Question: Is a bank required to notify customers of a deposited check being returned?
Answer: Yes, Regulation CC, § 229.33(h), requires providing notice to a customer of a check being returned by midnight of the banking day following the banking day on which the bank receives notice of the check either being returned or nonpayment. A notice provided in accordance with this section may also satisfy the exception hold notice requirements, if the bank will place an exception hold on the basis of the nonpayment notification and otherwise meets the exception hold notice requirements.
Notification to customer. If the depositary bank receives a returned check, notice of nonpayment, or notice of recovery under §229.35(b), it shall send or give notice to its customer of the facts by midnight of the banking day following the banking day on which it received the returned check, notice of nonpayment, or notice of recovery, or within a longer reasonable time. Regulation CC, § 229.33(h) – https://www.ecfr.gov/cgi-bin/text-idx?SID=35b0b61237b153e41051d2fd905844bb&mc=true&node=se12.3.229_133&rgn=div8 Home Mortgage Disclosure Rule, p. 2 https://files.consumerfinance.gov/f/documents/cfpb_final-rule_home-mortgage-disclosure_regulation-c_2020-04.pdf
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