News

New regs give Canadians faster access to deposits

August 3, 2012

New Canadian banking regulations that came into force on Aug. 1, 2012, mean that customers who deposit a check in person with a federally regulated financial institution can get the first $100 in cash right away.

The new rules are set out in Access to Funds Regulations and Negative Option Billing Regulations developed by the Department of Finance. The Financial Consumer Agency of Canada announced the new regulations in a press release.

If a check is for $100 or less, the financial institution must provide the full amount. If a check for $100 or less is deposited via ATM, funds must be made available the next business day.

The maximum hold time for the remainder of the check funds will be reduced as well. A check for $1,500 or less can now be put on hold for a maximum of four business days if the check is deposited by a consumer or eligible enterprise at a branch, and five business days if it is deposited in an ATM. If the check is for more than $1,500, the maximum hold is seven or eight business days, depending on whether it was deposited at a branch or in a machine.

Another regulation requires federally regulated FIs  to obtain consent before charging their customers for a new optional product or service, such as optional insurance coverage on a loan or credit card, or overdraft protection. The new rules are set out in the Access to Funds Regulations, as well as in the Negative Option Billing Regulations developed by the Department of Finance.

"Consumers now have more options open to them when they deposit checks, and they will be able to access their money sooner," says FCAC Commissioner Ursula Menke. "They will also have more control regarding their purchase of financial products and services like insurance for credit card balances or loans."

The Financial Consumer Agency of Canada (FCAC) will monitor compliance with the regulations; its website has been updated to inform consumers about the changes to check hold periods and their rights and responsibilities regarding negative option billing.

There are exceptions to the regulations:

• Immediate access to the first $100 only applies to checks deposited by individual consumers.
• The maximum check hold periods and access to the first $100 may not apply to checks issued outside of Canada, those that are not in Canadian dollars, or those deposited in accounts that have been open less than 90 days. If the financial institution refuses to provide the funds, it must explain this in a letter.

More details about the new regulations, including other exceptions, are outlined at the FCAC website. 

For more on this topic, visit the regulatory issues research center.