The Bank’s policy is to ensure proper adherence to the provisions and intent of the Expedited Funds Availability Act. All employees of West Texas National Bank herein referred to as “WTNB” or “Bank”, must comply with the terms of this policy. The EFAA Policy will be reviewed and approved by the Board of Directors annually.

The purpose of this policy is to ensure the prompt availability of funds and proper disclosure to customers and to expedite the return of unpaid checks for transaction accounts.

Regulation CC (12 CFR Section 229) was adopted by the Federal Reserve to enforce the Expedited Funds Availability Act. The purpose of this policy is to ensure the prompt availability of funds and proper disclosure to customers and to expedite the return of unpaid checks for transaction accounts.

The Check Clearing for the 21st Century Act (Check 21 Act) (PL 108-100) is a law under the Uniform Commercial Code that authorizes financial institutions and other entities to agree to alternative means of presentment, such as electronic presentment. To engage in broad-based electronic presentment, however, the presenting institution would need electronic presentment agreements with each institution to which it presents.

Regulation CC applies to business and consumer transaction accounts. Transaction accounts include demand deposit accounts and checking with interest accounts.

Availability of Funds – Subpart B
The Bank's objective is to make funds available as expeditiously as good business practices mandate. The Bank’s policy is to make funds from cash and check deposits available on the business day of the deposit. Electronic direct deposits will be available on the day they are received. Once funds are available they may be withdrawn.

Every day is a business day except Saturdays, Sundays, and federal holidays. If a deposit is made before our cut off time, we will consider that day to be the day of your deposit. However, if a deposit is made after the cut-off time or on a non-business day, we will consider that the deposit was made on the next business day we are open. Funds mailed to us will be considered deposited on the business day they are received and processed by us. Funds deposited at a Night Depository will be considered deposited on the business day they are removed from such facility and processed by us.

Cut-Off Times
Funds deposited at our branches by 6:00 PM, at our Night Depository by 7:00 AM, at our ATMs by 5:00 PM each business day we are open, will be credited to the account on the same business day.

Same-Day Availability
Funds from the following deposits are available on the same business day of the deposit:
• Cash deposits
• All electronic payments, such as direct deposits and wire transfers
• Checks drawn on the Bank, if funds are available in the account (on-us checks)
• Checks from other institutions (transit checks)
• U.S. Treasury checks made payable to the account holder
• Funds from government checks (local and state)
• Cashier's checks, certified checks, and teller checks that are made payable to the account holder
• Federal Reserve Bank checks, Federal Home Loan Bank checks, and U.S. postal money orders, if these items are payable to the depositor

Longer Delays
Availability on some checks may be delayed for longer periods under the following circumstances:
• The Bank believes a check will not be paid.
• Deposited checks total more than $5,000 on one day.
• Returned unpaid checks are re-deposited.
• An account has been overdrawn six times or more in the last six months.
• Emergencies, such as failure of communications or computer equipment.

The Bank will notify affected customers if the Bank delays their ability to withdraw funds for any of these reasons. The Bank will tell affected customers the specific reason for the delay and when the funds will be available for use, which generally will be no later than the fifth business day after the day of deposit.

New Account Rules
Regulation CC allows banks to apply special rules during the first 30 days after an account is opened. An account is not new if the customer has had another transaction account at the Bank for more than 30 days. If the customer has had authorization only to sign on a corporate account and then opens a new consumer account, it is considered a new account for purposes of Regulation CC. Funds from electronic direct deposits and cash will be available on the day of deposit.

Funds from wire transfer deposits and the first $5,000 of a day's total deposit of cashier's, certified, teller's, traveler's, and federal, state, and local government checks will be available on the day of deposit if checks are payable to the depositor. The excess over $5,000 will be available on the ninth business day after the day of deposit. If the deposit of these checks (other than a U.S. Treasury check) is not made in person to one of the Bank's employees, the first $5,000 will not be available until the second business day after the day of deposit.

Funds from all other checks deposited will be available on the fifth business day after the day of deposit.

When the Bank Will Pay Interest on Deposits
The Bank will begin to accrue interest on deposits to interest-bearing accounts on the business day on which it receives credit from the Federal Reserve or local correspondent Bank. The Bank may rely on the Federal Reserve availability schedule or the Bank's correspondent to determine when credit is actually received. Deposits are considered deposited on the same day when received at a teller station or proprietary ATM. They are considered deposited when they are removed and processed from night depositories, lock boxes, and nonproprietary ATMs. When deposits are sent through the mail, they are considered deposited when received and processed by the Bank.

