) requiring, by regulation, that -

(1) depository institutions be charged based upon notification

that a check or similar instrument will be presented for payment;

(2) the Federal Reserve banks and depository institutions

provide for check truncation;

(3) depository institutions be provided incentives to return

items promptly to the depository institution of first deposit;

(4) the Federal Reserve banks and depository institutions take

such actions as are necessary to automate the process of

returning unpaid checks,

(5) each depository institution and Federal Reserve bank -

(A) place its endorsement, and other notations specified in

regulations of the Board, on checks in the positions specified

in such regulations; and

(B) take such actions as are necessary to -

(i) automate the process of reading endorsements; and

(ii) eliminate unnecessary endorsements;

(6) within one business day after an originating depository

institution is presented a check (for more than such minimum

amount as the Board may prescribe) -

(A) such originating depository institution determines

whether it will pay such check; and

(B) if such originating depository institution determines

that it will not pay such check, such originating depository

institution directly notify the receiving depository

institution of such determination;

(7) regardless of where a check is cleared initially, all

returned checks be eligible to be returned through the Federal

Reserve System;

(8) Federal Reserve banks and depository institutions

participate in the development and implementation of an

electronic clearinghouse process to the extent the Board

determines, pursuant to the study under subsection (f) of this

section, that such a process is feasible; and

(9) originating depository institutions be permitted to return

unpaid checks directly to, and obtain reimbursement for such

checks directly from, the receiving depository institution.

(c) Regulatory responsibility of Board for payment system

(1) Responsibility for payment system

In order to carry out the provisions of this chapter, the Board

of Governors of the Federal Reserve System shall have the

responsibility to regulate -

(A) any aspect of the payment system, including the receipt,

payment, collection, or clearing of checks; and

(B) any related function of the payment system with respect

to checks.

(2) Regulations

The Board shall prescribe such regulations as it may determine

to be appropriate to carry out its responsibility under paragraph

(1).

(d) Reports

(1) Implementation progress reports

(A) Required reports

The Board shall transmit a report to both Houses of the

Congress not later than 18, 30, and 48 months after August 10,

1987.

(B) Contents of report

Each such report shall describe -

(i) the actions taken and progress made by the Board to

implement the schedules established in section 4002 of this

title, and

(ii) the impact of this chapter on consumers and depository

institutions.

(2) Evaluation of temporary schedule report

(A) Report required

The Board shall transmit a report to both Houses of the

Congress not later than 2 years after August 10, 1987,

regarding the effects the temporary schedule established under

section 4002(c) of this title have had on depository

institutions and the public.

(B) Contents of report

Such report shall also assess the potential impact the

implementation of the schedule established in section 4002(b)

of this title will have on depository institutions and the

public, including an estimate of the risks to and losses of

depository institutions and the benefits to consumers. Such

report shall also contain such recommendations for legislative

or administrative action as the Board may determine to be

necessary.

(3) Comptroller General evaluation report

Not later than 6 months after September 1, 1988, the

Comptroller General of the United States shall transmit a report

to the Congress evaluating the implementation and administration

of this chapter.

(e) Consultation

In prescribing regulations under subsections (a) and (b) of this

section, the Board shall consult with the Comptroller of the

Currency, the Board of Directors of the Federal Deposit Insurance

Corporation, the Federal Home Loan Bank Board, and the National

Credit Union Administration Board.

(f) Electronic clearinghouse study

(1) Study required

The Board shall study the feasibility of modernizing and

accelerating the check payment system through the development of

an electronic clearinghouse process utilizing existing

telecommunications technology to avoid the necessity of actual

presentment of the paper instrument to a payor institution before

such institution is charged for the item.

(2) Consultation; factors to be studied

In connection with the study required under paragraph (1), the

Board shall -

(A) consult with appropriate experts in telecommunications

technology; and

(B) consider all practical and legal impediments to the

development of an electronic clearinghouse process.

(3) Report required

The Board shall report its conclusions to the Congress within 9

months of August 10, 1987.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 609, Aug. 10, 1987, 101 Stat. 647.)

-COD-

CODIFICATION

In subsec. (d)(3), ''September 1, 1988'' substituted for

''section 603(b) takes effect'' on authority of section 613(b) of

Pub. L. 100-86, set out as an Effective Date note under section

4001 of this title.

-TRANS-

TRANSFER OF FUNCTIONS

Federal Home Loan Bank Board abolished and functions transferred,

see sections 401 to 406 of Pub. L. 101-73, set out as a note under

section 1437 of this title.

-MISC5-

EXCEPTIONS IN AREAS WHERE MAJOR DISASTER EXISTS

Pub. L. 105-18, title V, Sec. 50002, June 12, 1997, 111 Stat.

211, provided that:

''(a) Truth in Lending Act. - During the 240-day period beginning

on the date of enactment of this Act (June 12, 1997), the Board of

Governors of the Federal Reserve System may make exceptions to the

Truth in Lending Act (15 U.S.C. 1601 et seq.) for transactions

within an area in which the President, pursuant to section 401 of

the Robert T. Stafford Disaster Relief and Emergency Assistance Act

(42 U.S.C. 5170), has determined, on or after February 28, 1997,

that a major disaster exists, or within an area determined to be

eligible for disaster relief under other Federal law by reason of

damage related to the 1997 flooding of the Red River of the North,

the Minnesota River, and the tributaries of such rivers, if the

Board determines that the exception can reasonably be expected to

alleviate hardships to the public resulting from such disaster that

outweigh possible adverse effects.

