[House Report 114-61]
[From the U.S. Government Publishing Office]


114th Congress       }                             {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session         }                             {      114-61
=====================================================================
 
  TO AMEND THE EXPEDITED FUNDS AVAILABILITY ACT TO CLARIFY THE
  APPLICATION OF THAT ACT TO AMERICAN SAMOA AND THE NORTHERN MARIANA 
                                  ISLANDS

                                _______
                                

 April 13, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1367]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1367) to amend the Expedited Funds Availability 
Act to clarify the application of that Act to American Samoa 
and the Northern Mariana Islands, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                          Purpose and Summary

    H.R. 1367, ``to amend the Expedited Funds Availability Act 
to clarify the application of that Act to American Samoa and 
the Northern Mariana Islands,'' clarifies that the definitions 
of ``State'' and ``United States'' under the Expedited Funds 
Availability Act include American Samoa and the Northern 
Mariana Islands. In addition, the bill clarifies that the time 
periods within which banks must clear checks and make funds 
available to their customers that currently apply to Hawaii, 
Alaska, Puerto Rico and the Virgin Islands shall also apply to 
banks located in American Samoa and the Northern Mariana 
Islands.

                  Background and Need for Legislation

    In 1987, Congress passed the Expedited Funds Availability 
Act (EFAA) (Title VI of P.L. 100-86), which addressed the 
check-hold policies of depository institutions for various 
types of transaction accounts. EFAA was meant to ensure timely 
access to deposited funds and requires institutions to disclose 
to customers their funds availability policies. The EFAA also 
normalized holding and clearing times on all deposits. However, 
when the Act was passed, American Samoa and the Northern 
Mariana Islands were inadvertently excluded. This legislation 
is simply a technical correction to the Act.
    American Samoa Delegate Aumua Amata Coleman Radewagen 
submitted a statement for the record for the Financial Services 
Committee's March 25, 2015 hearing that said, ``As you know, 
the isolation of American Samoa, both geographically and 
economically, lends itself to difficulties in financial 
transactions that take place between American Samoa and those 
off island. Many times, our citizens must wait an exorbitant 
amount of time before they can receive off-island funds that 
have been sent to them. These delays often cause hardships that 
are both unnecessary and unfounded. H.R. 1367 will eliminate 
the excessive delays that the people of American Samoa must 
currently deal with in order to receive funds sent to them from 
off-island.''

                                Hearings

    The Committee on Financial Services held no hearings on 
H.R. 1367 in the 114th Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 25, 2015 and March 26, 2015, and ordered H.R. 1367 to be 
reported favorably to the House without amendment by a recorded 
vote of 58 yeas to 0 nays (Record vote no. FC-19), a quorum 
being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole vote in committee was a motion by Chairman Hensarling to 
report the bill favorably to the House with/without amendment. 
The motion was agreed to by a recorded vote of 58 yeas to 0 
nays (Record vote no. FC-19), a quorum being present.


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee, based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 1367 
will ensure timely access to deposited funds for persons in 
American Samoa and the Northern Mariana Islands.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 13, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1367, a bill to 
amend the Expedited Funds Availability Act to clarify the 
application of that Act to American Samoa and the Northern 
Mariana Islands.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Nathaniel 
Frentz.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 1367--A bill to amend the Expedited Funds Availability Act to 
        clarify the application of that Act to American Samoa and the 
        Northern Mariana Islands

