US House approves bill to speed bank deposits

Funds deposited in most Northern Marianas banks could be available sooner under terms of a bill passed by the U.S. House of Representatives on Monday. H.R. 1679, introduced by American Samoa Delegate Eni F.H. Faleomavaega (D), adds both American Samoa and the Northern Mariana Islands to provisions of the Expedited Funds Availability Act. The Act already applies to all U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands and allows the Federal Reserve Bank to set rules for how quickly customers get access to funds they deposit in banks.

“Occasionally, constituents have complained about delays in getting their money after they deposit a check at a Northern Marianas bank,” according to Delegate Gregorio Kilili C. Sablan (Ind-MP). “And last year Congressman Faleomavaega alerted me that he had introduced legislation that would prevent excessive delays in the release of funds deposited in banks in American Samoa.

“I wrote to the major banks in the Northern Marianas to see what effect the national standards for release of deposited funds would have on them. Because sometimes there can be unintended consequences or special circumstances in the islands that make federal law inappropriate. But none of our banks objected to being included in the national requirements of the Expedited Funds Availability Act. So, when Congressman Faleomavaega informed me that his bill was going to the floor this week, I asked to be included.”

The Expedited Funds Availability Act was enacted in 1987. It requires banks in the U.S. states and some territories to make funds available from deposit of in-state checks no later than the second business day after the check is deposited. Out-of-state checks may be held for up to five business days before funds are released or for six business days in Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands.

But the schedule of hold-times does not apply to American Samoa, the Northern Marianas, or Guam. “Checks can be held for an intermittent and undetermined amount of time, even up to 21 days, before funds are available for the consumer to have access,” explained Faleomavaega during discussion of his bill in the House yesterday. “This is unfair for my constituents and has a direct and indirect impact on our local economy.

“For the record, I do not hold the banks at fault,” Faleomavaega added, “but given the trend of electronic banking and quicker access to mailing services, I feel that they are able to provide quicker and better services for their customers.”

The requirements of the Expedited Funds Availability Act generally apply to federally insured banks. There are variations on the requirements depending upon the type of deposit. For instance, cash deposits made in person, electronic payments, and U.S. Treasury checks, U.S. Postal Money Orders, and checks drawn by a state or other local government must be available for withdrawal on the next business day after the banking day the funds were deposited.

Funds from local checks would be required to be available not later than the third business day following the banking day on which the funds were deposited. And funds from non-local checks would have to be available by the sixth business day.

Under the provisions of H.R. 1679, the Act would apply in American Samoa and the Northern Marianas in the same way it applies in Alaska, Hawai’i, Puerto Rico, and the U.S. Virgin Islands.

H.R. 1679 passed the House of Representatives on a voice vote without dissent. The bill now goes to the Senate for that body’s consideration. (Office of the Delegate)