What Is Regulation CC? Definition, Purpose and How It Works

Regulation CC, also known as the Check Clearing for the 21st Century Act, is a federal law that governs the processing of checks in the United States. The law was enacted in 2004 in an effort to modernize the check-clearing system and to reduce the time it takes for checks to clear.

Regulation CC establishes a number of requirements for banks and other financial institutions that process checks. These requirements include:

• **The check hold period, which is the maximum amount of time that a bank can hold a check before it must make the funds available to the payee. The check hold period is typically two business days, but it can be longer for certain types of checks.
• **The return check fee, which is a fee that a bank can charge a customer if a check is returned unpaid. The return check fee is typically $25, but it can be higher for certain types of checks.
• **The provisional credit, which is a temporary credit that a bank must make to a customer's account when a check is deposited. The provisional credit is typically equal to the amount of the check, but it can be less for certain types of checks.

Regulation CC also establishes a number of consumer protections. These protections include:

• **The right to a refund, which gives consumers the right to get a refund for a check that is returned unpaid if they can prove that they had enough funds in their account to cover the check.
• **The right to stop payment, which gives consumers the right to stop payment on a check before it is cashed.
• **The right to receive notice, which gives consumers the right to receive notice from their bank if a check is returned unpaid.

Regulation CC is an important law that helps to protect consumers and to ensure that the check-clearing system is efficient and fair.