''(b) Expedited Funds Availability Act. - During the 240-day

period beginning on the date of enactment of this Act (June 12,

1997), the Board of Governors of the Federal Reserve System may

make exceptions to the Expedited Funds Availability Act (12 U.S.C.

4001 et seq.) for depository institution offices located within any

area referred to in subsection (a) of this section if the Board

determines that the exception can reasonably be expected to

alleviate hardships to the public resulting from such disaster that

outweigh possible adverse effects.

''(c) Time Limit on Exceptions. - Any exception made under this

section shall expire not later than September 1, 1998.

''(d) Publication Required. - The Board of Governors of the

Federal Reserve System shall publish in the Federal Register a

statement that -

''(1) describes any exception made under this section; and

''(2) explains how the exception can reasonably be expected to

produce benefits to the public that outweigh possible adverse

effects.''

Similar provisions were contained in the following prior acts:

Pub. L. 103-76, Sec. 2, Aug. 12, 1993, 107 Stat. 752.

Pub. L. 102-485, Sec. 3, Oct. 23, 1992, 106 Stat. 2772.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 4009 of this title.

-CITE-

12 USC Sec. 4009 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4009. Administrative enforcement

-STATUTE-

(a) Administrative enforcement

Compliance with the requirements imposed under this chapter,

including regulations prescribed by and orders issued by the Board

of Governors of the Federal Reserve System under this chapter,

shall be enforced under -

(1) section 8 of the Federal Deposit Insurance Act (12 U.S.C.

1818) in the case of -

(A) national banks, and Federal branches and Federal agencies

of foreign banks, by the Office of the Comptroller of the

Currency;

(B) member banks of the Federal Reserve System (other than

national banks), and offices, branches, and agencies of foreign

banks located in the United States (other than Federal

branches, Federal agencies, and insured State branches of

foreign banks), by the Board of Governors of the Federal

Reserve System; and

(C) banks insured by the Federal Deposit Insurance

Corporation (other than members of the Federal Reserve System)

and insured State branches of foreign banks, by the Board of

Directors of the Federal Deposit Insurance Corporation;

(2) section 8 of the Federal Deposit Insurance Act (12 U.S.C.

1818), by the Director of the Office of Thrift Supervision in the

case of savings associations the deposits of which are insured by

the Federal Deposit Insurance Corporation; and

(3) the Federal Credit Union Act (12 U.S.C. 1751 et seq.), by

the National Credit Union Administration Board with respect to

any Federal credit union or insured credit union.

The terms used in paragraph (1) that are not defined in this

chapter or otherwise defined in section 3(s) of the Federal Deposit

Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to

them in section 1(b) of the International Banking Act of 1978 (12

U.S.C. 3101).

(b) Additional powers

(1) Violation of this chapter treated as violation of other Acts

For purposes of the exercise by any agency referred to in

subsection (a) of this section of its powers under any Act

referred to in that subsection, a violation of any requirement

imposed under this chapter shall be deemed to be a violation of a

requirement imposed under that Act.

(2) Enforcement authority under other Acts

In addition to its powers under any provision of law

specifically referred to in subsection (a) of this section, each

of the agencies referred to in such subsection may exercise, for

purposes of enforcing compliance with any requirement imposed

under this chapter, any other authority conferred on it by law.

(c) Enforcement by Board

(1) In general

Except to the extent that enforcement of the requirements

imposed under this chapter is specifically committed to some

other Government agency under subsection (a) of this section, the

Board of Governors of the Federal Reserve System shall enforce

such requirements.

(2) Additional remedy

If the Board determines that -

(A) any depository institution which is not a depository

institution described in subsection (a) of this section, or

(B) any other person subject to the authority of the Board

under this chapter, including any person subject to the

authority of the Board under section 4004(d)(2) or 4008(c) of

this title,

has failed to comply with any requirement imposed by this chapter

or by the Board under this chapter, the Board may issue an order

prohibiting any depository institution, any Federal Reserve bank,

or any other person subject to the authority of the Board from

engaging in any activity or transaction which directly or

indirectly involves such noncomplying depository institution or

person (including any activity or transaction involving the

receipt, payment, collection, and clearing of checks and any

related function of the payment system with respect to checks).

(d) Procedural rules

The authority of the Board to prescribe regulations under this

chapter does not impair the authority of any other agency

designated in this section to make rules regarding its own

procedures in enforcing compliance with requirements imposed under

this chapter.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 610, Aug. 10, 1987, 101 Stat. 649;

Pub. L. 101-73, title VII, Sec. 744(d), Aug. 9, 1989, 103 Stat.

