Kohn, Vice-Chairman of the Board of Governors of the Federal Reserve System from 2006 to 2010, notes the central function of the payment schedules of the Expedited Funds Availability Act: "The Expedited Funds Availability Act requires that the Board reduce the maximum hold periods to the period of time necessary for the depositary bank to reasonably expect to learn of the nonpayment of most checks in a given category." Id.
1996), available at http://www.federalreserve.gov/boarddocs/rptcongress/chkfraud.pdf (recommending that the Expedited Funds Availability Act (EFAA) be amended to lengthen the maximum permissible hold period for local checks from two to three business days).
First, I believe it is important to evaluate whether the objectives of the Expedited Funds Availability Act have been successfully achieved.
In conclusion, I believe that we have learned several lessons from our experience in implementing the Expedited Funds Availability Act. The first lesson is that, in legislation as well a regulation, there are costs and benefits that must be balanced but that are often unrecognized at the time the laws or rules are adopted.
The increase results from the purchase of data processing and data communications equipment to handle increased workloads and improve contingency functions, and the full-year impact of equipment purchased to meet the demands of the Expedited Funds Availability Act.
As you may remember, the Expedited Funds Availability Act gave the Federal Reserve Board regulatory authority to improve the check collection and return check systems.