Credit unions want change to check rules

{mosads}In its January agenda for the year’s regulatory action, the CFPB indicated it would work with the Federal Reserve to amend the rules on check deposits and collection. The agency planned to finalize the new rules in August.

Wednesday’s letter was also copied to Ben Bernanke, the chairman of the Federal Reserve Board.

Current regulations require credit unions to allow the money from personal checks to be available two days after the check is deposited.

The credit union group, however, wants the agencies to push back that time frame to three days. They say that will give institutions enough time to tell whether the check was counterfeit or if the account had insufficient funds.

“For example,” Hunt wrote, “a check deposited on Monday must be made available when the credit union opens for business on Wednesday. While the funds are available, however, the credit union will not be informed by the Federal Reserve that the check is not valid until 11:00am on Wednesday.”

The group also asked for the ability to hold cashier’s checks and money orders for a period, in case the check is a fake. Currently, credit unions have to make funds from cashier’s checks and money orders available the next day.

Hunt also reiterated longstanding concerns about expected revisions to the rule, including worries that some ability to hold checks on a case-by-case basis will be eliminated.