    H.R. 1367 would amend the Expedited Funds Availability Act 
to include American Samoa and the Commonwealth of the Northern 
Mariana Islands. Specifically, accounts at and checks drawn on 
commercial banks in those territories would be subject to 
banking regulations that limit hold periods and the use of 
holds.
    The Board of Governors of the Federal Reserve System would 
be responsible for amending the relevant banking regulation. 
Any associated costs would reduce remittances from the Federal 
Reserve System to the Treasury, thereby reducing revenues; as a 
result, pay-as-you-go procedures apply. However, CBO estimates 
that any such effects would not be significant over the 2015-
2025 period or in any year. Enacting the bill would not affect 
direct spending.
    H.R. 1367 would impose a private-sector mandate, as defined 
in the Unfunded Mandates Reform Act (UMRA), by requiring 
accounts at and checks drawn on commercial banks in the two 
territories to meet banking regulation standards that would 
require those banks to process such accounts and checks sooner 
than is their current business practice. The cost of the 
mandate would be the administrative expenditures and the net 
income forgone from lost interest as a result of expediting 
their banking processes. Based on the small number of banks 
that would be affected, CBO estimates that the direct cost of 
the mandate would be small and would fall well below the annual 
threshold established in UMRA for private-sector mandates ($154 
million in 2015, adjusted annually for inflation).
    H.R. 1367 contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contact for this estimate is Nathaniel 
Frentz. The estimate was approved by David Weiner, Assistant 
Director for Tax Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1367 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 1367 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 1367 does not require any 
directed rulemakings.

             Section-by-Section Analysis of the Legislation


Section 1. Application of the Expedited Funds Availability Act

    This section expands the definitions of ``State'' and 
``United States'' under the EFAA to include American Samoa and 
the Commonwealth of the Northern Mariana Islands. The section 
also sets expedited funds availability schedules for receiving 
depository institutions located in American Samoa and the 
Commonwealth of the Northern Mariana Islands on par with those 
located in Alaska, Hawaii, Puerto Rico, and the Virgin Islands. 
In addition, this section sets January 1, 2016, as the 
effective date of the bill.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

EXPEDITED FUNDS AVAILABILITY ACT

           *       *       *       *       *       *       *


TITLE VI--EXPEDITED FUNDS AVAILABILITY

           *       *       *       *       *       *       *


SEC. 602. DEFINITIONS.

   For purposes of this title--
          (1) Account.--The term ``account'' means a demand 
        deposit account or other similar transaction account at 
        a depository institution.
          (2) Board.--The term ``Board'' means the Board of 
        Governors of the Federal Reserve System.
          (3) Business day.--The term ``business day'' means 
        any day other than a Saturday, Sunday, or legal 
        holiday.
          (4) Cash.--The term ``cash'' means United States 
        coins and currency, including Federal Reserve notes.
          (5) Cashier's check.--The term ``cashier's check'' 
        means any check which--
                  (A) is drawn on a depository institution;
                  (B) is signed by an officer or employee of 
                such depository institution; and
                  (C) is a direct obligation of such depository 
                institution.
          (6) Certified check.--The term ``certified check'' 
        means any check with respect to which a depository 
        institution certifies that--
                  (A) the signature on the check is genuine; 
                and
                  (B) such depository institution has set aside 
                funds which--
                          (i) are equal to the amount of the 
                        check; and
                          (ii) will be used only to pay such 
                        check.
          (7) Check.--The term ``check'' means any negotiable 
        demand draft drawn on or payable through an office of a 
        depository institution located in the United States. 
        Such term does not include noncash items.
          (8) Check clearinghouse association.--The term 
        ``check clearinghouse association'' means any 
        arrangement by which participant depository 
        institutions exchange deposited checks on a local 
