Expedited Funds Availability Act (EFAA): What it is, How it Works

The Expedited Funds Availability Act (EFAA) is a federal law that requires banks to make funds from check deposits available to customers within certain time frames. The law was enacted in 1987 in an effort to reduce the amount of time that consumers had to wait to access their money after writing a check.

The EFAA establishes two different time frames for funds availability:

• Funds availability for check deposits: Funds from check deposits must be available to customers for withdrawal within one business day if the check is drawn on the same bank where the deposit is made. For checks drawn on other banks, funds must be available within two business days.
• Funds availability for electronic deposits: Funds from electronic deposits must be available to customers for withdrawal within one business day.

There are a few exceptions to the EFAA's funds availability requirements. For example, funds from checks that are returned unpaid are not subject to the law's time frames. Additionally, banks may delay the availability of funds from certain types of deposits, such as cash deposits or deposits made at night or on weekends.

The EFAA has been effective in reducing the amount of time that consumers have to wait to access their money after writing a check. However, the law has also been criticized for allowing banks to impose fees on consumers who withdraw funds from their accounts before the funds are fully available.

Overall, the EFAA is a complex law with a number of exceptions and special rules. If you have any questions about the law's requirements, you should contact your bank.