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.