        basis, including an entire metropolitan area, without 
        using the check processing facilities of the Federal 
        Reserve System.
          (9) Check processing region.--The term ``check 
        processing region'' means the geographical area served 
        by a Federal Reserve bank check processing center or 
        such larger area as the Board may prescribe by 
        regulations.
          (10) Consumer account.--The term ``consumer account'' 
        means any account used primarily for personal, family, 
        or household purposes.
          (11) Depository check.--The term ``depository check'' 
        means any cashier's check, certified check, teller's 
        check, and any other functionally equivalent instrument 
        as determined by the Board.
          (12) Depository institution.--The term ``depository 
        institution'' has the meaning given such term in 
        clauses (i) through (vi) of section 19(b)(1)(A) of the 
        Federal Reserve Act. Such term also includes an office, 
        branch, or agency of a foreign bank located in the 
        United States.
          (13) Local originating depository institution.--The 
        term ``local originating depository institution'' means 
        any originating depository institution which is located 
        in the same check processing region as the receiving 
        depository institution.
          (14) Noncash item.--The term ``noncash item'' means--
                  (A) a check or other demand item to which a 
                passbook, certificate, or other document is 
                attached;
                  (B) a check or other demand item which is 
                accompanied by special instructions, such as a 
                request for special advise of payment or 
                dishonor; or
                  (C) any similar item which is otherwise 
                classified as a noncash item in regulations of 
                the Board.
          (15) Nonlocal originating depository institution.--
        The term ``nonlocal originating depository 
        institution'' means any originating depository 
        institution which is not a local depository 
        institution.
          (16) Proprietary atm.--The term ``proprietary ATM'' 
        means an automated teller machine which is--
                  (A) located--
                          (i) at or adjacent to a branch of the 
                        receiving depository institution; or
                          (ii) in close proximity, as defined 
                        by the Board, to a branch of the 
                        receiving depository institution; or
                  (B) owned by, operated exclusively for, or 
                operated by the receiving depository 
                institution.
          (17) Originating depository institution.--The term 
        ``originating depository institution'' means the branch 
        of a depository institution on which a check is drawn.
          (18) Nonproprietary atm.--The term ``nonproprietary 
        ATM'' means an automated teller machine which is not a 
        proprietary ATM.
          (19) Participant.--The term ``participant'' means a 
        depository institution which--
                  (A) is located in the same geographic area as 
                that served by a check clearinghouse 
                association; and
                  (B) exchanges checks through the check 
                clearinghouse association, either directly or 
                through an intermediary.
          (20) Receiving depository institution.--The term 
        ``receiving depository institution'' means the branch 
        of a depository institution or the proprietary ATM, 
        located in the United States, in which a check is first 
        deposited.
          (21) State.--The term ``State'' means any State, the 
        District of Columbia, the Commonwealth of Puerto Rico, 
        American Samoa, the Commonwealth of the Northern 
        Mariana Islands, or the Virgin Islands.
          (22) Teller's check.--The term ``teller's check'' 
        means any check issued by a depository institution and 
        drawn on another depository institution.
          (23) United states.--The term ``United States'' means 
        the several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and the 
        Virgin Islands.
          (24) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        county, town, township, parish, village, or other 
        general purpose political subdivision of a State.
          (25) Wire transfer.--The term ``wire transfer'' has 
        such meaning as the Board shall prescribe by 
        regulations.

