{"id":2134,"date":"2020-06-11T16:15:31","date_gmt":"2020-06-11T16:15:31","guid":{"rendered":"https:\/\/albanknews.com\/?p=2134"},"modified":"2020-06-11T16:15:31","modified_gmt":"2020-06-11T16:15:31","slug":"deposit-holds","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=2134","title":{"rendered":"Deposit Holds"},"content":{"rendered":"

Q:\u00a0<\/strong>If we doubt the collectability of a check that a customer presents to the Bank, are we able to put \u201can indefinite\u201d hold on the funds?<\/p>\n

A:\u00a0<\/strong>While Reg. CC does not specify the allowable duration of an exception hold for this reason, the Reg. says that the depositary bank may extend the hold for \u201ca reasonable period of time.\u201d The Fed has told us in guidance that \u201creasonable\u201d is generally understood to be one additional day for on-us checks and five additional business days for local checks. The bank can impose a longer hold, but it would bear the burden of showing that the hold time is \u201creasonable.\u201d<\/p>\n

If an exception contained in paragraphs (b) through (f) of this section applies, the depositary bank may extend the time periods established under \u00a7\u00a7229.10(c) and 229.12 by a reasonable period of time.<\/em><\/p>\n

12 CFR \u00a7229.13(h)(1): https:\/\/www.ecfr.gov\/cgi-bin\/text-idx?SID=edf865ac553db81f9a0e3afd580230a1&mc=true&node=pt12.3.229&rgn=div5#se12.3.229_113<\/a><\/p>\n

A “reasonable” time period is generally defined as one additional business day (making a total of two business days) for on-us checks, and five additional business days (total of seven) for local checks; your institution may impose longer exception holds, but you may have the burden of proving that they are “reasonable.”<\/em><\/p>\n

A Guide for Financial Institutions:https:\/\/www.federalreserve.gov\/pubs\/regcc\/regcc.htm<\/a><\/p>\n

 <\/p>\n

\n

Compliance rules and regulations change quickly! For timely compliance updates, subscribe to Compliance Alliance\u2019s email newsletters<\/strong><\/a>. Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933<\/strong>or email info@compliancealliance.com<\/strong><\/a> and ask for our Membership Team.<\/p>\n

Not a member? <\/strong>Learn more about membership with Compliance Alliance by attending one of our live demos:<\/p>\n