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Section 1429 Of Article 2. Disclosure Of Delayed Availability Policy From California Financial Code >> Division 1.1. >> Chapter 12. >> Article 2.
1429
. (a) Funds deposited in an account at a depository institution
shall be available on the second business day after the business day
on which those funds are deposited in the case of a cashier's check,
certified check, teller's check, or depository check subject to the
following:
(1) The check is endorsed only by the person to whom it was issued.
(2) The check is deposited in a receiving depository institution that is staffed by individuals employed by that institution.
(3) The check is deposited with a special deposit slip that indicates it is a cashier's check, certified check, teller's check, or depository check, as the case may be.
(4) The check is deposited into an account in the name of a customer that has maintained any account with the receiving depository institution for a period of 60 days or more.
(5) The face amount of the check is for five thousand dollars ($5,000) or less. In the case of funds deposited on any business day in an account at a depository institution by depository checks, the aggregate amount of which exceeds five thousand dollars ($5,000), this subdivision shall apply only with respect to the first five thousand dollars ($5,000) of the aggregate amount.
(b) Subdivision (a) does not apply to a depository check if the receiving depository institution reasonably believes that the check is uncollectible from the originating depository institution. For purposes of this subdivision, "reasonable cause to believe" requires the existence of facts that would cause a well-grounded belief in the mind of a reasonable person. These reasons shall include, but not be limited to, a belief that (1) the drawer or drawee of the depository check has been, or will imminently be, the subject of an order for relief in bankruptcy or placed in receivership or (2) the depository check may be involved in a fraud or in a scheme commonly known as "kiting." In these situations, the depository institution electing to proceed under this subdivision shall so notify the drawer and drawee no later than the close of the next business day following deposit of the depository check.
(c) For purposes of this section, the following terms have the following meanings:
(1) "Account" means any demand deposit account and any other similar transaction account at a depository institution.
(2) "Business day" means any day other than a Saturday, Sunday, or legal holiday.
(3) "Cashier's check" means any check that is subject to the following:
(A) The check is drawn on a depository institution.
(B) The check is signed by an officer or employee of the depository institution.
(C) The check is a direct obligation of the depository institution.
(4) "Certified check" means any check with respect to which a depository institution certifies the following:
(A) That the signature on the check is genuine.
(B) The depository institution has set aside funds that are equal to the amount of the check and will be used only to pay that check.
(5) "Depository check" means any cashier's check, certified check, teller's check, and any other functionally equivalent instrument, as determined by the Board of Governors of the Federal Reserve System or the commissioner.
(6) "Depository institution" has the meaning given in clauses (i) to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve Act.
(7) "Teller's check" means any check issued by a depository institution and drawn on another depository institution.
(d) Except for the specific circumstances and checks described in this section, this section is not intended to restrict or preempt the regulatory authority of the commissioner.
(e) In the event of a suspension or modification of any similar provisions in the federal Expedited Funds Availability Act, the effect of this section shall be similarly suspended or modified.
(1) The check is endorsed only by the person to whom it was issued.
(2) The check is deposited in a receiving depository institution that is staffed by individuals employed by that institution.
(3) The check is deposited with a special deposit slip that indicates it is a cashier's check, certified check, teller's check, or depository check, as the case may be.
(4) The check is deposited into an account in the name of a customer that has maintained any account with the receiving depository institution for a period of 60 days or more.
(5) The face amount of the check is for five thousand dollars ($5,000) or less. In the case of funds deposited on any business day in an account at a depository institution by depository checks, the aggregate amount of which exceeds five thousand dollars ($5,000), this subdivision shall apply only with respect to the first five thousand dollars ($5,000) of the aggregate amount.
(b) Subdivision (a) does not apply to a depository check if the receiving depository institution reasonably believes that the check is uncollectible from the originating depository institution. For purposes of this subdivision, "reasonable cause to believe" requires the existence of facts that would cause a well-grounded belief in the mind of a reasonable person. These reasons shall include, but not be limited to, a belief that (1) the drawer or drawee of the depository check has been, or will imminently be, the subject of an order for relief in bankruptcy or placed in receivership or (2) the depository check may be involved in a fraud or in a scheme commonly known as "kiting." In these situations, the depository institution electing to proceed under this subdivision shall so notify the drawer and drawee no later than the close of the next business day following deposit of the depository check.
(c) For purposes of this section, the following terms have the following meanings:
(1) "Account" means any demand deposit account and any other similar transaction account at a depository institution.
(2) "Business day" means any day other than a Saturday, Sunday, or legal holiday.
(3) "Cashier's check" means any check that is subject to the following:
(A) The check is drawn on a depository institution.
(B) The check is signed by an officer or employee of the depository institution.
(C) The check is a direct obligation of the depository institution.
(4) "Certified check" means any check with respect to which a depository institution certifies the following:
(A) That the signature on the check is genuine.
(B) The depository institution has set aside funds that are equal to the amount of the check and will be used only to pay that check.
(5) "Depository check" means any cashier's check, certified check, teller's check, and any other functionally equivalent instrument, as determined by the Board of Governors of the Federal Reserve System or the commissioner.
(6) "Depository institution" has the meaning given in clauses (i) to (vi), inclusive, of Section 19(b)(1)(A) of the Federal Reserve Act.
(7) "Teller's check" means any check issued by a depository institution and drawn on another depository institution.
(d) Except for the specific circumstances and checks described in this section, this section is not intended to restrict or preempt the regulatory authority of the commissioner.
(e) In the event of a suspension or modification of any similar provisions in the federal Expedited Funds Availability Act, the effect of this section shall be similarly suspended or modified.