SEC. 603. EXPEDITED FUNDS AVAILABILITY SCHEDULES.

  (a) Next Business Day Availability For Certain Deposits.--
          (1) Cash deposits; wire transfers.--Except as 
        provided in subsection (e) and in section 604, in any 
        case in which--
                  (A) any cash is deposited in an account at a 
                receiving depository institution staffed by 
                individuals employed by such institution, or
                  (B) funds are received by a depository 
                institution by wire transfer for deposit in an 
                account at such institution,
        such cash or funds shall be available for withdrawal 
        not later than the business day after the business day 
        on which such cash is deposited or such funds are 
        received for deposit.
          (2) Government checks; certain other checks.--Funds 
        deposited in an account at a depository institution by 
        check shall be available for withdrawal not later than 
        the business day after the business day on which such 
        funds are deposited in the case of--
                  (A) a check which--
                          (i) is drawn on the Treasury of the 
                        United States; and
                          (ii) is endorsed only by the person 
                        to whom it was issued.
                  (B) a check which--
                          (i) is drawn by a State;
                          (ii) is deposited in a receiving 
                        depository institution which is located 
                        in such State and is staffed by 
                        individuals employed by such 
                        institution;
                          (iii) is deposited with a special 
                        deposit slip which indicates it is a 
                        check drawn by a State; and
                          (iv) is endorsed only by the person 
                        to whom it was issued;
                  (C) a check which--
                          (i) is drawn by a unit of general 
                        local government;
                          (ii) is deposited in a receiving 
                        depository institution which is located 
                        in the same State as such unit of 
                        general local government and is staffed 
                        by individuals employed by such 
                        institution;
                          (iii) is deposited with a special 
                        deposit slip which indicates it is a 
                        check drawn by a unit of general local 
                        government; and
                          (iv) is endorsed only by the person 
                        to whom it was issued;
                  (D) the first $200 deposited by check or 
                checks on any one business day;
                  (E) a check deposited in a branch of a 
                depository institution and drawn on the same or 
                another branch of the same depository 
                institution if both such branches are located 
                in the same State or the same check processing 
                region;
                  (F) a cashier's check, certified check, 
                teller's check, or depository check which--
                          (i) is deposited in a receiving 
                        depository institution which is staffed 
                        by individuals employed by such 
                        institution;
                          (ii) is deposited with a special 
                        deposit slip which indicates it is a 
                        cashier's check, certified check, 
                        teller's check, or depository check, as 
                        the case may be; and
                          (iii) is endorsed only by the person 
                        to whom it was issued.
  (b) Permanent Schedule.--
          (1) Availability of funds deposited by local 
        checks.--Subject to paragraph (3) of this subsection, 
        subsections (a)(2), (d), and (e) of this section, and 
        section 604, not more than 1 business day shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a local originating depository 
        institution and the business day on which the funds 
        involved are available for withdrawal.
          (2) Availability of funds deposited by nonlocal 
        checks.--Subject to paragraph (3) of this subsection, 
        subsections (a)(2), (d), and (e) of this section, and 
        section 604, not more than 4 business days shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a nonlocal originating depository 
        institution and the business day on which such funds 
        are available for withdrawal.
          (3) Time period adjustments for cash withdrawal of 
        certain checks.--
                  (A) In general.--Except as provided in 
                subparagraph (B), funds deposited in an account 
                in a depository institution by check (other 
                than a check described in subsection (a)(2)) 
                shall be available for cash withdrawal not 
                later than the business day after the business 
                day on which such funds otherwise are available 
                under paragraph (1) or (2).
                  (B)  5 p.m. cash availability.--Not more than 
                $400 (or the maximum amount allowable in the 
                case of a withdrawal from an automated teller 
                machine but not more than $400) of funds 
                deposited by one or more checks to which this 
                paragraph applies shall be available for cash 
                withdrawal not later than 5 o'clock post 
                meridian of the business day on which such 
                funds are available under paragraph (1) or (2). 
                If funds deposited by checks described in both 
                paragraph (1) and paragraph (2) become 
                available for cash withdrawal under this 
                paragraph on the same business day, the 
                limitation contained in this subparagraph shall 
                apply to the aggregate amount of such funds.
                  (C)  $200 availability.--Any amount available 
                for withdrawal under this paragraph shall be in 
                addition to the amount available under 
                subsection (a)(2)(D).
          (4) Applicability.--This subsection shall apply with 
        respect to funds deposited by check in an account at a 
        depository institution on or after September 1, 1990, 
        except that the Board may, by regulation, make this 
        subsection or any part of this subsection applicable 
        earlier than September 1, 1990.
  (c) Temporary Schedule.--
          (1) Availability of local checks.--
                  (A) In general.--Subject to subparagraph (B) 
                of this paragraph, subsections (a)(2), (d), and 
                (e) of this section, and section 604, not more 
                than 2 business days shall intervene between 