438; Pub. L. 102-242, title II, Sec. 212(h), Dec. 19, 1991, 105

Stat. 2303.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Credit Union Act, referred to in subsec. (a)(3), is

act June 26, 1934, ch. 750, 48 Stat. 1216, as amended, which is

classified generally to chapter 14 (Sec. 1751 et seq.) of this

title. For complete classification of this Act to the Code, see

section 1751 of this title and Tables.

-MISC2-

AMENDMENTS

1991 - Subsec. (a). Pub. L. 102-242, Sec. 212(h)(2), inserted at

end ''The terms used in paragraph (1) that are not defined in this

chapter or otherwise defined in section 3(s) of the Federal Deposit

Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to

them in section 1(b) of the International Banking Act of 1978 (12

U.S.C. 3101).''

Subsec. (a)(1). Pub. L. 102-242, Sec. 212(h)(1), added par. (1)

and struck out former par. (1) which read as follows: ''section 8

of the Federal Deposit Insurance Act in the case of -

''(A) national banks, by the Comptroller of the Currency;

''(B) member banks of the Federal Reserve System (other than

national banks), by the Board of Governors of the Federal Reserve

System; and

''(C) banks insured by the Federal Deposit Insurance

Corporation (other than members of the Federal Reserve System),

by the Board of Directors of the Federal Deposit Insurance

Corporation;''.

1989 - Subsec. (a)(2). Pub. L. 101-73 amended par. (2)

generally. Prior to amendment, par. (2) read as follows: ''section

5(d) of the Home Owners' Loan Act of 1933, section 407 of the

National Housing Act, and section 17 of the Federal Home Loan Bank

Act, by the Federal Home Loan Bank Board (acting directly or

through the Federal Savings and Loan Insurance Corporation), in the

case of any institution subject to any of those provisions; and''.

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 4003 of this title.

-CITE-

12 USC Sec. 4010 01/06/03

-EXPCITE-

TITLE 12 - BANKS AND BANKING

CHAPTER 41 - EXPEDITED FUNDS AVAILABILITY

-HEAD-

Sec. 4010. Civil liability

-STATUTE-

(a) Civil liability

Except as otherwise provided in this section, any depository

institution which fails to comply with any requirement imposed

under this chapter or any regulation prescribed under this chapter

with respect to any person other than another depository

institution is liable to such person in an amount equal to the sum

of -

(1) any actual damage sustained by such person as a result of

the failure;

(2)(A) in the case of an individual action, such additional

amount as the court may allow, except that the liability under

this subparagraph shall not be less than $100 nor greater than

$1,000; or

(B) in the case of a class action, such amount as the court may

allow, except that -

(i) as to each member of the class, no minimum recovery shall

be applicable; and

(ii) the total recovery under this subparagraph in any class

action or series of class actions arising out of the same

failure to comply by the same depository institution shall not

be more than the lesser of $500,000 or 1 percent of the net

worth of the depository institution involved; and

(3) in the case of any successful action to enforce the

foregoing liability, the costs of the action, together with a

reasonable attorney's fee as determined by the court.

(b) Class action awards

In determining the amount of any award in any class action, the

court shall consider, among other relevant factors -

(1) the amount of any actual damages awarded;

(2) the frequency and persistence of failures of compliance;

(3) the resources of the depository institution;

(4) the number of persons adversely affected; and

(5) the extent to which the failure of compliance was

intentional.

(c) Bona fide errors

(1) General rule

A depository institution may not be held liable in any action

brought under this section for a violation of this chapter if the

depository institution demonstrates by a preponderance of the

evidence that the violation was not intentional and resulted from

a bona fide error, notwithstanding the maintenance of procedures

reasonably adapted to avoid any such error.

(2) Examples

Examples of a bona fide error include clerical, calculation,

computer malfunction and programming, and printing errors, except

that an error of legal judgment with respect to a depository

institution's obligation under this chapter is not a bona fide

error.

(d) Jurisdiction

Any action under this section may be brought in any United States

district court, or in any other court of competent jurisdiction,

within one year after the date of the occurrence of the violation

involved.

(e) Reliance on Board rulings

No provision of this section imposing any liability shall apply

to any act done or omitted in good faith in conformity with any

rule, regulation, or interpretation thereof by the Board of

Governors of the Federal Reserve System, notwithstanding the fact

that after such act or omission has occurred, such rule,

regulation, or interpretation is amended, rescinded, or determined

by judicial or other authority to be invalid for any reason.

(f) Authority to establish rules regarding losses and liability

among depository institutions

The Board is authorized to impose on or allocate among depository

institutions the risks of loss and liability in connection with any

aspect of the payment system, including the receipt, payment,

collection, or clearing of checks, and any related function of the

payment system with respect to checks. Liability under this

subsection shall not exceed the amount of the check giving rise to

the loss or liability, and, where there is bad faith, other

damages, if any, suffered as a proximate consequence of any act or

omission giving rise to the loss or liability.

-SOURCE-

(Pub. L. 100-86, title VI, Sec. 611, Aug. 10, 1987, 101 Stat. 650.)

-MISC1-

EFFECTIVE DATE

Section effective Sept. 1, 1988, see section 613(b) of Pub. L.

100-86, set out as a note under section 4001 of this title.

-CITE-