Countdown to Cleveland: A Final Checklist
Ensuring Your Institution's Reg CC Funds Availability Policy is Compliant on 2/27/10
by Lori Moore, Director of Compliance

Final preparations should be underway at your institution for the last stage of the Federal Reserve Bank’s migration to a single check processing region. As of 12:01 a.m. ET on February 26, 2010, the Atlanta check processing office will no longer accept paper items and by the end of the day Cleveland will be the sole paper check processing facility in the U.S. While this consolidation doesn’t change Reg CC per se, through attrition, it does eliminate the “non-local” category of checks. As a result financial institutions will need to adjust their funds availability policy and related procedures and disclosures. No institution should risk being caught off guard as the countdown to Cleveland ticks by, and none need to with the help of the ATTUS countdown checklist.

• How deposited funds are generally categorized
• The maximum period the financial institution may delay the customer's ability to withdraw funds
• The exceptions the financial institution may invoke to extend the length of the hold
• How holds are calculated

During the presentation, we will also look at different scenarios and discuss how the hold should be structured to best minimize the financial institution's risk.

2/25/2010 3:00PM ET to 4:00PM ET

Question: If a customer makes a deposit today and we place them on hold and they have checks that clear tonight which cause them to become overdrawn, can we charge them an overdraft fee?

Answer:  The only time you are not permitted to impose overdraft or insufficient funds fees is when you do not give the customer the hold notice at the time the deposit was made and the check is honored by the paying bank.  In other words, if the customer makes the deposit and leaves and it is decided later that a hold should have been placed, you are still required to send them a notice but you are prohibited from imposing fees unless the check is ultimately returned.

Got a question on a tricky regulation? We want to hear from you! Submit your question and an expert may answer it in a future issue.

Are You Ready for the Risk of Mobile Malware?
Security Experts: Mobile Phones, Services are the Next Big Targets
By Linda McGlasson, BankInfoSecurity.com

The recent news that Nexus One smartphone owners were unable to send or receive data is just a precursor to what security experts say is the next big threat to mobile phones and services - mobile malware.

According to Dr. Markus Jakobsson, a noted security expert in the field of phishing and crimeware, mobile phones -- especially smart phones -- pose the next big headache for security professionals. And financial institutions should be particularly concerned about risks to mobile banking.

"Hackers target data that can be turned into cash, and mobile banking services are a prime spot for them to target," says Jakobsson, principal scientist at the Palo Alto Research Center (PARC), a commercial innovation center.

The other issue is pure security. "Cell phones are a higher risk because they aren't well protected," he says.