Consumer Disclosures and Notices
We will deliver a copy of our funds availability policy to persons/entities that open a transaction account. We will make the disclosures in writing and in a form the customer can keep. We will comply with the requirements of the E-Sign Act (15 USC 7001) if we deliver disclosures electronically. In the case of joint accounts, we need not give separate disclosures to each customer; similarly if one customer is opening multiple transaction accounts at one time, we need only give one copy of the policy. We will also give a written copy of our policy to any person upon an oral or written request for this information.

If we change our funds availability policy, we will send a notice to consumer account holders at least 30 days before implementing the change. If the change expedites the availability of funds, then we will send the notice not later than 30 days after we make the change.

Deposit Slips
We will include a statement that deposits may not be available for immediate withdrawal on all preprinted deposit slips furnished to our customers. We are not responsible for this disclosure if the customer does not order their deposit slips through our Bank.

Locations Where Employees Accept Consumer Deposits
We will post in a conspicuous place, where we accept deposits to consumer accounts, a funds availability notice that reflects our practice. We will use the model forms in the regulation for this notice.

Hold Notices
If we decide to hold funds beyond the period specified in our general availability policy, we will give the customer a notice at the time of the deposit explaining why the funds are being held and when they will be available. If the deposit is not made in person to an employee of our Bank or if we decide to extend the time when deposited funds will be made available after the deposit has been made, we will mail or deliver the notice to the customer not later than the first business day after the business day on which the deposit is made.

Check-Return Requirements and Endorsement Standards of Regulation CC - Subpart C
Under the guidelines of Subpart C, a bank is required to endorse checks in a specific way to ensure the endorsement is conspicuous, plus highlight the nine-digit routing number. Paying banks and returning banks are thereby authorized to rely on the number in returning the check.

To ensure proper and consistent handling of returned checks, the Board directs management to develop, implement, and maintain procedures and related controls to ensure compliance with Subpart C.

Substitute Checks – Subpart D
It is the policy of West Texas National Bank to treat each substitute check that complies with the Check 21 Act requirements as the legal equivalent of the original check for all persons and purposes. The Board directs management to implement procedures to ensure compliance with Subpart D of Regulation CC (12 CFR 229) and all amendments and related laws and regulations.

It is the policy of the Bank not to provide substitute checks to consumers whenever it can legally avoid doing so. Instead, the Bank shall provide images, copies, or other information, rather than substitute checks.

The Bank will provide to its customers all disclosures that are required by law. The Bank will use the Federal Reserve model form C-5A as a guide for its new account disclosures for consumer deposit account holders only.

Disclosures will be provided to a customer of the Bank who requests an original check or a copy of a check and receives a substitute check. The Bank will provide the disclosure to a customer of the Bank who receives a returned substitute check, at the time the Bank provides such substitute check.

Training of employees
The Bank will provide all affected employees who perform duties subject to the requirements of the act with annual training including, but not limited to:
• Tellers
• New accounts representatives
• Operations staff (return check department, overdrafts, etc.)
• Customer service representatives

Record Retention
We will keep records to show compliance with the requirements of Regulation CC for at least two years. We are not generally required to retain records showing that we actually have given disclosures or notices to each customer, but we must retain evidence demonstrating that our procedures reasonably ensure the customers' receipt of the required disclosures and notices. We must, however, retain a copy of each reasonable cause to doubt collectability notice, as well as a brief description of the facts giving rise to the availability of that exception.

Regulation CC will be included in the internal audit reviews of the deposit area annually. In addition, the Compliance Officer may periodically test for the following:
• Disclosures made in the Funds Availability Policy comply with Regulation CC requirements.
• Proper exception notifications are made in cases where holds are placed.
• Funds are held only in the situations considered permissible by Regulation CC.
• Funds are held for periods no greater than the maximum permissible time periods mandated by this policy.
• Funds are made available as stated on the exception hold notification.
• As needed, appropriate notification of changes in the Expedited Funds Availability Policy is made.

West Texas National Bank
Revised 03/2013
Board Approved: 05/16/2013

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Last updated: 10-19-2015