                the business day on which funds are deposited 
                in an account at a depository institution by a 
                check drawn on a local originating depository 
                institution and the business day on which such 
                funds are available for withdrawal.
                  (B) Time period adjustment for cash 
                withdrawal of certain checks.--
                          (i) In general.--Except as provided 
                        in clause (ii), funds deposited in an 
                        account in a depository institution by 
                        check drawn on a local depository 
                        institution that is not a participant 
                        in the same check clearinghouse 
                        association as the receiving depository 
                        institution (other than a check 
                        described in subsection (a)(2)) shall 
                        be available for cash withdrawal not 
                        later than the business day after the 
                        business day on which such funds 
                        otherwise are available under 
                        subparagraph (A).
                          (ii)  5 p.m. cash availability.--Not 
                        more than $400 (or the maximum amount 
                        allowable in the case of a withdrawal 
                        from an automated teller machine but 
                        not more than $400) of funds deposited 
                        by one or more checks to which this 
                        subparagraph applies shall be available 
                        for cash withdrawal not later than 5 
                        o'clock post meridian of the business 
                        day on which such funds are available 
                        under subparagraph (A).
                          (iii)  $200 availability.--Any amount 
                        available for withdrawal under this 
                        subparagraph shall be in addition to 
                        the amount available under subsection 
                        (a)(2)(D).
          (2) Availability of nonlocal checks.--Subject to 
        subsections (a)(2), (d), and (e) of this section and 
        section 604, not more than 6 business days shall 
        intervene between the business day on which funds are 
        deposited in an account at a depository institution by 
        a check drawn on a nonlocal originating depository 
        institution and the business day on which such funds 
        are available for withdrawal.
          (3) Applicability.--This subsection shall apply with 
        respect to funds deposited by check in an account at a 
        depository institution after August 31, 1988, and 
        before September 1, 1990, except as may be otherwise 
        provided under subsection (b)(4).
  (d) Time Period Adjustments.--
          (1) Reduction generally.--Notwithstanding any other 
        provision of law, the Board, jointly with the Director 
        of the Bureau of Consumer Financial Protection, shall, 
        by regulation, reduce the time periods established 
        under subsections (b), (c), and (e) to as short a time 
        as possible and equal to the period of time achievable 
        under the improved check clearing system for a 
        receiving depository institution to reasonably expect 
        to learn of the nonpayment of most items for each 
        category of checks.
          (2) Extension for certain deposits in noncontiguous 
        states or territories.--Notwithstanding any other 
        provision of law, any time period established under 
        subsection (b), (c), or (e) shall be extended by 1 
        business day in the case of any deposit which is both--
                  (A) deposited in an account at a depository 
                institution which is located in Alaska, Hawaii, 
                Puerto Rico, American Samoa, the Commonwealth 
                of the Northern Mariana Islands, or the Virgin 
                Islands; and
                  (B) deposited by a check drawn on an 
                originating depository institution which is not 
                located in the same State, commonwealth, or 
                territory as the receiving depository 
                institution.
  (e) Deposits at an ATM.--
          (1) Nonproprietary atm.--
                  (A) In general.--Not more than 4 business 
                days shall intervene between the business day a 
                deposit described in subparagraph (B) is made 
                at a nonproprietary automated teller machine 
                (for deposit in an account at a depository 
                institution) and the business day on which 
                funds from such deposit are available for 
                withdrawal.
                  (B) Deposits described in this paragraph.--A 
                deposit is described in this subparagraph if it 
                is--
                          (i) a cash deposit;
                          (ii) a deposit made by a check 
                        described in subsection (a)(2);
                          (iii) a deposit made by a check drawn 
                        on a local originating depository 
                        institution (other than a check 
                        described in subsection (a)(2)); or
                          (iv) a deposit made by a check drawn 
                        on a nonlocal originating depository 
                        institution (other than a check 
                        described in subsection (a)(2)).
          (2) Proprietary atm--temporary and permanent 
        schedules.--The provisions of subsections (a), (b), and 
        (c) shall apply with respect to any funds deposited at 
        a proprietary auto- mated teller machine for deposit in 
        an account at a depository institution.
          (3) Study and report on atm's.--The Board shall, 
        either directly or through the Consumer Advisory 
        Council, establish and maintain a dialogue with 
        depository institutions and their suppliers on the 
        computer software and hardware available for use by 
        automated teller machines, and shall, not later than 
        September 1 of each of the first 3 calendar years 
        beginning after the date of the enactment of this 
        title, report to the Congress regarding such software 
        and hardware and regarding the potential for improving 
        the processing of automated teller machine deposits.
  (f) Check Return; Notice of Nonpayment.--No provision of this 
section shall be construed as requiring that, with respect to 
all checks deposited in a receiving depository institution--
          (1) such checks be physically returned to such 
        depository institution; or
          (2) any notice of nonpayment of any such check be 
        given to such depository institution within the times 
        set forth in subsection (a), (b), (c), or (e) or in the 
        regulations issued under any such subsection.

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