Pub. 6 2018 Issue 3

CD) are within “good faith” limitations (for those subject to zero and 10% tolerances). EFAA. Q: When placing an exception hold on a large dollar check, our procedures state that we will make the first $200 immediately available, place a two-day hold on $4,800.00, and the remaining balance will be held for seven days. The question is, can we make more than $4,800 available for the two-day hold? A scenario came up where we made the first $200 immediately available, placed a two-day hold on $6,609.52, and the remaining balance was held for seven days. Can we hold only $4,800.00 under the two-day case-by-case hold and we cannot change that dollar amount? A: No, the bank may make more than $4,800 available sooner than the seventh business day after the banking day of deposit. In fact, $4,800 is the minimum amount the bank must make available by the second business day – it is free to make more available then. This situation arises often when banks use the “large deposit” excep- tion hold from Regulation CC – which allows them to delay customers’ access to amounts over $5,000 for five business days beyond what Regulation CC normally requires (which is the second business day). For banks with a normal availability schedule quicker than the regulation’s second business day, that still leaves the first $5,000 of the deposit subject to their normal schedule (same day or next day). Regulation CC requires that at least $200 be made available to the customer on the next day, so that leaves the $4,800 still to be dealt with. This is where a bank with a normal availability that is sooner than Regulation CC’s requirement can take advantage of a case-by-case hold to delay that $4,800 until the regulation’s normal availability on the second business day after the banking day of deposit. So, to get maximum delay, the bank uses a combination of a case-by- case hold on $4,800 of the first $5,000 of a large deposit, and an exception hold on the amount over $5,000. (But, as I noted above, these amounts are the maximums the bank may delay until the second and seventh business day. The bank is free to delay smaller amounts, making more funds available to the customer sooner.) You also have to be sure that you give affected customers proper notice. This depends on how your forms vendor has structured their forms. Some banks have to give both a case-by-case hold notice for that first $4,800 (or less) being delayed and an exception hold notice (with reason for the hold) for the remaining amount being held (that over $5,000). With other forms vendors, the bank can give one unified notice that details when each amount of funds will be made available (at least $200 on the next/first business day, at least $4,800 on the second business day, and the remainder on the seventh business day). HMDA. Q: In a transaction with one applicant that is a non-nat- ural person (e.g., an LLC or a trust) and another applicant who is a natural person, Regulation C, its Commentary, and other interpretive material are not as clear as they could be about how you should record “government monitoring information” (GMI). For the non-natural person, of course, we record the appropri- ate “NA” code. For the natural person (or the first co-applicant natural person), should we record the appropriate ethnicity, race, and sex? A: Reading the regulation and commentary, some have concluded that you should record “NA” for all GMI fields for both applicant and co-applicant. But, the consensus among my colleagues (from what we have heard and seen) is that “NA” is only for the non-natural per- son applicant, while “regular” data codes for ethnicity, race/national origin, and sex are appropriate for any natural person co-applicant. BSA. Q: Do we need to complete a Beneficial Owner Form on the individual signing for a loan for our local village government? A: No, entities that qualify as “exempt persons” under CTR rules, including state and local governments, are not included in the defi- nition of “legal entity customer” in the new Customer Due Diligence/ Beneficial Ownership rule.