The Expedited Funds Availability Act (EFAA) is federal legislation signed into law in December of 1987 as an amendment to the Federal Reserve Act. It is meant to provide consumers with protection from deposited funds being held up for extended periods of time without any clear explanation from the financial institution. The Act governs the amount of time that financial institutions can place a “hold” on a deposit in consumer accounts. It sets forth parameters for the amount of time a bank can enforce a hold on a consumer's deposit and outlines restrictions and requirements for processing consumer deposits. The Act was necessitated by instances of consumer frustration when encountering multiple and extended holds.

The EFAA specifies the different types of holds that a bank can enforce on consumer deposits. The four main types of deposit hold types are statutory, large deposit, new account, and exception holds. Statutory holds are based on existing consumer protection and consumer rights laws or regulations. Holds of this type include those that are triggered when a consumer has a high number of overdrafts or when they have an excessive negative account balance over a certain period of time. Large deposit holds are applicable when large sums of money are deposited which could be the start of a fraudulent activity. Banks are allowed to hold deposits of $5,000 or more for 20 days if they believe fraud or other criminal activity is suspected.

New account holds are issued for new customers. This preventative measure is commonly put into place in order to verify the customer’s identity before allowing access to their funds. Finally, exception holds can be imposed as required by law such as check from insurance companies written on in-state banks which must be made available five business days after deposit.

The EFAA implements protections to help ensure consumers have access to their funds in a timely manner without having to wait for extended periods of time. The Act also outlines the criteria for placing holds on the deposits and require banks to inform its customers of the reasons for the holds and the approximate length of time the holds will remain in effect. The goal of the EFAA is to make sure that funds remain available as quickly as possible while providing safeguards to protect individuals as well as the financial institutions.